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Top Retention Strategy: Strategic Employee Recognition

Recognize This! – A culture of recognition is one of the most powerful means of retaining top talent.

In the last few months in my travels to lead workshops with clients and to present at various HR and strategy conferences around the world, I’m hearing a repeated refrain about employee retention. In my (admittedly unscientific) survey of these large, global companies, the importance of culture as a main component of a retention strategy is once again rising to the fore.

Some companies have maxed out their compensation and cannot compete for talent based on pay alone. Others know the only real difference between what they have to offer top talent from the competition is the strength of their workplace culture as an exciting, innovative and appreciative environment. Or, as a recent Chief Executive magazine article put it:

“If the trend of rising company earnings is any indication, the momentum is likely to continue. For employers, that means what it always has: an uptick in competition for the best talent. At the same time, barely out of the recession, companies can’t yet afford to make huge investments in salary increases or large bonuses. By developing employee recognition programs, employers can improve—in some cases dramatically—employee engagement levels, retention and performance. ‘Employee recognition is a potentially very low-cost engagement driver that can have a very, very significant impact on financial performance,’ says Ken Oehler, global practice leader of engagement at human resources consultancy, AON Hewitt.”

That’s the power of strategic, social recognition done right – it’s the fastest, most cost effective way to impact employee engagement and retention. Indeed, some of our clients have realized double digit increases in engagement and retention in months, not years.

How is this possible? It’s not just telling employees “thank you.” It’s going much deeper and telling people very specifically how they and their efforts demonstrated a core value while helping to achieve strategic objectives. It’s giving employees context for the value of their efforts within the bigger picture. We all seek greater meaning in our work. Sometimes, we just need to be reminded what it is.

And when it’s done right, the benefits are stark. AON Hewitt’s Oehler continues:

“Oehler recently studied the relationship between recognition and engagement and found evidence of a strong connection. For starters, when employees were asked to name their top drivers of engagement, recognition came in at No. 2, well ahead of pay at No. 5. Aon also looked at the lag effect of engagement to sales growth and found that companies with above-average engagement scores correlated with 19 percent sales growth vs. companies below the norm on engagement, which reported only 6 percent sales growth.”

How do you differentiate your organization to ensure your top talent never want to leave?

2 Factors Critical to Building Trust (and Engagement) at Work

Recognize This! – Managers must be willing to engage in the difficult aspects of managing others in order to help all employees achieve to their best ability.

As I continue to catch up on a backlog in my readers and research feeds, I’m seeing themes emerge. One is around the importance of trust for employee engagement. Employees who do not trust company leadership will not (indeed, cannot) engage as deeply in their work. They do not give their best efforts because they do not see the value and benefit of doing so.

Just a couple of key factors to building trust in the workplace jumped out at me.

1) Managers must be willing to have the hard conversations with low performing employees.

Many were surprised at recent survey that low performers are often more highly engaged than high performers. I was not, simply because low performers too often don’t know they are low performers. Therefore, they are quite happily skating by at work. It’s the effect on the high performers who see their lower producing colleagues getting away with it that dramatically impacts trust in the organization. Or, as Mark Murphy, CEO of Leadership IQ (the company that did the survey behind these results) said, “It shows high performers that the organization is not a meritocracy.”

Managers must be willing to have the difficult conversations with low performers, not only to help them improve their own skills and productivity, but to also help build trust with top performers that leadership will do the right thing to reinforce best effort from everyone.

2) Managers must appropriately value employee effort as well as achievement.

Let’s be honest. Every innovative approach and thought doesn’t work. We know that to be true at Globoforce where our core values are Respect, Imagination, Determination and Innovation. The four together drive our success. While it’s all well and good to imagine new ideas and approaches, unless we have the determination to see them realized and the respect for each other as we do, we will never truly deliver the innovation that pushes our industry ever forward.

And yet, part of that approach means we sometimes imagine something that doesn’t work as expected. But we can always learn something from that effort and apply those learning to continue to imagine and innovate. That’s the determination needed to keep moving forward. Without validation of and respect for the effort and encouragement to find the lesson (even in the failure) and move forward, employees would lose trust in our values and our goals as an organization.

What other elements are critical to building trust?

What Does “Meaningful Work” Really Mean?

Recognize This! – Only the employee can define what is meaningful work to them. Leaders, however, are critical for helping them catch the vision.

Yesterday, I wrote about the importance of engaging in meaningful work for employees. But what, exactly, does “meaningful work” mean? As I was catching up on my (admittedly large) backlog of news and blogs in my reader, I found this nugget from the Switch & Shift blog (which is rapidly becoming one of my favorite daily reads):

“Managers cannot make work meaningful for employees. Managers, however, can shape the workplace environment to let meaningful work become possible for employees. With a context set to let meaning be experienced, employees can leverage the environment to derive meaning from their work.

“Meaningful work is vague. What exactly is it? Assuredly it begins quite selfishly. But this is out of necessity. For work to be meaningful, it is the employee who must label it so. This requires a belief that meaningful work is a desired outcome from managements’ actions. And employees believe managements’ intentions and see actions aimed to let meaning emerge.”

