Best Practices and ROI of Employee Recognition. March 27th, 2013
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1 Best Practices and ROI of Employee Recognition Deb Broderson VP Marketing March 27th, 2013
2 Discussion Points Getting your Employee Recognition Program Right Page 2
3 About Perks Page 3
4 A Brief History of Employee Recognition Programs* * Page 4
5 Recognition versus Reward Page 5
6 Some statistics Things that may keep you awake at night Page 6
7 SCARY FACT #1 29% of employees report that they are engaged at work. Source: Gallup Management Journal, Employee Engagement Index
8 AON Hewitt Page 8
9 SCARY FACT #2 64% of employees resign because they feel unappreciated. Source: US Department of Labor
10 Page 10
11 SCARY FACT #3 55% of companies with recognition programs have aligned goals to the program. Source: Forbes
12 SCARY FACT #4 & 5 75% of companies have a tenure based rewards program. 87% of recognition programs focus on tenure. Source: World at Work
13 Page 13
14 So, what do we do about it? Program economics Page 14
15 Understand what motivates your employees And how that varies by region AON Hewitt 2010 engagement drivers Page 15
16 Develop a program baseline Page 16
17 Assign financial value You have a baseline, now assign financial value Every activity has a financial payback. It you reduce employee turnover by 10% what does that save your company? When product quality increases, as measured by a reduction in product returns, how much does that save your company? If absenteeism rates drop by 10%, what is the productivity payback? Are you able to hire one less person, 10 less? When your customers are happier with the experience they have when they open a support ticket, how much more will they buy from you? Page 17
18 Develop your budget Consider these costs when implementing a recognition and rewards program Cost per award x # employees Communications Administration Implementation and maintenance Training and staff meetings Page 18
19 Then put it all together Expected Gain - Total cost = Program ROI Incentive Budget Deployment Fees Support & Tools Total Cost Activity 1 increase Activity 2 increase Activity 3 increase Gain Page 19
20 Employee Recognition Best Practices Motivate Performance Page 20
21 Best practice number #1 Recognize people based on specific results and behaviors. Award people for driving specific results Create a culture of doing the right thing Value added to an action or result
22 Design elements to consider Invite participation at all levels Recognition should be continual Spot award programs are informal and accessible Keep it simple Help employees grow Span the employee lifecycle Structure program for individual or team awards Page 22
23 Best practice number #2 Implement peer to peer recognition and eliminate the hierarchy. Peers are in-tune with co-worker actions on a daily basis Horizontal colleague contributions are valued higher in daily operations Top down recognition is often seen as political
24 Design elements to consider Give examples of appropriate recognition Consider recognition for colleagues outside their department Train people to recognize good behaviors Include explanations in your new employee orientation Provide training around recognition areas not well-utilized Keep supervisors informed
25 Best practice number #3 Share recognition stories. Story telling Validates recognition Sets a precedence for others Fosters employee engagement and learning
26 Design elements to consider Announce recognition when it happens Make time in team meetings for people to comment on successes and achievements Use social networks (as appropriate) Connect to RSS feeds or company portals Page 26
27 Best practice number #4 Make recognition fast and easy. Accessible and user-friendly make something enjoyable less of a burden Technology and third party services allow this to be accomplished
28 Design elements to consider Consider the user Short action to award time period An even shorted award to reward time period Remember, cash in a paycheck is salary! Page 28
29 Best practice number #5 Tie recognition to company values and goals. Rewarded performance should service the company in attaining goals Use/create company value statements and align recognition categories for results that compliment these statements
30 Design elements to consider Gather input from key stakeholders Perform competitive research Survey employees Involve a diverse group in the design Establish program goals, objectives and metrics Develop a program baseline Determine behaviors that contribute to business success Define the financial benefit of target behaviors Page 30
31 Best practice number #6 Your Communication Plan. Know your audience Drive people to redeem Keep users highly engaged
32 Design elements to consider Develop a segmented communication strategy Use multiple communications channels Announce program design team members & goals Share the design decision-making process Give updates on the progress of the design Solicit suggestions and feedback Page 32
33 " I can live for two months on a good compliment. Mark Twain Page 33
34 Thank you Page 34
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