By Jerry McLaughlin (Published October 26, 2010)
Imagine these scenes, if you will. A few short weeks before the annual company event and the team is scrambling to hobble together awards for the evening. A box of well-intended t shirts locked up safe in the HR storage closet for the past six months…next to that stack of plaques begging to be engraved.
Of all the HR motivational tools and programs available, employee recognition programs continue to deliver the most value and ROI. They are intrinsically valuable for employee engagement. But too often these programs do not live up to their inherent potential. Instead organizations are left with waste and “failed” recognition programs relegated to second-tier status.
These programs falter and abandoned prematurely because they are not carefully positioned as a key business goal. Building a recognition culture takes a sustained commitment, attention, and, fortunately, not much money.
If some of this is hitting a bit too close to home, you aren’t alone. We all have a lot of work to do. Human Capital Institute’s “The Economics of Engagement” study released last year included a 2008 Gallup study. (http://theirf.org/direct/user/file/pdf/Economics-of-Engagement-White-Paper.pdf)
It found that only 29% of workers were engaged, while 54% were “not engaged” and 17% were actively disengaged. Gallup also estimates the cost of disengagement to the national economy is hundreds of billions of dollars each year. Yes, that’s “b” for billions.
The results of those who do engage and recognize are eye-popping, according to Human Capital Institutes’ 2009 “The Value of and ROI of Employee Recognition” white paper based on their in-depth report. (http://theirf.org/direct/user/file/pdf/Value-and-ROI-in-Employee-Recognition.pdf)
The authors write: “Business units within organizations with higher-than-average levels of engagement find success at four distinct types of business outcomes:
- Productivity—Business units in the top quartile of all engagement responses have 50% higher productivity than those in the bottom 25%.
- Employee Turnover—Business units in the top quartile have a 13% higher success rate (lower turnover) in comparison to those in the bottom 25%.
- Profit—Business units in the top quartile have 44% higher profitability than those in the bottom 25%.
- Customer Satisfaction—Business units in the top quartile have 50% higher customer satisfaction than those in the bottom 25%.”
It’s time to promote your recognition programs, and make these programs work to further your own employee engagement strategies. In this still beleaguered economy, employee motivation may be your trump card to instill morale and retain talent despite organization-wide budget constraints.
Recognition, Awards, and Engagement
The number and types of recognition programs vary across all companies. With no one-size-fits-all, it’s imperative to research and determine what will work for your own culture and employee demographics.
For example, the heady days of a start-up require more day-to-day recognition, to keep engagement and recognition high in the midst of packed days and long nights. Larger corporations must place greater emphasis on more formal annual awards, travel incentives, and event recognition. That’s not to say a Fortune 1000 organization can’t surprise and delight employees on more focused day-to-day levels too.
From a post-launch thank you, to motivation for strategic business goals and values, a small gift to each employee or certain teams gives a personal touch that goes beyond the compensation bonus.
Further Gallup research in “The Value and ROI in Employee Recognition” also provides great insight citing that “the best programs are those combining formal and informal recognition, and providing them frequently, thereby creating a culture of recognition that better motivates people to increase their performance.”
With any recognition route you take, a great measure of success is the fact that it’s anticipated with excitement by employees and with the certainty that recognition will happen again.
However, it’s also crucial to make a plan. Collaborate, write it down, and set time tables and business goals attached to each. These key deliverables aligned with business strategies will make the difference between success and failure. Linking it to your organization’s overall goals is the only way to create a cohesive, and not haphazard, program that can provide measurable results.
Which Gifts Work?
With the vast array of recognition programs, many HR departments are equally daunted with the task of what to actually purchase as gifts.
One major component to keep in mind is the importance to tier gifts and provide a variety of rewards. What is valuable to one employee, may be not as practical to another. Consider your workforce and what may appeal to them on different levels. High-end recognition gifts range from engraved gift sets and electronics, to the tried-and-true executive pen or other traditional items. And it’s great to be creative, but keep practical gifts such as travel mugs, aluminum water bottles, or tote bags, in play as well. They are still appreciated and, most importantly, put to use.
For awards programs, consider logo merchandise with the plaque, or other branded company products along with the gift card. Why double the gift and spend more money? Pretty simple. While the plaque is important and will do much for motivation and pride, it will hang on the wall or propped against the back of the cube. And that’s it. No other eyes will ever fall on it except their coworkers and visitors.
If you have recognized, motivated,and engaged employees, make sure they are carrying the company with them and often. A branded company gift provides the opportunity to get your best spokespeople — your engaged and recognized employees – to represent the organization out in the world. If someone asks about that water bottle of if they work there, it sparks the opportunity for them to talk more about the company. And your marketing department won’t be too disappointed either with the additional exposure.
Remember that cash isn’t king for employee recognition. While gift cards and bonuses are typically aligned with specific incentive programs, recognition programs are more item-oriented. Keep it personal! If your awards program veer toward gift cards, make sure there is also something concrete attached with it. Employees love gift cards, but they will spend it and that’s the end of it. No tangible remembrance or continued use and enjoyment. Remember to include either a specialized gift or logo merchandise so that the memory of that award crosses over to daily life.
Best Principles To Move Forward
The secret recipe for a successful employee recognition program consists of commitment, frequent recognition, planning aligned with business goals or values, and the right gifts.
Human Capital Institute’s “The Value and ROI of Employee Recognition” also summarizes a fantastic list of best practices to keep in mind. This should be referenced as much as possible when planning:
- “Develop a ‘recognition strategy’ that rewards activities linked to specific business objectives and/or desired cultural values.
- Use both formal and informal recognition to build a ‘culture of recognition’ in the organization.
- Provide a wide variety of recognition rewards—realizing that what is a reward for one person may not be for another.
- Emphasize the recognition of increased quality in performance, instead of simply quantity of effort.
- Recognize workers frequently—sporadic recognition may, in some cases, be worse than no recognition.
- Measure the cost of the recognition reward system and the benefits gained – whether through ROI or other methods.”
It’s time to prioritize our employee recognition programs as an important business objective again. Not only does it help boost our bottom line in this economy, but also the spirit of our workforce. Let’s get back to recognizing and giving. We’ll receive much in return.
About the Author
Jerry McLaughlin is CEO of Branders.com, the world’s largest online promotional items company. Branders.com has put more logos on more items for more people than anyone else on the planet.