The flip side of discipline is recognition. Individuals who do a good job need to be recognized. Recognition accomplishes several things: It lets the person know that she or he is doing a good job, it helps raise the person's confidence and encourages him or her to continue achieving, and it lets others know that the individual is doing a good job and is appreciated. Rudy Giuliani recognizes the contributions of his people by mentioning their names in his writings and his public statements. Shelly Lazarus at Ogilvy & Mather fosters a culture in which individual contributions matter; she calls her agency a "meritocracy." Mother Teresa believed that recognition for service has its own rewards, the sense of serving God by serving the people who are most in need.
It is important to separate the concepts of recognition and reward. Recognition is the acknowledgement that someone has done a good job; reward is the benefit associated with the recognition. In other words, employees are recognized for a good job and rewarded with a gift or bonus. Many companies practice pay for performance, awarding bonuses for the achievement of goals. While people may debate the benefits of this system, in such a system it falls to the manager, who sometimes also functions as coach, to evaluate an individual's eligibility for bonus. This practice clouds the development role of coaching because it equates development with compensation. The two are independent of each other. Compensation is linked to job performance; development is linked to individual growth and improvement. Good coaches, therefore, must learn to separate their role as arbiters of compensation from their role as developer of talent—not an easy task.
Thomas J. Neff and James M. Citrin, Lessons from the Top: The Search for America's Best Business Leaders , pp. 225-226.