Archive for April, 2012

CFOs Care More about the Praise than the Prize

Recognize This! – CFOs say communication and recognition are most lacking in employee management.

What do Chief Financial Officers – those charged with managing the money – say is most lacking in employee management? For more than 1,400 CFOs from US companies who were asked just that in a recent survey by Accountemps, the answer is simple – communicate more and say “thanks.”

Most common employee management mistakes according to CFOs:

  1. Lack of communications (41%)
  2. Lack of praise and recognition (28%)

Ryan Sutton, senior vice president for the New England district for professional staffing and consulting services company Robert Half, had this to say about the Accountemps survey results:

“It’s pretty much the same across the board at all companies. Something you hear is that management is so focused on the tasks at hand and finishing their projects and meeting their deadlines that sometimes they just don’t find the time for acknowledging the support of their subordinates.”

That’s where a formal strategic recognition program can play a powerful role in creating a culture of recognition and appreciation in which management is strongly encouraged (if not required) to acknowledge and praise the good efforts and behaviors of their team members – especially when those efforts reflect the core values of the organization.

In fact, putting such a recognition program in place guarantees stronger communications and recognition results, as recently reported in a recent Globoforce/SHRM survey:

Are communication and praise from your management team lacking in your organization? Is there a strategic program in place to encourage better management performance in these areas?

2 Lessons We Should Have Learned in Management 101

Recognize This! –Saying “thank you” and remembering our attitude is a choice should be lessons we all learn and never forget.

An interesting book that was quite popular in America in the late 1980s was All I Really Needed to Know I Learned in Kindergarten. The book was a collection of musings, including the title piece, which gave referenced key life lessons such as: “play fair,” “don’t hit people,” and “clean up your own mess.”

I often think we forget these major life lessons we learned when we were young when we enter the world of business. And that is unfortunate, indeed. What would be the Management 101 equivalent?

Perhaps these two lessons we should have learned in Management 101:

1) Say “thank you.” Every day.

Recently in Fortune magazine, Victor Lipman made this salient observation:

“Just because something should be obvious doesn’t mean it always is.  Two observations after decades of management: (1) Recognition (or lack thereof) is always a key element of employee engagement; and (2) In a business environment where people are extraordinarily busy and routinely asked to do more with less, all too often successful tasks and projects are completed without  recognition for those involved.”

Pausing in our daily rush to notice and appreciate the positive efforts and results of those around us clearly communicates to our colleagues, “What you do is important. I notice your work. Others do, too. Please keep it up.” All from a simple, “thank you.”

2) Choose to make work better.

One of the many benefits of blogging is the introduction to wise and interesting people I may not have otherwise known. Doug Shaw is one such person (be sure to read this recent interview/bio of him in HRZone.co.uk).

In that bio, Doug describes his job (he’s a consultant now) as “I make work better.” The bio goes on to explain:

“The clue to how he performs this feat is in the name of his consultancy – ‘What Goes Around’. Treat staff well and they will treat their employer and its customers well too. Reciprocity – or what goes around comes around – is the secret of staff engagement and a happy workplace, Shaw believes.”

Our attitude and approach to our work every day is a choice. I can choose to be angry, vindictive and competitive, or I can choose to be complimentary, appreciative and helpful. Guess which option makes for a happier, less stressful work day?

What lessons do you think we should add to Management 101?

How Recognition Affects Employee Productivity

Recognize This! – Excessively high productivity cannot be sustained without intervention.

One of the major outcomes of the Great Recession is a dramatic increase in employee productivity. This is not surprising as the employees who survived round after round of layoffs naturally picked up the work of their former colleagues.

Now the question becomes how sustainable is that increased productivity over time? Sure, employees who feared they might be next on the layoff list willing worked at a breakneck pace on far more projects than was typical. But that pace cannot be sustained over the long term.

Advances in technology will likely help, as will increased hiring. But smart managers realize simply recognizing employees for their contributions – helping them understand how meaningful their efforts are and how valuable they are to the organization – is fundamental to maintaining and yes, even increasing, productivity.

