02/20/2015 02:26 pm ET Updated Apr 22, 2015

Love 'Em or Hate 'Em, the Oscars Offer a Lesson in Talent Management

The Academy Awards are the year's biggest event in Hollywood, attracting millions of viewers. While the glitz and glamor (and endless thank-you speeches) are not everyone's cup of tea, small-business owners should pay attention to the ceremony for one reason: a lesson in talent management.

Recognition for good work can go a long way toward improving morale and boosting performance in any business, and the hours-long red-carpet event is nothing if not a pat on the back for work well done. Of course, it's not perfect. Here's a look at some recognition dos and don'ts from Hollywood that small businesses can use to attract top talent, retain great employees, and boost the bottom line.

Key Lessons From The Oscars

  • Recognize great work. Maybe the most important lesson from the Oscars is the ceremony itself. Recognizing excellent work as a regular part of operations can do wonders for a small business. Many small businesses aren't able to compete with larger firms on salary and benefits, but if they offer employees a rewarding place to work and an opportunity to be recognized for the things they accomplish, it's possible to make up some of the salary shortfall.
  • Be specific. At the Academy Awards, the theater plays clips of nominated films to demonstrate some of the qualities that made the films winners. In a business context, it's equally important to communicate what specific elements of an employee's performance stood out (persistence? creativity? the ability to inspire a team?) and how those qualities help your business succeed. This sets the stage for other employees to hand in similarly stellar work.
  • Shine a light on "invisible" contributors. Mainstream audiences rarely have a favorite for the Sound Mixing or Production Design awards, but without people doing these behind-the-scenes jobs, the candidates for Best Picture and Best Actress would look much less impressive. That's true pretty much everywhere. We've all seen top sales representatives get lavish bonuses for their work, but it's rare to see praise for the guy who meticulously updates the software every day so that they can do their jobs. Taking the time to let supporting players know you appreciate how they contribute to the bottom line can go a long way toward winning their loyalty and dedication to your business.
  • Make sure your reward is meaningful. The Oscars are prestigious. Nobody who wins an Oscar has to explain its significance. While that doesn't mean small-business owners need to go out of their way to establish an elaborate rewards system, it does mean some thought should go into what rewards and recognition are offered. If expensive gifts or large bonuses aren't an option, small signs of gratitude - like buying a nice lunch or rewarding an employee with an afternoon off - can go just as far.
  • Don't recognize everyone in the same way. At the Academy Awards, recognition is a one-size-fits-all affair: everyone gets the gold statue and everyone comes up to the stage. In real life, though, different kinds of recognition and rewards motivate different people. Some employees want a big to-do in public. Some want a heartfelt email in their inbox one morning. Knowing which kind of recognition will actually make your employees feel good (as opposed to embarrassed or undervalued) is just as important as knowing whom to recognize. Put differently: the medium matters as much as the message.
  • Don't recognize achievement on a set schedule. This is something the Oscars gets wrong. One way to increase the perceived value of recognition is to offer it when appropriate, rather than on a predetermined schedule. When something goes right, jump at the opportunity to praise the people who made success possible.
  • Use your power as a sole owner to shape your business. The Academy of Motion Picture Arts and Sciences has almost 6,000 members, all of whom vote on the winning films. Small-business owners, on the other hand, get to make decisions on their own about who's doing the best work. Because of this, recognizing employees is an opportunity to communicate what you want and shape the future direction of a business. Highlighting the things that push your business toward its goals is one way to ensure that you achieve those goals.

The good news for small-business owners is that recognition doesn't have to be doled out during a costly, star-studded event to be meaningful. But it should be part of any business that has employees.

Ted Devine is the CEO of insureon, an online small-business insurance agent.