These two examples illustrate a simple point: Your reward structure should explicitly recognize the importance of creative contribution.

We don’t mean to suggest that people being creative are motivated solely by money, or power, or prestige. In fact, they’re often motivated by the desire for interesting work, the challenge of a tough problem, the joy of contribution, or the satisfaction of finding something new. Nonetheless, innovation should be explicitly rewarded. All people, no matter how pure their motivations, are influenced by the reward systems of their organizations. Rewards matter. And if you want to remain innovative, you’ve got to reward innovation.

The trick to doing this is not just to tell the person how well she’s performed, or how good she is. While simple praise is by no means a bad thing, it captures a moment in the past rather than creating the possibility of more such moments in the future. Instead, what you’ll want to do is tell the person what you experienced when that moment of excellence caught your attention—your instantaneous reaction to what worked. For a team member, nothing is more believable, and thus more powerful, than your sharing what you saw from her and how it made you feel. Or what it made you think. Or what it caused you to realize. Or how and where you will now rely on her. These are your reactions, and when you share them with specificity and with detail, you aren’t judging her or rating her or fixing her. You are simply reflecting to her the unique “dent” she just made in the world, as seen through one person’s eyes—yours. And precisely because it isn’t a judgment or a rating, but is instead a simple reaction, it is authoritative and beyond question.

The deepest principle of human nature is the craving to be appreciated,” wrote William James, the father of American psychology. It is impossible to be motivated and do great work if you don’t feel that somebody cares and appreciates what you do.

Studies have shown that for people to be happy and productive at work, they need to experience positive interactions (appreciation, praise) vs. negative (reprimands, criticism) with their manager/coach in a ratio of at least 3:1. (Watch out: For a marriage to work, you actually need a 5:1 ratio!!) So make it a simple habit to thank people each and every day —

and that includes using the word generously in emails to your team.

Also, the best appreciation is about a quality in the person that is not based on the content of the person’s thinking turn. It needs to be a quality you’ve noticed in them generally.

And it needs to be free of any mention of the dynamics of the session like: ‘Your listening so well made such a huge difference to me,’ or ‘Your thinking was marvellous.’ Appreciations like that can register subtly as assessments. They can weaken the safety for the next time.

Most of us have no difficulty at all in delivering praise; that’s the fun part of being a boss. But it’s hard to criticize someone. So I spend a lot of time with my managers talking about criticism—how to deliver it, how to receive it, and maybe most important, how to think about it. We all want to be liked, and when you give someone a note about what they could be doing differently and better, you run the risk of losing their goodwill. That’s why I say there is no better way to show someone you care than by being willing to offer them a correction; it’s the purest expression of putting someone else’s needs above your own, which is what hospitality is all about. Praise is affirmation, but criticism is investment.”