The Economic Times recent reported on a poll on employee productivity from TJinsite, the research arm of TimeJobs.com, revealing:

More than 35% of the employees consider lack of recognition of work as the biggest hindrance to their productivity. According to them, rewards and recognition for achievements at workplace act as morale booster, which in turn increase their productivity.”

A client of ours tells us their annual employee survey reveals 90%+ employees report receiving recognition boosts their productivity. Achieving these kinds of results in increased productivity and performance are possible by creating a true culture of recognition in which it becomes habit for all employees, at every level, to pause, notice and appreciate the efforts and achievements of those around them.

But you can’t do this with an “employee of the month” or “annual bonus” program. The article goes on to note:

“Sakaar Anand, Vice President-HR, CA Technologies, underlined that the recognition culture is not built by rewarding a few top performers once a quarter. But, it is built when companies go beyond the routine principle of do ‘X’ amount of work and get rewarded.”

Is sustaining higher levels of employee productivity a concern in your organization? What proactive steps are you taking to help employees engage and stay motivated to deliver the performance levels you need?

Stop Demotivating Employees with Bad Recognition & Reward Programs!

Recognize This! – Employee of the Month programs create competition and resentfulness, not appreciative work environments.

Compensation pros – when you think of base pay in today’s organization, do you think in terms of guaranteed annual increases or in some form of pay for performance?

Most realize the former is the method a century old, while pay for performance in some guise is the far more modern approach. Yet, these same compensation and benefits pros often continue to cling to century-old approaches to employee recognition and reward.

Employee of the Month and similar limited winner, “popularity contest” methods for employee recognition should be long buried. The Monster Thinking Blog outlined reasons why in a recent post:

“Years of research unequivocally supports the conclusion that traditional employee motivation programs actually decrease the overall morale and productivity of a workforce. Unfortunately, many well-intentioned human resource professionals continue to spend their resources attempting to create motivational programs that, while they make sense intuitively, do far more harm than good.

“When I refer to traditional reward-and-recognition programs, I mean … ‘dangling carrot programs.’ … Among all programs, “Employee of the Month” stands out as the most counterproductive.”

I’ve commented before that employee of the month programs often devolve in one of two ways – either turning into a competition instead of praise and acknowledgment or becoming a “who’s turn is it this month?” exercise.

Let me be crystal clear – these programs largely demotivate. They do not engage, encourage, motivate or appropriately recognize employees. As the Monster Thinking blog post points out:

“By the way, it becomes progressively more difficult over time to get employees who lose motivated again. Do you really want to have to worry about dangling carrots every day and every time you want your employees’ best effort?”

Any kind of recognition program that intentionally creates “losers” is doomed to failure. What should you do instead? Recognize and show your appreciation for employees – all employees – who demonstrate your core values in contribution to achieving your strategic objectives. This eliminates both the competition and “it’s your turn” of failed programs like Employee of the Month that have seen their time pass long ago.

Have you ever been named “Employee of the Month?” Was it an honor, a popularity contest, or “your turn?”

Research Shows Recognition Increases Retention & Performance

Recognize This! –Without a truly strategic recognition program, you’re likely not doing all you can to retain employees, help them achieve and sustain maximum productivity, and engage them in your culture.

This seems to be research reporting week for me. Following on the heels of SHRM/Globoforce research on the bottom-line ROI of employee recognition, is this research from Office Team: “Recognize Results: Drive Success through Employee Recognition.”

Surveying office administrative personnel, the survey revealed:

  • 66% would leave their current position if not shown appreciation by their manager
  • 67% say receiving recognition greatly or somewhat improves their performance

That last point mirrors a client of ours whose internal employee surveys show 93% of employees saying receiving formal recognition helps motivate them to sustain high performance.

I’m not surprised by (but pleased to see) survey respondents strongly saying the praise itself is the most meaningful element – being noticed for their work with specific, meaningful and personal messages of thanks and appreciation. As the report noted:

“Many of the rewards administrative professionals rated highest did not involve money. Cash, for example, was far down the list. Most forms of recognition ranked highly by administrative professionals are cost-effective. Top responses included an in-person thank-you or communicating an administrator’s achievements to upper management. One professional’s comment may best sum up the power of praise: ‘Simple recognition on a frequent basis keeps me going far more than anything else.'”

