Incentives vs Appreciation – Dilemma of Managers


Incentives vs Appreciation has always been confusing words for a first-time manager.There is a huge difference between the two words. Yet in corporate both are used so interchangeably and that is a huge problem. Managers and leaders don’t realize that using these two powerful words in contexts can make or break a team’s morale.

First, let’s understand the literal meaning of these words in the dictionary –

  • Incentive

a thing that motivates or encourages someone to do something.

“give employees an incentive to improve their performance”

  • appreciation

recognition and enjoyment of the good qualities of someone or something.

“I smiled in appreciation”

Now let’s look at the basic difference between Incentives vs Appreciation

1 It is not discretionary It is discretionary
2 Have a time-period, are measurable Not measurable all the time
3 It is generally tangible It is generally non-tangible
4 It is transactional It is relational
5 It is conditional It is non-conditional
6 It is expected It is surprise
7 It is outcome driven It is based on behavior


Now let’s look at this in practical scenarios –

  • A person achieves his/ her metric on the target. Hence this is an achievement which demanded incentive and the person know that If I do X I will get a Y. It follows all the properties of the incentive mentioned above.
  • A person goes out of the way to help the customer and solve all his/ her issues, it is a situation which demands recognition. This was not something that was planned or could be measured. This came as a surprise and was non-conditional. Hence it follows all the properties of appreciation.
  • A simple thank you in the morning for coming on time is a recognition for the person’s value system. Appreciation generally comes when the person’s value system matches the value system of the company.
  • A simple mail to the team about what happened yesterday and who did well is appreciation, however, when a value has driven tangible thing given as per planned achievement is an incentive.


Hence it becomes very critical for the managers to demarcate between the two and make sure the team understands this. Both are important but the way and the situation in which they are used can create a lot of difference.

Appreciations can have more frequency but not over the line which reduces the effect of this appreciation. On the other hand, incentives are one’s or twice a year based on your performance on the paper.

This creates employee engagement which is one of the most important things according to me which defines a company’s success.

One more important thing to note here is that you cannot motivate everyone to give their 100% and hence you should follow the 80-20 rule where you make sure that you motivate at least your 20% employees using incentives and appreciation who do 80% of your work. Not the next question is what motivates them? The answer to this lies in your company’s vision and first principles and why in the first place the person joined the company.

We must understand this that everyone works for money as an outcome. But what we don’t understand is that the process of getting there is also important and this is what makes the most difference.


I have tried a couple of things with my team some worked some didn’t but what I realize that the incentives and appreciation also depend on what is the respect level of that person in people’s mind. Thus make sure that the team is always appreciated for what it has achieved but incentives can be purely goal driven.

A journey worth remembering – two years at practo

practo by heart

Finished MBA and got selected in Infosys from campus and I was back to Udaipur in the month of April’15 gearing up for my sister’s marriage.  During my discussions with all my friends in another grad school, Infosys was not looking like a place where I wanted to be. I then decided to reach out my network to look out for something else.  The network is one of the most important things I earned during my stay at Nirma.

Hence, I reached out to multiple people including alumni’s, corporates and my friends in other B-Schools. This happened on 19th April 2015. Then I got busy in marriage and had a lot of fun with family after a long time, as we were getting together after a long time. It didn’t last long and we had a dent in our life which no one could repair. My grandfather left us on the very next day of marriage functions. That was the day I receive a call from Siddhartha asking me if I am interested in a role in COO’s office at a start-up. My first thought was what will be my work. He told that I don’t have a JD for you as this role is new. But this is an awesome start-up and the role will give you a lot of exposure as you will be directly working with top management. I discussed with my chacha and other cousins. All were skeptical and told me not to go for it. I thought, what can be the possible harm as my joining at Infosys was in August and if I don’t like the role I would leave anyway. I told Siddhartha to send my CV, who was then working with practo as an HR consultant.

I had my 2-3 rounds with COO of the company and was finally selected on 29th April 2015. I was asked to join on 4th of May 2015. The first day at the company I reach and no one there has a clue that I am hired. I was told to sit on reception, I started getting Goosebumps. Then I was asked all the information, by that time COO came and I was inducted in 30 min in his office and right away started to work. While I could see, my peers having induction and training I didn’t have any of those. Thus, an epic roller coaster ride started at practo.

My first role at practo was to help COO in all his work. I had to do a lot of research and study on various topics ranging from new technology in healthcare, investors, business models, marketing tactics, and a lot more. My days would go just in reading and present but this was very challenging as I was getting to learn a lot of new things and meeting a lot of people. This was on for first 2 months. I started liking my work and I decided not to go for Infosys. It was this time that I was asked to take on a sales study. Basically, I had to become a sales manager and do sales of all practo products to understand the loopholes in the process and help the team to build process around it. This continued for another 2-3 months. During the same time, I got involved with Sales BI team and started working on a basic churn predictor model. This was an awesome experience.

6 months down the line COO was going on a foreign visit and told me that he doesn’t have any work for me for next 20 days. During the same time, Opx (Operations Excellence) Department was announced. I was then asked to help the head of Opx in Operations function. I never thought that working in Opx will change my life professionally but now when I look back I am thankful to people who put me there.

We were a 2-member team in Opx and soon we started various projects to the first map and then the optimize the workflow of different teams in operations. Practo’s operations are quite complex in nature because it serves multiple segments and has a different set of offerings for the different target group. Slowly one after other we work on process optimizations, metric management, work force management etc. This was the most exciting time as we wrote the bible for practice operations which was called practo’s way of user experience. During the same time, Opx team was getting build. This continued for 3 months and we achieved a lot as a team. It was at the same time I completed a year in practo. I was then given an opportunity to build BI function at operations from scratch. I was joined by two more awesome people ready to take on any challenge. We build the reporting system for operations first on excel and then on Tableau and Periscope. The start was rough but as of today everyone refers to the dashboards we built over a period of 6-8 months. During the same time, there were a lot of projects running centrally and I was part of many of them. Managing the launch of internal tools, managing data at large scale etc. were some of them.

All work and no play make Jack a dull boy. So, we had a lot of fun as well. We used to go for party every alternate weekend and one trek a month. We started from Kumaraparvat and then scaled Maklidurga, Mullyangiri etc. This had become a norm for us. There were a lot of ideas we would brainstorm while on trek and experiment on other weekends. One such was a bucket list experiment. I still remember how fun it was.

There were times when we were in office for like 3 days straight working on things, eating and having fun. These set of people are one of the most awesome team I have worked with till now. We also took part in various hackathons and won one of them. It was again very exciting. When you work with the hardworking and intelligent set of people you gain a lot personally and professionally and this is what had happened with me at practo.

During the same time, practo was also going through radical changes and I was then given the opportunity to work with the frontline team and make them successful. I worked with them for 3 months. These people are so full of energy and always ready to give their 100%. We just made some ground rules and made sure we have each other’s back. The performance increased by 20% month on month. And all this because of the team and their hard work.

My 2.2 years at practo is one of the best times I ever had in my life. Learned and implemented a lot of things personally and professionally. These memories are for a lifetime and will always stay with me. I had to part ways because of some personal reasons but I would love to be back and work with some of the great minds.

Special thanks to Amal Sir, Mohan Sir, Paharia, Pradip, Deepesh, Vipin, Pavan, Sid and My team for making my stay at practo a journey worth remembering.

Practeon by heart always.