Support your energy management with rewards and recognition

Aug. 7, 2007
The importance of effective rewards and recognition in a good energy management program can’t be overstated, but they’ll only be effective when they’re supported by the basics.

The importance of effective rewards and recognition in a good energy management program can’t be overstated, but they’ll only be effective when they’re supported by the basics. First, there should be consistent, credible and timely energy cost and usage data available. Second, there should be clear overall goals established surrounding energy costs, usage, supply security and greenhouse gas emission. These energy goals should be supported by action plans and resources, with targets and objectives assigned within personal objectives at every level of management.

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Not all these elements will be present in the early stages of implementing new energy management strategies, but at a minimum there should be plans to put them in place. Targets can be assigned against the achievement of these early-stage implementation plans.

Then, a serious rewards and recognition program can be established. Rewards generally fall into two categories: as a clear part of a structured incentive compensation scheme, and as a flexible cash awards program. By putting achieving energy targets in normal incentive structures, the management message is clear: “Energy is important, energy will be measured, energy focus is here to stay.”

Energy productivity projects, especially early on, can generate  very high returns with low risks.

Successful projects always combine enthusiastic leadership, teamwork, the willingness to embrace challenging goals, and rigorous implementation. It’s common for the recurring cash value of individual projects to be hundreds of thousands of dollars with paybacks within three years. With these kinds of results, flexible cash awards commensurate with the value to the company can be great motivators. In general, these should be team awards, supported by incontrovertible data showing both the team effort and project results. Failure to have this data devalues the credibility of the award.

Recognitions should be equally systematic. Each company must find its own set. In one company where I worked, a team would review submissions from plants around the world. The team selected an Energy Plant of the Month based on their implementation progress and achieved results. To avoid exclusion, sites were considered “plants” including office and research facilities. There were plaques for the lobby, certificates for members of the site energy teams, and recognition during monthly video conference calls, newsletters, in the local press and on company Web sites.

Similarly, an Energy Plant of the Year was selected. The site energy team was invited to join the annual manufacturing managers’ meeting to receive their award and present their work. This company also had recognition I particularly enjoyed – Energy Thief of the Month – awarded to the individual or team that successfully adopted an idea successfully implemented elsewhere.

The Energy Star Industrial program also recognizes plants in selected industries and awards the right to fly the Energy Star Flag and display the plaque. The local and national value of achieving this kind of recognition can be substantial.

Local managers are a critical part of the energy recognition efforts. As site teams get up to speed, there will be hundreds of efforts that collectively add to breakthrough energy productivity, bringing millions in profits. Publicly celebrating these efforts in regular production meetings or employee briefings underscores the strategic importance of energy. I’ve seen the full gamut of local recognitions, including dinners, re-lamping kits for the home, home energy audits, and the possibility to attend conferences like the World Energy Engineering Congress, along with the more traditional plaques, certificates and other awards.

None of this happens by accident. The Rewards and Recognition program needs conscious design and deployment through the normal HR and other management processes. Most importantly, it needs continuity and leadership.

So you might be asking, “Why the title, ‘Rewards, recognitions and consequences?’” Too many energy programs exhibit a temporary burst of management enthusiasm, supported by random acts of evangelism. A solid program must get beyond this and become part of the company’s operating culture.

And, at a certain point, the goals and targets must be more than aspirations. In one of my former companies, we joked that the energy management program was fostered by “Best Practice Sharing” in the first year, “Peer Shaming” in the second year, and if goals aren’t yet met, “Career Limiting” in the third year. In other words, like safety, at a certain point, delivery on energy and climate goals must become non-negotiable – hence consequences.

Peter Garforth is principal of Garforth International LLC, Toledo, Ohio. He can be reached at [email protected].

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