Recognition

An ExpErt’s GuidE to BuildinG CulturE & EnGAGEmEnt throuGh rECoGnition

by the idea of creating a true culture of recognition?

This guide offers a primer on the best practices for employee recognition, with practical tips for getting maximum results in culture management and employee engagement.

The deepest principal in

—WilliAm JAmEs, psyCholoGist & philosophEr

human nature is the

craving to be appreciated.

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There’s nothing greater in the world than when somebody on the team does something good, and everybody gathers around to pat him on the back.

—Billy mArtin

The first building block of successful recognition is simplicity of design. To be successful, you must create a single, centrally-managed, global program that is accessible to all employees, in all departments, everywhere in your organization and everywhere in the world. Make sure giving recognition is easy, intuitive and fast for people who want to nominate and congratulate coworkers. 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 programs. And it allows you easily measure both your program—and your culture—around the world.

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 program empowers and inspires all employees to recognize peers, managers and subordinates—across departments and geographies—wherever appreciation is deserved. When you give employees permission to recognize anyone in the organization, you make everyone keepers of the company culture, and you foster a true culture of recognition.

Create one universal program.

Level the recognition field.

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To create positive change, your program must actually touch your employees. Gone are the days of the uninspiring employee-of-the-month award with its reserved parking spot 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 organization and motivate everyone to make contributions worthy of praise.

Stale recognition is ineffective recognition. Recognition shouldn’t be a once-a-year or even once-a-quarter activity. To positively affect behavior 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 results1. Frequency of recognition also helps keep workers satisfied in their jobs: a recent Mood Tracker survey showed that employees who were not recognized within the last six months were 74% more likely to be job searching than those who were2. How often should you recognize? A study by Stanford’s business school of effective recognition programs found that recognizing of 5-8% of employees per week was a good benchmark for success3.

offer a broad winners’ circle.

Give timely, specific recognition.

People often say that motivation doesn’t last. Well, neither does bathing – that’s why we recommend it daily. — ZiG ZiGlAr

Last recognized morethan 6 months ago

Employee Engagement

Last recognizedwithin six months

Frequent recognition = Better engagement

Source: Globoforce Mood Tracker Fall 2012

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A recognition program 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 behavior. 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 culture4. And a recent report from Bersin & Associates found that “those organizations that recognize employees for demonstrating company values, displaying certain identified behaviors and achieving company goals are more effective at enabling recognition than those that do not incorporate these attributes.”5

Research firm Blessing White has found that workers who trust senior leaders are more engaged in their work6. Because senior leaders should be the architects and caretakers of your corporate values, mission and objectives, they should be evangelists for your strategic recognition efforts. Executives should lead by example, not be passive witnesses to cultural change. To drive the adoption and effectiveness of your program, senior leaders must champion it behind the scenes, and embrace and evangelize it publicly.

link to company core values & objectives.

Gain support of senior level executive champions.

The great leaders are like the best conductors – they reach beyond the notes to reach the magic in the players. —BlAinE lEE

Engagement Levelof All Employees

Engagement Level of WorkersWho Trust Their Execs

Engagement Levels

50%

33%

Most Profitable Companies

Stated Importance

of Values

Least Profitable Companies

4.42

4.23

Companies Rated Importance on a Scale of 1 (Not Important) to 5 (Extremely Important)

Last recognizedwithin six months

Last recognized morethan 6 months ago

Employee Engagement

engaged executives Have engaged Workers

ProFitaBle comPanies Prioritize values and culture

Source: Blessing White (North America)

Source: Deloitte

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One of the most common questions that comes once a company has decided to build a recognition culture is “what should we be investing?” 2.0%+ of payroll is the mean average for recognition spend, according to a World at Work survey, and that is a benchmark for top performing companies7. But experts agree that you should dedicate at least 1.0% of your payroll for recognition. That is supported by SHRM/Globoforce research, which has shown that companies who spend at least 1% on payroll have higher engagement and better overall business results8. Moreover, the money allocated to a new recognition program can often be found in legacy programs that are not nearly as effective or impactful as a unified strategic recognition program.

invest 1% or more of payroll.

Workforces are more mobile than ever before. People are busier than ever before. Making your recognition program portable, simple and easily available will make your recognition program more successful. In fact, a great recognition solution allows people to access the program 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. But also be sure all of these activities are captured on one consistent platform so that you have all the data at your fingertips.

put the recognition in the palms of their hands.

Last recognizedwithin six months

Last recognized morethan 6 months ago

Employee Engagement

Companies spending less than1% of payroll on recognition

Companies spending 1% or moreof payroll on recognition

Recognition Program Has a Positive Impact on Employee Engagement

74%

85%

Source: SHRM/Globoforce Employee Recognition Survey

HigHer engagement levels

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There 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. That means an award should have equal value all around the world and properly adjust for local standards of living. It should also be locally relevant no matter where in the world an employee resides, so that an employee who lives in China can have an equitable reward and the same lasting emotional impact from his award as one who lives in Canada.

provide proportionate, local awards for all regions.

