Revamp Your Recognition and Rewards Program

Transcription

1 Revamp Your Recognition and Rewards Program

2 Introduction Organizations across the globe understand that one way to create competitive advantage is nurturing an engaged and empowered workforce. In fact, a recent study showed that companies with a highly engaged workforce experience 19.2 % GROWTH in operating income over a 12-month period. Unfortunately, according to Gallup ONLY 32.5 % feel completely engaged with their employer, indicating that the majority of U.S. workers are either not engaged or actively disengaged. This can prove costly to a business bottom line. For example, a study by HR research and advisory firm McLean & Company found that a disengaged employee costs an organization approximately $3,400 for every $10,000 in annual salary. Even more staggering - disengaged employees cost the American economy up to $350 billion per year due to lost productivity. Disengaged employees might show up for work, but they are less vigilant, do minimal work and don t go the extra mile for management or customers. Even worse, a disengaged employee can lead to hostile or disruptive behavior on the job. 2 Revamp Your Recognition and Rewards Program

3 So how do successful organizations better engage their workforces? This whitepaper offers insight to one piece of the engagement puzzle: recognition and rewards. While companies may have been practicing these techniques for decades, the ways in which they approach and manage these tactics need to change. Simply handing out trinkets or giving away a free lunch doesn t cut it anymore. Today s workforce wants a connection to their company s culture, vision and leadership. It seeks feedback from C-levels, managers, peers and subordinates alike, including crossdepartmental recognition and meaningful rewards that are tied to outcomes, not just birthdays or tenure-based anniversaries. But there s good news. Companies with robust, peer-driven, cross-departmental recognition practices integrated within their engagement programs have employees who maintain closer, stronger and more productive relationships with their employers. Building and maintaining successful methods to accomplish that can be challenging. In this whitepaper, you will learn: The importance of recognition and rewards The evolution of engaging employees with recognition How to establish an effective feedback and reward program 3 Revamp Your Recognition and Rewards Program

4 Importance of Recognition and Rewards Best-in-class companies know that when statistics show that employee engagement is low, the results produce negative consequences across the lifecycle of attracting, engaging and retaining productive workers. Mergers and acquisitions, talent shortages and globalization add to the stress of holding onto top talent. A recent survey by Society of Human Resource Management (SHRM) found that employee retention (40 percent) and employee engagement (39 percent) are cited as the most important organizational challenges faced by HR professionals today. And according to the U.S. Department of Labor, the number one reason people leave their jobs is because they do not feel appreciated. Organizations are now embarking on a cultural journey to build processes and practices to ensure that their employees: Know their purpose Feel like their voice is heard Trust their leaders Have a sense of belonging 4 Revamp Your Recognition and Rewards Program

5 What can organizations do to ensure their employees feel valued and receive adequate recognition? Leveraging an employee recognition program has a greater impact than just on the individual. It actually has proven positive results for the entire organization including: Higher retention rates Turnover can be extremely costly to a company, ranging from 90% to 200% of an annual salary. JetBlue revealed that for every 10% increase in people reporting being recognized, it saw a 3% increase in retention and a 2% increase in engagement. Improved morale 86% of values-based recognition programs show an increase in worker happiness. For example, VRI s Vice President of Human Resources and Training, Kim Witt, noticed a change when the company introduced a recognition platform. She says, It s been fun to see the improvement in peoples attitudes, in their engagement and in their sense of fun at work. Increased productivity The data is astounding Gallup estimates that there are more than 22 million U.S. workers who are extremely negative or actively disengaged. Not only are companies incorporating recognition into their engagement programs, but they are also touting these programs for recruiting purposes. Job applicants are interested in more than just a good salary and decent benefits. They want to know what and how often their efforts will be intrinsically rewarded. 5 Revamp Your Recognition and Rewards Program

6 Evolution of Recognizing and Rewarding Employees The role of a company s Human Resources department previously was to manage wages and address employee grievances. Today HR plays a critical role in a company s organizational, financial, operational and strategic success. Why has there been such profound change in HR s functions and responsibilities? First it is important to understand the shift in how HR interacts with its workforce. Empowering workers and ensuring a positive workplace experience is now its primary challenge. Offering a rewards and recognition program is just one approach businesses use to motivate and encourage employees to be most productive and effective. Yet, just as HR functions have shifted, so have recognition practices. Traditional employee recognition began with service anniversaries and awards like a company-branded clock or pen. Later this progressed to offering employees a choice in their anniversary award. But the problem didn t necessarily lie in what the award was, but rather why the award was given. Historically recognitions were solely based on tenure regardless of if the person was high-performing. Companies soon realized that performance and behavior-based recognition was more important and yielded better results in the form of increased productivity, workplace satisfaction and increased revenue. Why continue to recognize workers who might show up year after year, but don t perform well? 6 Revamp Your Recognition and Rewards Program

7 Other factors that affect the shift in today s rewards and recognition include: Technology We have entered a new era of connecting with employees using technologybased processes similar to consumer applications like Yelp and Twitter. Performance feedback tools, pulse surveys, social recognition and collaboration systems offer real-time information and reactions for the entire organization to view. Tapping into proven technology offers greater ease of use with integrated data and analytics. We ve heard from employees that [engagement technology] shows what it takes to be successful and how to be recognized. They look at people who are getting recognition, see what they are being recognized for, and from there, they know what it takes to be successful. Cheryl Johnson, SVP of Talent, Echo Global Logistics Generational Shift Today s tenured generations will soon enter retirement, and the younger generation joining the workforce is bringing a fresh mentality to their profession. According to PxC, 41 percent of the younger workforce prefers to be recognized and given feedback at least monthly, if not more frequently. Further, as technology and social media continue to streamline the job search process, the importance of talent retention becomes more top of mind. Through encouraging positive and constructive feedback among all organizational levels, aligning recognition to the company vision and helping great employees feel valued, employees are more likely to stay longer and develop with the company -- regardless of their generation. 7 Revamp Your Recognition and Rewards Program

