Many managers are on a perpetual guilt trip over not giving their employees enough praise or recognition.

After all, they have been told by astute experts such as the Gallup organization that these are key to employee engagement and productivity, and even impact company profitability. Supervisors who don’t dole out praise and recognition risk watching their best employees walk out the door. 

No disagreement here — but woe to the manager who isn’t wary of this double-edged sword. 

Over the course of my career, I’ve managed several employees who were obviously rising stars. They were the “my right hand” types, whom we treated to lunch on their birthdays and work anniversaries. Their accomplishments were congratulated at company meetings. They earned high-profile projects, which allowed them to stretch themselves, demonstrate their talents, and build their case for future promotions. 

I was a shining example of a manager who doled out praise and recognition, and as a result, enjoyed engaged relationships with my employees. To coordinate their pay levels with their outstanding performance, they received the midpoint of their salary range even though they only had a couple of years in their position. 

Ultimately, transparency about your compensation methodology is the only way workers will trust management.

Despite all this, these employees never thought they were being compensated well enough for their contributions. Since they were top performers, they thought the market might value them more than I did. More than once, I wondered if all that praise and recognition led to hubris. 

The distance between their compensation and their expectations always merited a frank meeting between the two of us. I walked them through the numbers that determined their midpoint and how their pay level compared to the market rate. I also discussed with them how their high productivity could lead to a promotion. Having this compensation data at my fingertips helped us get through this rough spot, but I was forever concerned about their commitment to the company or if another company with a bigger wallet could steal my best talent. There is always someone who will pay more.

I’ve realized that praise and recognition need to be balanced with adequately addressing and documenting where employees can improve. It’s important that good employees feel valued, but nobody should think of themselves as a workplace superhero who deserves to be paid the maximum of the range and beyond. If we only celebrate achievements and don’t address opportunities for growth, employees can begin to “believe their own press” and think they are irreplaceable and can demand top salaries.

The good news is there’s a way to regain balance, even if you’ve made managerial missteps. As essential as praise and recognition is, a solid compensation strategy and a willingness to be open about it is the best way to maintain engaged relationships with your top employees. Ultimately, transparency about your compensation methodology is the only way workers will trust management.

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