A top recognition program is going to transform your culture for the better. So own it. Brand it. Create a recognition program 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 programs become verbs. Roam the halls of Amgen, whose recognition program is called “Bravo!” and you may well hear an employee say “I just Bravo’d my coworker.” Talk to an employee of JetBlue and hear her say “I got Lifted today.”

Brand your culture.

$3.75

U.S. BRAZIL INDIA MEXICO

$1.75 $1.00 $.90 $.75

CHINASource: pintprice.com

2X 4X 4X 5X

Source: pintprice.com

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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. Employees actually find alternatives to cash more meaningful. The shopping experience provided by gifts and merchandise offers a more lasting reminder of achievement. Plus, cash is less motivating—in fact, a University of Chicago study in 2004 found that when compared to cash, non-cash incentives doubled performance improvement levels.9

Leave cash off the table.

Q. Imagine you are given a $25 value reward by your manager. Which would you find most meaningful?

Logo Items

50%Cash in Paycheck

41%

7%3%

Catalog Gifts

Gift Cards

Recognition Program Has a Positive Impact on Employee EngagementQ. Imagine you are given a $25 value reward by your manager.

Which would you find most meaningful?

Logo Items

50%Cash in Paycheck

41%

7%3%

Catalog Gifts

Gift Cards

Recognition Program Has a Positive Impact on Employee Engagement

Last recognized morethan 6 months ago

Employee Engagement

SPENT ON BILLS

Companies spending less than1% of payroll on recognition

Companies spending 1% or more of payroll on recognition

Recognition Program Has a Positive Impact on Employee Engagement

74%

85%

28% DON’T REMEMBER

17% DIDN’T GET ONE

15%

?X

WHat is most meaningFul?

HoW did you sPend your casH reWard?

Source: Globoforce Mood Tracker Fall 2012

Source: 1999 Wirthlin Worldwide Survey

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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 recognize 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 behaviors that demonstrate corporate values, which will serve to reinforce them across your organization. And by making recognition “social”—allowing people to easily see their coworkers’ 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 organization.

make it social. make it peer-to-peer.

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 program—for pre-launch, launch and post-launch. Make sure that employees understand the company’s recognition philosophy, and get new employees excited about the program by making sure recognition training is part of your standard on-boarding process.

Communicate and train your people.

Engagement

Yes we use peer-to-peer

No we don’t use peer-to-peer57%

46%

Productivity

32%

27%

EmployeeRetention

28%

21%

Profitability

31% 28%

Customer Retention

32%

18%

Customer Satisfaction

41%

30%

Peer-to-Peer recognition gets results

Employees who don’t feel significant rarely make significant contributions.

— mArk sAnBorn

Source: Fall 2012 Globoforce Workforce Mood Tracker

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When you have a unified recognition program, and your corporate values are woven into that program, you can easily monitor and measure all facets of the program. You can quickly see where recognition is happening, what your program spend is on a weekly basis, in which divisions recognition is strong and in which divisions it’s anemic, which values are being recognized most in different geographic areas, and the list goes on. Be sure you’re easily able to keep tabs on the metrics that matter most to your organization.

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 crowdsourced information about your organization can be used to gain deep insights into which values are thriving and which employees are excelling. Be sure that your recognition program 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.

monitor and measure.

leverage your crowdsourced data.

What gets measured gets managed.

— pEtEr druCkEr

Data Deficient Organizations

stock value % cHange last 12 montHs

+4.6% -3.0%Data ProficientOrganizations

HCI/Tale

o

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globoforce.com »How does your recognition program compare to best practices?

Take the Recognition Grader assessment and find out: www.recognitiongrader.com/blueprint

Appreciation is a wonderful thing:

—VoltAirE

It makes what is excellent in othersbelong to us as well.

sources1http://strengths.gallup.com/private/Resources/Q12Meta-Analysis_Flyer_gen_08%2008_BP.pdf

2http://www.globoforce.com/mood-tracker-fall-2012

3https://gsbapps.stanford.edu/cases/detail1.asp?Document_iD=3073

4 https://www.deloitte.com/view/en_US/us/insights/Browse-by-content-type/deloitte-review/2472dacb2bea9210VgnVcM100000ba42f00aRcRD.htm

5http://www.bersin.com/practice/Detail.aspx?id=15539&p=talent-Management

6http://www.blessingwhite.com/eee__report.asp

7http://www.worldatwork.org/waw/adimLink?id=51194

8http://www.globoforce.com/fall-2012-the-business-impact-of-employee-recognition

9 http://bfi.uchicago.edu/events/20111028_experiments/papers/Levitt_List_Neckermann_Sadoff_Short-Term_Incen-tives_September2011.pdf

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