Thursday, October 3, 2013

Employee Recognition Programs – Pass or Fail?

Employee recognition programs are all the rage, and actually have been for decades. As business leaders, we want to show our employees that we appreciate their hard work, and especially appreciate when they perform above and beyond the standard expectations. But, are we getting it wrong?

A research project completed by Bersin & Associates came up with some very interesting results. In organizations where recognition occurs, employee engagement, productivity and customer service are about 14 percent better than in those where recognition does not occur. However, while millions of dollars are spent on various recognition programs, 87% of those programs focus on tenure (service awards); recognizing people for staying with the company. Their research found that tenure-based programs have virtually no impact on organizational performance.

In researching for this article, I’ve found similar results from many studies and surveys. While we’re all about recognizing people, we often aren’t very effective in rewarding the behavior we really want to see repeated. It appears that we either focus on the wrong things, or structure the programs in ways that don’t motivate employees in the way we would like.

For instance:

Employee of the Month programs are a popular form of recognition. However, they tend not to be all that effective at rewarding employees. Rarely do these types of incentives identify what must be done to get the award. As a result, choosing the winner sometimes becomes a chore management must perform, deciding whose turn is it this month, or is perceived by employees as a popularity contest. Most organizations fail to establish measurable and recognizable criteria. The selection is not transparent, so it fails in its goals for employee motivation and retention.

Attendance programs/contests. Why do you feel you need to reward someone for meeting one of the most basic requirements of a job – showing up? There’s no real motivation to do a great job; showing up is not doing a great job.

Money is not employee recognition.   It’s critical to understand that money is not employee recognition. Money is compensation. Most employees look at bonuses and compensation not as employee recognition of exemplary performance but an expected entitlement.

It’s not individual.  Whether they enjoy a baseball game on the weekend or a steak dinner, it’s important you find out what your employees want. This is insight into what motivates them.  Recognition for great work should be personalized, because nothing will discourage your employees more than a ‘one size fits all" reward. 

It’s not spontaneous.  Recognition and reward should be tied to a specific achievement and received ‘in the moment’ to encourage repetition of the desired behaviors. Too often rewards and recognition are delayed until the end of the month or the end of the year.

It’s too hard.  If your employees have to jump through hoops to give or receive recognition, they’ll lose interest.  It doesn’t have to be complicated to be effective.  Avoid putting obstacles in the way by including everyone and encouraging recognition in all forms – peer-to-peer, e-cards, on-the-spot; whatever works.  Don’t be afraid to mix it up and keep it interesting to encourage involvement. 

It’s unfair.  Recognition should be an equal opportunity. If it’s structured to favor only top performers, it’s not only unfair but unrealistic for the majority of your team.  Instead, put objectives in place and tie recognition to your corporate values so that everyone has the chance to be rewarded for their input.

So, let’s go back to Bersin’s study and see what might make for good recognition programs. Examples include:

1. Recognize people based on specific results and behaviors. Give your employees awards for specific behaviors and performance. For instance, delivering outstanding customer service when a particular problem occurred. This creates a culture of "doing the right thing."

2. Implement peer to peer recognition – not top down. Employees indicated they feel much better when they are recognized by their peers. Why is this? Peers know what you’re doing on a day to day basis, so when they "thank you" for your efforts the impact is much more meaningful.

3. Share recognition stories. One of the most powerful practices identified in the study was "story telling." When someone does something great and is recognized by their peers, tell people about it. You should mention them in a newsletter or company blog. These stories create employee engagement and learning.

4. Make recognition easy and frequent. Make it simple for employees to recognize each other. People who do great things are now visible to everyone else!

5. Tie recognition to your own company values or goals. When you give someone a "thank you" award, the award is tied to your company’s strategy (customer care, innovation, teamwork, or even a revenue or cost-cutting goal). I truly believe this is probably the best way to make any recognition program a success for an organization. Rewarding employees for behavior that fulfills your mission, vision and values will serve to strengthen the organization and telegraph exactly what you, as leaders, see as important.

Other keys to good employee recognition programs:

  • Attainable and concrete goals
  • Multiple winners
  • Employee-specific rewards (i.e., what motivates a part-time, temporary employee is not the same as what motivates a long-term employee)
  • Use individual "surprises" rather than an awards banquet—it’ll keep the focus on a job well done
  • Employees at all levels should be recognized for their work, including supervisors and managers
  • Recognition programs should come from the managers who have a day-to-day interaction with the employee, the one who manages, appraises and corrects them.

Ultimately, use your organization’s core values as a foundation to your recognition program. Your core values should be a guideline for your employees to know which behaviors you value as an organization and which behaviors will be rewarded.

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