But whatever you do, if you’re going to make the effort to recognize employees, be sure you do it right.  A member of my consulting team keeps a “tombstone” award on her desk from a prior company. Though she received the “President’s Award,” her name is spelled wrong in the engraving. Any personal meaning or value in the award was instantly lost.

 

Are you truly investing all you can in retaining employees, helping them achieve peak productivity and sustain it over time, and engaging them in the culture of your organization? Without a strategic employee recognition program in place, you’re likely not.

Crowdsourcing Performance Management: A Discussion on How to Do It Right

Recognize This! — You can’t have a meaningful discussion about performance, goals, and successes in an environment of fear, dread and anxiety.

How do you feel about performance reviews? Personally, I think the annual performance review (as most commonly implemented) is broken. It’s too infrequent, too fraught with anxiety and fear (for the manager as well as the employee), and too ineffective at doing what it is supposed to do – deliver solid, actionable praise and feedback on employee performance for a year’s worth of work (not just the work completed within the last week or so).

What’s the solution? I recently shared two case studies from companies that kicked the annual review to the kerb quite successfully. But the answer really isn’t as simple as that.

One benefit of the annual review is it forces managers to have conversations with employees about their work. But everyone hates and dreads them. And if you go into a meeting full of fear, dread and hate, are you really in any position to hear what is being said in a constructive way?

Of course not. Several peers of mine from various organizations providing HR services chimed in on this topic in an article appearing today from SHRM: “Inviting the Masses to Rate Employee Performance.” (Membership required for access)

In the article I speak in favor of crowdsourcing feedback and performance, commenting: “It’s hard to see the downside to crowdsourcing because it’s tremendously important to give employees a voice.

Another commenter voiced concern about inappropriate comments and passive-aggressive behavior, but I don’ think this should preclude people from considering crowdsourcing feedback. As I say in the article: “It’s the same as inappropriate comments in an email or team meeting. There are HR processes for people who don’t act with integrity.”

This idea is very different from 360 degree feedback, a difference aptly explained by Scott Erker, senior vice president of DDI:

“360 is a single point in time and is typically structured around a competency model. People answer questions only in that structure. It’s a process that sits in a box. Crowdsourcing, on the other hand, is always on, every day, and it lacks structure. It’s going to be much more organic.”

How do you get to crowdsourcing feedback and performance? Social performance management is an important factor, allowing anyone – peers, colleagues and managers alike – to share their detailed feedback and praise on the achievements and behaviors of their fellow employees. Folding this informal crowd-sourced feedback into more formal processes is the trick that brings value and insight into the true performance of employees.

Do you see a place for crowdsourcing feedback or do you prefer the more formal annual review process?

ROI of Employee Recognition through Productivity, Profit Margin, Equity and More

Recognize This! -Strategic Employee Recognition drives bottom-line business results.

Do you reward employees according to job performance? Are you sure?

My company, Globoforce, published last week the results of its bi-annual survey with SHRM examining the current state of HR leaders’ employee engagement and recognition practices and their impact on performance management.

One finding: 64% of companies that have an employee recognition program say their employees are rewarded according to job performance vs. just 36% of organizations without an employee recognition program.

To me, that shows the dramatic value of a strategic employee recognition program for adding far more data points, from far more sources, for a much more complete picture of employee performance. All of that leads to a much better ability to accurately reward employees for job performance.

The five most critical report findings were:

  1. Employee engagement tops the list of HR challenges. Employee engagement is the foremost human resources issue for HR leaders, yet only a minority tracks it. Those that do measure engagement see higher levels of workforce satisfaction.
  2. Performance management remains stuck in neutral. Annual performance reviews continue to under-serve the needs of many HR leaders, opening the door for more feedback-rich technologies.
  3. Recognition programs fill the feedback and appreciation gap. Employee recognition offers HR leaders a new way to evaluate performance year-round. The result is higher levels of employee engagement and appreciation.
  4. Recognition programs have an observed positive impact on business results. Employee recognition is building the business case for HR leaders, as a majority of respondents say it improves key HR and business metrics.
  5. Recognition aligned with core values leads to more effective managers. Values-based recognition programs designed to reinforce desired behaviors continue to be a key component of effective, successful recognition programs. The result is higher levels of employee satisfaction.