8 Mobility/Social More than 1.8 billion people now have smartphones and more than three billion people are on the Internet. New Deloitte research believes that people check their mobile phones eight billion times a day. Organizations are learning that their recognition programs need to be accessible from home, on vacation or anywhere for that matter. Fluid Teams Work today is done differently than ever before. In the past, people would be assigned to a specific, defined and unchanging role on a team, but today s workplace demands that expertise and experience drive participation in a project. Employees work across departments with their responsibilities determined on a project-by-project basis. In this new, malleable team composition, employees need the ability to acknowledge and recognize people in another department, office or location. 8 Revamp Your Recognition and Rewards Program

9 Establishing an Effective Feedback and Recognition and Rewards Program Engaging with employees and external constituents - making an emotional and social connection - is critical in retaining a productive workforce and customers, while driving revenue. Determining the most effective way to provide recognition and rewards doesn t happen overnight. Organizations must take the time to align a recognition program with key values, a company s vision or mission, as well as their desired culture. It should also empower external constituents to give feedback - whether it s a customer, vendor or anyone else. That valuable feedback can uncover top performers who you might not otherwise know about. Additional best practices include: Establishing a system of social communication Measuring your recognition communication data Providing specific, timely and ongoing recognition and rewards Offering experience-related rewards with flexibility Keeping rewards undiluted Making recognition communication channels easily accessible. 9 Revamp Your Recognition and Rewards Program

10 Establishing a system of social communication How are you going to relay positive recognition to deserving recipients? While preferred communication methods may vary (think hand-written card vs. Twitter) across generations, it is clear that everyone values and is motivated by peerdriven recognition. Utilizing one social communication platform across the entire organization will create cohesiveness, consistency, greater participation and help you better gauge results. Employees who have been identified as role models are able to teach others because of how many times they ve been recognized. We re able to ingrain [those values] on a day-to-day basis. It s more transparent, more frequent -- and that s powerful. Kim Witt, VP of HR and Training, VRI Measuring your recognition communication data Use short pulse surveys to identify how your workforce feels about your recognition and rewards. How is data impacting overall employee engagement scores, such as a reduction in absenteeism or increases in social praises? Learn what your employees like and how you can improve program processes. To impact overall employee engagement scores, learn what your employees like to better improve your program practices. Also, identify top contributors and leverage their participation to engage others. If you re recognized for something, you re more likely to repeat it. The more often that happens, it becomes business as usual. All of a sudden you ve got a workforce that is performing outstanding in their roles, which impacts the business including the customer experience, customer loyalty, retention and hard-cost business scenarios. Kim Witt 10 Revamp Your Recognition and Rewards Program

11 Providing specific, timely and ongoing recognition and rewards Feedback is better received when it s authentic. This means it should be tied to a specific event or behavior, rather than delivering random sentiments or annual reviews. Try replacing year-end gifts with on-the-spot rewards for remarkable acts. Also be sure to offer an easy way for external contributors to provide real-time feedback. For example, bestin-class engagement platforms provide a link that can be included in all communications with customers. Offering experience-related rewards with flexibility World at Work reports that 51 percent of workers say plaques, length of service awards, tchotchkes, gift cards and other trinkets mean nothing. Instead, letting employees choose their own rewards add value. For example, why give people movie gift cards if they don t enjoy movies? Instead, offer different types of gift cards that are more meaningful and fulfilling. Consider your recipients Baby Boomers or Gen Xers will appreciate something that a Millennial finds unsatisfying. Including experience-related incentives, such as lunch with a manager or coffee with the CEO, adds great personalization. Keeping rewards undiluted A common approach to rewarding employees often includes a catalog vendor that allows employees to choose rewards based on points balance within the vendor s system. While these platforms can be effective, they often mark up products by as much as 50%, decreasing your employee s spending power dramatically. The result is that the recipients of these rewards can feel cheated exactly the opposite of how you want your recognized employees to feel. In addition, many of these vendors incentivize you to spend as much as possible. They make money when you spend money, so it s important to separate monetary recognition from meaningful recognition. This reiterates the recommendation that you focus your recognition approach on cultural alignment. Making recognition communication channels easily accessible Integrate your tool into systems used by employees everyday. Leverage mobile capabilities so people can offer feedback from anywhere and at anytime. 11 Revamp Your Recognition and Rewards Program

12 In Conclusion The workforce has moved away from demanding transactional needs for recognition, such as pay satisfaction and vacation benefits, and instead prefers social interaction, support, development and appreciation. Incorporating programs and technology that provide employees with recognition and rewards will ultimately have positive outcomes across the organization. Additional Resources Datasheet Recognition and Rewards FAQ: 9 Questions How to Build, Manage and Grow and Recognition and Rewards Program Webinar: Part 1 Creating a Modern Day, Meaningful Recognition and Rewards Program Webinar: Part 2 Creating a Modern Day, Meaningful Recognition and Rewards Program To learn more about building a robust recognition and rewards program at your organization, please visit... Contact us today to learn more HighGround.com 12 Revamp Your Recognition and Rewards Program