Glossary of Terms
Employee Recognition: Anything and everything an organization, manager or peer does to acknowledge, praise and appreciate the hard work, success and achievements of colleagues.
Individual or Tactical Recognition A one-to-one connection for recognition, usually between a manager and employee. An unmanaged individual-recognition program works best in a small business, which is typically driven by the personality and leadership of the owner. A large organization cannot sustain individual recognition across thousands of employees and risks chaos in its recognition efforts if it can’t provide a scalable way for all managers to recognize their people. This type of program also opens the door to financial risk (given that financial rewards often go unmanaged except in expense reports).
Enterprise Recognition The next stage in employee recognition practices, creating a more formal program including simple guidelines for managers and large catalogs of rewards and prizes for employees. Difficult to sustain and scale across modern organizations, especially multinational corporations, and typically added as “benefit program” instead of integrated into the company culture.
Strategic Recognition The practice of integrating recognition with other management practices, taking recognition beyond the human resources silo and leveraging its power to shape behavior at all levels of the organization. Records and analyzes all recognition moments across an enterprise, enabling recognition to become a potent management solution along with financial- or program-management practices. Links all recognition to what matters most for organization success – strategic priorities and core values. Defined by measurable processes, full integration into strategic planning and global resource management, and ability to drive a culture in which behaviors reflect organizational values. Adds the ultimate layer of value: culture management.
Social Recognition: True everyone-to-everyone recognition in which all employees of an organization are encouraged to notice and appreciate the good work of others around them. Creates a positivity-dominated workplace in which recognition flows with the work and not necessarily the traditional organizational hierarchy. Can also refer to a method to leverage the social technologies to amplify recognition and broadcast it within the walls of the company, enabling employees to view recognition received by colleagues and add their voice of appreciation while keeping that information secure within the organization.
Culture Management: The direction of behavioral choices based on core values. A clear communication, training, and reward system, using social and strategic recognition is its primary tools. Makes implicit management explicit through values-based recognition efforts targeted to all employees.
Employee Award (Employee Awards): Notification an employee receives that they have been recognized by a colleague. Can be in the form of an email, a letter, a certificate, etc.
Employee Reward (Employee Rewards): Item employee receives to commemorate recognition moment. Preferably chosen directly by the employee and not presented as a pre-selected item that could be culturally or personally insulting. Best if employee has full choice from thousands to millions of options locally within own culture or anywhere in the world if so desired.
Bonus: Cash-based rewards paid out upon achievement of pre-determined goals. Can be given at various intervals such as monthly, quarterly or annually.
Employee Incentives (Incentive Programs, Sales Incentives, Incentive Contests): Differs from employee recognition programs in that employees are informed of the “prize” they will receive if certain goals are achieved. Most common in sales and service organizations and characterized by “If/Then” rewards.
If/Then Rewards: Hallmark of incentives programs in which participants are pre-defined (sales team, customer service organization), a goal is established, and a deadline to achieve that goal is set. “If” a participant achieves that goal, “then” he or she will receive the incentive reward. Opposite of “Now/That” rewards characteristic of strategic recognition programs.
Now/That Rewards: Rewards associated with spontaneous recognition of employee behaviors and actions. Only given as a surprise reinforcement after an employee has demonstrated a desired behavior or achieved a goal and never promoted beforehand. “Now that” an employee has demonstrated desired values and been recognized for them, he or she can choose a desired reward.
Total Rewards: An organization’s entire rewards package as provided to employees. Typically includes some combination of base pay, healthcare, insurance and similar benefits, bonuses, recognition, rewards, incentives, etc.
Compensation: A component of total rewards that is the base wage earned by the employee. Paid in the local currency and received through appropriate payroll structures.
Benefits: Additional employee investment often including healthcare, wellness programs, and similar but can also include additional benefits and perks such as childcare, free on-site cafeteria, etc. Does not include recognition and rewards, which is its own category as described above.
Effective Recognition Programs: Programs that help achieve a desired business outcome such as increased employee engagement, increased retention, improved performance and increased productivity.
Efficient Recognition Programs: Programs that achieve effectiveness targets while ensuring the greatest percentage of program budget is enjoyed by the employees in the form of rewards and the least percentage of budget is used for program administration.
Talent Management: Entire spectrum of the “people process” in an organization including recruiting, onboarding, training, development, performance management, succession planning, and exiting.
Performance Management: Portion of talent management process focused on helping employees improve performance in line with organization needs. Typically includes both informal and formal feedback and recognition processes, such as performance reviews or appraisals, and differentiation ranking exercises.
Crowdsourced Performance Reviews: Takes the “wisdom of the crowd” in the form of informal, positive feedback through recognition given from multiple perspectives and people throughout the year and adds it to the traditional, formal review process to better inform the single-point-of-view of the manager.
Employee Engagement: A measure of employee willingness to give additional discretionary effort to achieve organizational goals. Leaders can influence employee engagement, but ultimately employees alone can choose to engage in a company culture they believe in.
Recognition Program Return on Investment (ROI): Defined based on each organization’s unique metrics of success. Usually some combination of increased employee engagement (a 15% increase in employee engagement equates to a 2% increase in operating margin per Towers Watson), increased employee retention (the cost of replacing one employee is 75-150% of that person’s salary), and increased productivity. Can also include cost savings from consolidation of multiple disparate recognition and incentive programs (typically a savings of 20-40% for Globoforce clients) and elimination of costly global shipping, handling, customs and duties fees.