“The deepest need in human nature is the craving to be appreciated.” William James, Psychologist and Philosopher
Recognition is probably the most powerful tool that managers have. They should know that people should not be recognised according to a set policy. It should come naturally. Those who deserve praise should get it and those who don’t should not.
That is the simple principle by which capitalism works and, to a large extent, the principle by which I believe companies and organisations should operate.
However, it does not always work in the real world, as managers are human and do not always understand this principle or apply it. We therefore need some frameworks in order to make sure recognition does happen.
Globoforce Worldwide recently ran a very useful article detailing such a framework which I thought was very useful. It was entitled “Recognition Best Practice”, and I have adapted the 15 building blocks suggested as being the foundation of a good recognition strategy.
1. Create one universal programme.
The first building block of successful recognition is simplicity of design. To be successful, you must create a single, centrally-managed, global programme that is accessible to all employees, in all departments, everywhere in your organisation and everywhere in the world. Make sure giving recognition is easy, intuitive and fast for people who want to nominate and congratulate co-workers. And make sure approvals are streamlined and include automatic notifications. It must be universal – with a unified focus and one brand, no matter how many locations or languages you support. This connects your entire workforce around common values and business objectives. It should reward equity and compliance with tax laws. This will cut costs by letting you streamline your recognition programmes. And it allows you to easily measure both your programme – and your culture – around the world.
2. Level the recognition field.
A common and costly mistake some companies have made in their approach to recognition is constraining it to hierarchy and departmental silos. If managers are the only distributors of recognition – and can thank only their direct reports, you miss huge opportunities to measure and manage your culture. A great recognition programme empowers and inspires all employees to recognise peers, managers and subordinates – across departments and geographies – wherever appreciation is deserved. When you give employees permission to recognise anyone in the organisation, you make everyone keepers of the company culture, and you foster a true culture of recognition.
3. Offer a broad winners’ circle.
To create positive change, your programme must actually touch your employees. Gone are the days of the uninspiring employee-of-the-month award with its reserved parking spot for the one “winner” in your company. Your superstars are already performing well for you – recognition should also cover the biggest part of your bell curve. Those employees are the engine of your company’s success and when the winners’ circle is an exclusive party, they are all made to feel like losers. The best practice for recognition is to reach 80%+ of your employees annually. Many frequent, lower value awards touch a greater number of people across your organisation and motivate everyone to make contributions worthy of praise.
4. Give timely, specific recognition.
Stale recognition is ineffective recognition. Recognition shouldn’t be a once a year activity. To positively affect behaviour and reinforce values, workers need consistent, ongoing feedback. Gallup’s Q12 survey, which is designed to measure employee engagement, found that companies whose employees had received recognition or praise for doing good work in the last seven days had 10% to 20% higher productivity results. A study by Stanford’s business school of effective recognition programmes found that recognising of five to eight percent of employees per week was a good benchmark for success.
5. Link to company core values and objectives.
A recognition programme that is not linked to core values is like a ship with no navigation – aimless. It’s a wasted opportunity, because recognition imbued with company values is a vehicle to get your values off the plaque in the hallway and injected into actual employee behaviour. In fact, research from Deloitte has shown that managers of higher profitability companies were 12% more likely to have a strong focus on core values and corporate culture. And a recent report from Bersin & Associates found that “those organisations that recognise employees for demonstrating company values, displaying certain identified behaviours and achieving company goals are more effective at enabling recognition than those that do not incorporate these attributes.”
6. Gain support of senior level executive champions.
Research firm Blessing White found that workers who trust senior leaders are more engaged in their work. To drive the adoption and effectiveness of your programme, senior leaders must champion it behind the scenes, and embrace and evangelise it publicly.
7. Invest one percent or more of payroll.
One of the most common questions that come once a company has decided to build a recognition culture is, “What should we be investing?” Two percent + of payroll is the mean average for recognition spend, according to a World at Work survey, and that is a benchmark for top performing companies. But experts agree that you should dedicate at least one percent of your payroll for recognition.