The ROI results are particularly telling:

Among organizations that measure the ROI of their employee recognition programs, HR leaders observed increases in key metrics. More than half of survey respondents saw increases in productivity, customer/ employee retention, employee engagement, return on profit margin, and return on equity as a result of their employee recognition program.

Percent of HR leaders who say they observed an increase in these metrics as a result of their recognition program:

  • Employee productivity – 63 percent
  • Employee engagement – 61 percent
  • Return on profit margin – 58 percent
  • Customer retention – 52 percent
  • Employee retention – 51 percent
  • Return on equity – 50 percent

Available for download are:

Bonuses, Plans, Crop Circles, Results & Everyday Heroes on Compensation Cafe

It’s time once again to share my posts on Compensation Cafe. Please do click through and share your thoughts and comments on the original posts.

3 Reasons Why Bonuses Are Simply “Too Much” (February 23, 2012)

In which I highlight for me three ways in which the bonuses are simply “too much.” (1) Too much weight given to bonus vs. base pay; (2) Too much of a gap between the total compensation for those at the top vs. those in the trenches; and (3) Too much complexity that only encourages negative repercussions.

Do You Have a “Plan” or a “Strategy” (March 7, 2012)

In which I look at the difference between a Total Rewards plan and a strategy based on a Strategy + Business article defining a strategy as one focused on understanding who the target customer is, what the value proposition is to draw in that customer, and what the essential capabilities are to deliver that value proposition. Without clear and coherent answers to these three questions, you may have an exciting vision, a compelling mission, clear goals, and an ambitious strategic plan with many actions under way, but you won’t have a strategy.

3 Employee Total Rewards Best Practices Learned from Crop Circles (March 21, 2012)

In which I share the three lessons I learned after digging into why crops are planted in circles instead of squares or rectangles (hint: to maximize irrigation). (1) “Sacrifices” made for better results often create unexpected opportunities for more yield in the end; (2)  Some employees thrive under different conditions than others; and (3)  It’s necessary to leave room for resources that “fuel” productivity. Do you think “outside the square” for how to best utilize your recognition and total rewards resources for your employees?

Are You Paying Employees for Results or Knowledge (April 3, 2012)

In which I examine what you pay  employees employees for after you have them on board – their results or their knowledge. A workplace that focuses on results as the primary means of measurement for reward concerns me in that there is potential to lose sight of these three key contributors to success: 1) Unique knowledge contribution; (2) Efforts contributing to progress; and (3) Hidden contributors to ultimate success.

Don’t Forget Your Everyday Heroes: Recognizing the Middle 80% (April 12, 2012)

In which I extend the discussion started by my Compensation Cafe colleague, Stephanie Thomas, about the importance of recognizing the vast majority of your “middle tier” employees – those who grind out the work every day and make it possible for your stars to shine.

Taking Recognition Global, Mobile and Social

Recognize This! – Stereotypes or fear of failure should never impede your goals for strategic employee recognition.

I’m honoured to share with you today a couple of recent article on recognition and reward programs in which I’m cited.

Incentive Magazine, “An Online World for Retailers and Catalog Merchants”

This article describes the transformation from print catalogs in employee rewards and recognition to a more social, online sphere. I discuss the power of taking recognition and rewards mobile, specifically.

“Social interaction and mobile recognition are must-haves. They bring an instantaneousness to programs in all respects,” says Derek Irvine, vice president of client strategy and consulting for recognition company Globoforce.
As for the mobile platform, “it’s fully functional for the entire recognition program and not just a clever app,” he says. A manager can be anywhere and use her smartphone or tablet to interact with participants, add comments, and congratulate employees. Recipients immediately receive their egift cards or points via email and can instantly redeem them online or in stores. Also, if they’re shopping at a retailer, they can use their egifts or access the recognition program through their mobile devices and see if they have enough points to immediately redeem for an ecard and use it to buy the merchandise they want.
“Virtual makes it easy, and it’s led to increased participation in programs,” says Irvine. “But the delivery mechanism doesn’t make a gift card more popular. It has to be a great brand to begin with.”

