Think Strategically About How You Recognize Employees

Effective employee-recognition programs bolster engagement, reduce turnover and drive better behavior and performance

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If your company doesn’t already have an employee-recognition program, it’s a good idea to start one. And if it already does, perhaps now is a good time to evaluate and determine if it’s accomplishing what it should: align with your business mission and values and drive employee performance.

That advice comes from employee-recognition guru Debra Corey, the global head of employee engagement at Reward Gateway. The firm develops technology platforms for things such as employee communication, recognition and well-being programs.

“Over the years, I’ve seen too many employee-recognition programs that aren’t strategic enough and don’t align closely enough with a company’s mission, purpose and values,” says Corey, author of Build It: The Rebel Playbook for World-Class Employee Engagement (written with Glenn Elliott). “Companies that are getting it are moving toward being true business partners (with employees) and driving business performance through human resources programs, including reward and recognition.

“Recognition needs to be strategic … aimed at motivating the type of behaviors you’re trying to encourage so your business can succeed.”

Hard-core doubters should take note of the documented benefits of recognition programs, which have been detailed in studies performed over the years. For example, data collected by Bersin by Deloitte, a global research-based consulting firm, shows that employee engagement is 14% higher at companies with effective recognition programs, compared to those with no programs.

In a study performed by Reward Gateway, 54% of respondents say they’d rather work for an organization with a recognition-oriented culture than one where they’d get a higher salary increase but no recognition. In addition, another Bersin study indicates companies with effective recognition programs can reduce employee turnover by about 30%.

Developing a Sound Strategy

Too many recognition programs miss the mark because they’re not strategic. As an example, Corey cites a program at one company she worked with that rewarded top salespeople with cash bonuses. Only one problem: It backfired.

“The company needed those salespeople to collaborate with each other and work as a team,” she says. “But by giving them bonuses, everyone was working for themselves — not for the company.”

Then there are the organizations that proudly recognize nothing more than employee tenure. In fact, another recent Bersin study estimates that companies spend a whopping $46 billion a year on recognition rewards, and 87% of them focus on years of service. Corey is not a fan.

“Service awards are nice, but if my husband told me he loved me only every five years, I’d probably leave him,” she says.

So what’s the alternative? Corey advocates what’s called continuous, peer-to-peer recognition, in which employees have access to digital technology that allows them — not just managers — to send out digital pats on the back to colleagues. Social media platforms and other technologies provide effective channels for raising the visibility of these digital recognitions, she says.

Reward Gateway, for instance, developed a recognition program called MORE (Moments of Recognition Everyday) that drives employees to embrace its eight core values: love your job, be human, work hard, own it, push the boundaries, delight your customers, speak up and think global. They all emanate from the company’s mission statement: to make the world a better place to work.

Peer-to-peer recognition is a core component. Using the company’s intranet platform for instance, employees can send out digital e-cards. Known internally as “high-fives,” the cards qualify as “continuous” because they can be sent at any time; they recognize things like positive attitude, volunteering, proposing a new idea or demonstrating Reward Gateway values.

“If someone helps me out with something, I can quickly send them an e-card,” Corey says. “We use them for our clients, too. 

“Everyone has access to them. You just go to the company’s intranet website, choose a digital card and click on it, and then click on the name of the person you want to send it to. You can even send one to multiple people at the same time. The e-cards also get posted on a social recognition wall (on the intranet), similar to Facebook or Instagram, where other employees can add comments.”

Furthermore, for those keeping score, employees can see on the intranet site which employees have received the most rewards.

Timely Rewards

Continuous recognition works because it’s given “in the moment,” which makes it more effective, Corey says. Employees can even send them from their cellphones. “It’s better when you can send recognition right away, before you forget about it,” Corey says. “Technology is making it really easy to give continuous recognition. It doesn’t cost anything, and it takes just a minute.”

Peer-to-peer recognition trumps having only managers provide recognition because it casts the reward net so much further.

“If you think about it, a manager will see you do some things,” Corey says. “But people who work with you day in and day out see a lot more of what you do.”

Of course, moderation is critical; there can be such a thing as too much recognition — a flood of digital high-fives that dilutes the value of the sentiment. That’s why it’s important to train employees and emphasize that recognition must be meaningful in order to be effective, Corey says.

The MORE program offers three other levels of recognition. The next step up is called “you rock” awards, in which employees can send colleagues gifts that cost up to about $15 — think a box of chocolates, movie tickets or a bottle of wine. Behavior examples include constructively responding to change or sharing knowledge that helps others grow professionally. To avoid busting the budget, employees are limited to sending only 10 of these awards a year.

The third level of recognition, known as “game-changers,” are awarded only by managers. They offer slightly larger rewards, such as dinner for two, and recognize behaviors such as completing stretch goals, succeeding under pressure, or committing extra time to support a team member outside their day-to-day role. At the top of the company’s recognition pyramid stands LAA recognition, an acronym for Leadership Amazing Award. Employees are eligible if they go above and beyond to live the company’s values; examples include thinking bigger than themselves and tackling challenges significantly above their usual responsibilities.

The Why and the What

The hardest part of developing an effective recognition program is deciding why people should be recognized — what strategic goals and values should serve as the criteria — and what they should receive for that recognition. Corey says a good benchmark for budgeting for recognition rewards is 1% of a company’s payroll. Moreover, the level of gift should be appropriate, and the reason for the reward and the gifts employees receive should be reviewed periodically to be sure they remain aligned with corporate goals and values.

“At our company, we’re not financially driven at all,” Corey says, noting that rewards don’t have to be expensive to be effective. “We don’t want something big — it’s not our culture to, say, give a $500 reward for recognition. I’m not saying that’s right or wrong, but we just prefer smaller rewards (that are more attainable).

“When we rolled out the program, it was my wish that everyone in the company gets a ‘you rock’ award … that everyone thinks about what they can do to go above and beyond to get recognized.”

Moreover, larger rewards can also backfire because they can create envy among unrewarded employees who may feel strongly that they deserve recognition, too, Corey notes.

In the end, a good, transparent recognition program creates a level playing field for all employees to be recognized for their good work. And using social media to publicize it maximizes exposure for the company’s best performers, which in turn can motivate others to emulate those optimum, value-driven behaviors. As Corey points out, “It lets all employees see what good looks like.”



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