8. Put recognition in the palms of their hands.
Workforces are more mobile than ever before. People are busier than ever before. Making your recognition programme portable, simple and easily available will make it more successful. In fact, a great recognition solution allows people to access the programme from their desktops, their laptops or from their cell phones. Make sure they can do any of the core activities nominate, approve, receive, congratulate – from all of those places, and also be sure all of these activities are captured on one consistent platform so that you have all the data at your fingertips.
9. Provide proportionate local awards for all regions.
Here are many horror stories about global merchandise awards backfiring – choices made in one country clashing with another’s local customs, awards in different countries being wildly erratic in value, or even gifts that have no value at all because they are locally irrelevant. The best practice for award giving is that the rewards be local, proportionate and appropriate. An award should have equal value all around the world and properly adjusted for local standards of living. It should also be locally relevant no matter where in the world an employee resides.
10. Brand your culture.
A top recognition programme will transform your culture for the better. So own it. Brand it. Create a recognition programme that your people identify with emotionally. Make sure it accentuates your company’s brand promise and corporate values. At some companies, the names of recognition programmes become verbs. Roam the halls of Amgen, whose recognition programme is called “Bravo!” and you may well hear an employee say, “I just Bravo’d my co-worker.”
11. Leave cash off the table.
Everyone enjoys cash, but when it comes to recognition, cash is not king. Studies show that cash awards tend to be lumped in employees’ minds with compensation and become quickly forgotten. Cash rewards tend to be spent on everyday bills or disappear into household accounts. More tangible non-cash rewards offer a more emotionally powerful and memorable experience.
12. Communicate with and train your people.
You can build the greatest recognition platform in the world but if people don’t know about it, it’s all for nothing. Build a solid communications plan around your recognition programme – from pre-launch, launch to post-launch. Make sure that employees understand the company’s recognition philosophy, and get new employees excited about the programme by making sure recognition training is part of your standard on-boarding process.
13. Make it social. Make it peer-to-peer.
Like most things in life, recognition is more fun and more contagious when it’s not limited to an elite few. When you encourage employees to recognise one another’s achievements and contributions, regardless of role or department, not only is it more fun, but you get more people on the lookout for behaviours that demonstrate corporate values, which will serve to reinforce them across your organisation. And by making recognition “social” – allowing people to easily see their co-workers’ awards and add their own congratulations – you amplify the experience, and directly impact business results. But a warning note on this one: unless you’re a big fan of allowing outsiders seeing company information, keep it social within the walls of your organisation.
14. Monitor and measure.
When you have a unified recognition programme, and your corporate values are woven into that programme, you can easily monitor and measure it.
15. Leverage your crowd-sourced data.
Recognition is an essential motivational tool. Great managers and leaders get that intuitively. But here’s what many managers haven’t figured out about recognition: strategic recognition collects a treasure trove of powerful information and data about your talent and about your culture. This crowd-sourced information about your organisation can be used to gain deep insights into which values are thriving and which employees are excelling. Be sure that your recognition programme is not letting that data slip through your fingers. Offer it to managers to facilitate better talent and performance management, and use it to better measure and manage your corporate culture.
Once your company has implemented a comprehensive recognition programme, it is important that its impact is continually monitored. There are, once again, a few ways of doing this – I found this to be an extremely comprehensive one.
This paper, titled “Measuring Recognition” was also taken (and edited) from Globoforce Worldwide, May 2009 edition. On reading it, I thought it gave a very comprehensive understanding of how recognition should work. It has been edited but the pith of the article remains. It carries the mantra “What gets measured, gets done. What gets rewarded gets done well”.
The benefits of implementing strategic employee recognition are clear. For employees, strategic recognition contributed to:
A 26% increase in employee commitment to the company (Intel);
A measurable culture change in just six months (Symantec); and
An increase in employee satisfaction scores by 20% (Dow Chemical).