Human Resource Executive, “Asian Appreciation” (appearing in print soon)

I’ve written before about the hazards of ceding to stereotypes about the employee recognition in other cultures. None is often so incorrect as the “people in China (or German or France) don’t want to be recognized.” I addressed the Chinese recognition stereotype directly in this article, especially the need to understand local needs and deliver local rewards.

“Think global, act Chinese.”

Derek Irvine, vice president of client strategy and consulting at Globoforce, a global recognition provider based in Dublin, Ireland, believes this is the key strategy for setting up successful reward and recognition programs in China.

Like employers elsewhere in the world, U.S.-based companies operating in China try to be globally competitive, earn high profits and minimize employee turnover. Given the low levels of employee engagement in China, there’s much to be gained by implementing recognition and rewards programs. But the process demands local execution — everything from local vendors and local coordinators to local insight. …

Despite political or cultural differences between the East and West, Chinese workers are more like Americans than not, experts say. They want fair compensation and benefits, a safe working environment and opportunities for advancement. However, there are still some noticeable differences that have captured the attention of U.S.-based companies.

Irvine says many of his China-based client’s employees now crave sweet rewards — high-quality confections or baked goods from upscale bakeries in China. He says this reward is more likely to motivate nonskilled workers — those who enjoy rewards they can share with family or friends — than perhaps training and development.

Due to China’s exploding middle class, other popular rewards include gift cards from local electronic or quality department stores. “The burgeoning middle class is very ready to show success,” says Irvine. “[Designer] labels are very important in their display of success.”

All of these aspects – mobile recognition, social recognition, and local recognition globally – are inherent in understanding and respecting the unique and important preferences of your employees. Have you not pursued one of these approaches to recognition because of perceived stereotypes or fear of failure?

Gartner on Turning Employee Performance Management Upside Down

Recognize This! — Bottom-up recognition and feedback leads to far more data points for more accurate decision making.

Many long-term readers of my blog know I started out blogging on the GloboBlog, the blog for my company, Globoforce. About a year ago, I switched over to blogging here on Recognize This!, expanding the focus of my blog to how strategic recognition impacts the entire talent management spectrum from recruiting through succession planning and even exiting.

The GloboBlog continued on (and I encourage Recognize This! readers to subscribe there as well) with posts from Globoforce executives and directors. The GloboBlog also focuses on the broader impact of employee recognition, especially in the areas of performance management, retention and employee engagement.

Most recently, Grant Beckett, Globoforce’s vice president of product, highlighted very interesting research from Jim Holincheck of Gartner, noting:

“Jim Holincheck from Gartner released a report last week that perfectly expounded what recognition can do for employee performance management and talent management. In his 2012 Strategic Road Map for Employee Performance Management (membership required), Jim says that ‘leading organizations will start to move toward more bottom-up feedback, recognition and rewards.’  Managers can see the level of frequency of recognition and performance feedback for individual employees.  The result of this, as Jim says is, ‘senior executives can use this data to see if manager performance decisions align with what coworkers indicate through their actions.’  In addition, recognition can be used ‘to identify high-potential, high-performance individuals.'”

I was particularly interested in how Jim suggested the “bottom-up feedback, recognition and rewards” would impact compensation and rewards budgets (from the same research):

“This will likely manifest itself in the shifting of budgets from traditional, top-down-determined, annual merit increases and incentive compensation to bottom-up, event-specific and more frequent rewards.”

That shift to a bottom-up approach is critical to achieving the increased levels of feedback and recognition from all sources. Additional feedback and recognition equals more data points. The more data points gathered, the more informed decision-making can be.

Be sure to check out the rest of Grant’s post on the importance of the wisdom of crowds as well as the full Gartner report.