Strategic recognition also helps achieve executive goals while impacting the bottom line by:
reducing spend on recognition initiatives by approximately 50% while dramatically increasing the number of employees recognised (global, distributed manufacturing firm);
motivating 93% of employees to sustain high performance (Intuit); and
influencing employee behaviours to achieve strategic goals (Amgen).
Yet many companies with the means and desire to measure the value of their “people initiatives” fail to do so. A recent Globoforce market research study showed a staggering 42% of organisations are not measuring the results of their recognition programmes in any way, leaving CEOs in the dark on programme effectiveness and wasting the money invested.
Executives know recognition is critical to boosting morale and performance. Yet they are unaware of how their investment is being used to recognise employees and if these investments are successful against measureable goals.
Five steps to measurement success
1. Determine metrics of recognition success.
Programme costs demonstrate how programme costs have gone down while results have increased. Productivity and performance impacts direct correlation in improvements in employee productivity measures, personal or group performance targets or other key performance indicators, relative to involvement in the recognition programme. By using company values and strategic objectives as reasons for recognition, executives can determine what divisions, regions or teams do not fully understand the strategic objectives or demonstrate the values necessary for success.
Only those touched by the programme (programme reach) can be measured for improvements in morale and productivity.
2. Establish a performance baseline for recognition.
Once the metrics for success have been established, a baseline of current performance must be determined (see the illustration on the next page). This serves two purposes. First, this baseline clearly illustrates the status of employee morale, productivity and performance relative to legacy recognition and incentive initiatives. Second, it gives a level-set against which future success can be compared. Without a baseline, it is impossible to accurately or credibly report percentage improvements in any of the areas discussed above.
3. Measure regularly and consistently.
Measurements should be taken via the programme itself and through employee surveys. A strategic recognition programme should provide reporting functionality for budget-spend; reasons for recognition by team, group and/or division; and programme reach. Programme understanding, adoption and true cultural impact, however, should be measured through a regular employee survey that targets all employees annually and a percentage of employees more frequently.
4. Analyse results and identify trends.
Once recognition programme results are available through the programme itself and from employee surveys, analyse the results to look for trends. Be sure to compare the results between these two measurement tools as well. Any dissimilarities could uncover a communication disconnect. For example, though employee surveys may be anonymous, if a high percentage of employees surveyed in a division report not receiving adequate recognition, but a similarly high percentage of employees in that division are being recognised through the programme, then two potential problems should be addressed.
5. Report to the target audiences in a way that matters.
Solid results allow for custom reporting for various audiences. While programme metrics of success should target executive desires, line managers and employees themselves should also be advised of programme success. However, the same results are not relevant to all audiences.
Employees report to employees on recognition stories from colleagues across the company, demonstrating appreciation for employee efforts by the company, and continued investment in recognition going forward.
Managers report to managers on performance of a group or division against programme targets and retention of top performers. Stories of individual success within the area of managerial responsibility and dashboard reporting functionality are preferred to give both the flavour of recognition along with the hard metrics of success.
Executives report to executives on programme cost savings; understanding of values and objectives, and improvements in morale, productivity and performance. Easy to view dashboard reports that link programme results to desired executive outcomes, including trends over time, are the preferred option.
Recognition is not only a truly basic human need, but it has become necessary in order for a company to succeed. It is a sad fact that so few companies use this very powerful tool in order to motivate employees, but it is a very promising sign that it has become such a hot topic in our field. I hope that you, as a Human Resource Executive or Practitioner, will take this further.
Dr Mark Bussin is the Executive Chairperson at 21st Century Pay Solutions Group, www.21century.co.za, a Professor at University of Johannesburg, Professor Extraordinaire at North West University, Chairperson and member of various boards and remuneration committees, immediate past President and EXCO member of South African Reward Association, and a former Commissioner in the Office of the Presidency.
This article appeared in the September 2015 issue of HR Future magazine.