This reminds me of the possibly apocryphal story of the senior military leader touring NASA Space Center during the early days of the space race. The leader noticed a janitor cleaning an area of mission control and asked, “What are you doing?” The janitor didn’t reply with the obvious, “I’m sweeping the floor.” No, he said, “I’m helping to put a man on the moon.”

In this story, the employee knew and understood the greater purpose of his efforts. Keeping a neat and clean work environment would help to eliminate distractions for the scientists and engineers in mission control, thereby helping to contribute to the greater space mission. This employee knew the meaning of his work.

Personally, I don’t lead a group of strategy consultants. I help companies change their cultures to ones of appreciation and recognition.

What do you do for work? What’s the real meaning of your work?

3 Tips to Become the Manager Employees Never Want to Leave

Recognize This! – People leave bosses, not companies. Good managers make sure their employees succeed before themselves.

We’ve all heard the truism that people quit managers not jobs. If retention of top performers and key talent is a priority for you, then one of the first places you should look for improvement is in the relationship between managers and employees. This recent article, for example, points to a recent survey showing 20% of people say their bosses hurt their career. Half of employees, on the other hand, said the boss had a positive impact.

The article goes on to share common advice we’ve all likely heard before: End micro-managing and help bosses learn the art of delegation. Help bosses feel secure in their role and the importance of leading a team so they are confident and comfortable in giving team members credit where credit is due instead of snatching it for themselves.

While that advice is quite true and valuable, I’m far more interested in why these managerial tactics work. It all boils down to these three points (supported by reams of research conducted by Teresa Amabile and Steven Kramer in The Progress Principle).

Employees need meaningful work.
Busy work kills the spirit. Yes, some work tasks are menial, repetitive and just have to get done. But doesn’t mean they aren’t meaningful. Good managers help employees see the greater value of even the most menial, repetitive tasks. Help your employees see how their efforts help move the greater mission forward.
Employees need to make progress in meaningful work.
But meaningful work isn’t enough. Employees also need to know they are getting somewhere. Good managers cast a vision for the future and help employees see where they are on the path to achieving that vision. Help employees see forward progress toward big goals by recognizing them for smaller achievements along the way.
Employees need recognition of efforts and achievements that make an impact.
All of this boils down to employees’ need for recognition. Don’t misunderstand me. This is not a grab for another trophy or a gold star. Employees simply need to know what they do matters within a bigger picture. Indeed, our Spring 2012 Workforce Mood Tracker survey showed 78% of employees said they would work harder if their efforts were better recognized.

Instead of micromanaging, micro-appreciate. Hone in on what your team members are doing and recognize smaller achievements and progress towards bigger goals. Instead of snatching credit for yourself, be the one to give credit to your team for success and let the entire company see how much you all achieve together.

What other attributes do you see in good managers? What made your best manager so good?

A Lot Done, But Way More to Do!

Recognize This! – We as HR Pros have accomplished a lot, but our work is not nearly finished.

I was in Berlin last week, chairing day one of a HR conference on employee engagement. The quality of presentations were truly exceptional, with a wide variety of insights as HR peers shared their projects on various engagement fronts.

We heard lots of ambitions, including:

Adidas – project to improve engagement scores
BP – embedding a new set of corporate values
Kimberly Clarke – aiming to move further up the Best Places to Work List
Electrolux – becoming a Social Enterprise (online collaboration and all)
Best Places To Work Institute themselves on how engagement will just be an “employment norm” by 2020

What struck me the most, though, was not the ambitions themselves, but some of the “walls” (suitable given we were in Berlin) HR see in the workplace. And it seems one of the biggest walls of all is managers and the nature of relationship they establish. Yes, even in 2013, I heard:

“How do we make managers accept relationships is a key management task?”
“How do we ensure they take the time to have more conversations with employees?”

Speaker after speaker spoke about the role employee recognition played in one project or another. But, here’s my soap box – We’ve done a lot, but we have way more to do!

Everyone gets that employees love the positive feedback of recognition; everyone gets that good recognition is a quality conversation. They get, too, that recognition can be telling the corporate strategy in a positive way, that we all need encouragement along the way, and that we need to celebrate the “how” just as much as the “what.”

But where is the mass mobilization of recognition in their organizations? Employee of the month or spot awards to just the 5-10% top performers isn’t going to cut it!

Here’s the statistics (from Mood Tracker Spring 2012): 78% of employees would work harder IF they felt their efforts would be recognized. But, only 15% got any recognition in the past month.

Recognition is one of the most powerful tools HR has in its toolkit. Social Recognition – done right – has the power to make all these ambitions real, and break down the walls, too. Boost engagement, drive social behaviors, embed new values, encourage many quality conversations, reward the “how”, and just generally help employees feel really glad they came to work today!

What are your big ambitions?

4 Questions HR Must Ask Itself in 2013

Recognize This! – Traditional approaches to HR roles and deliverables will not meet the needs of the 2013 workplace.

Intuit’s Fast Tack blog did a great job summarizing trends and predictions for 2013 based on PwC Saratoga’s 2012/2013 US Human Capital Effectiveness Report and The Herman Group’s predictions. Specifically, what jumped out at me was the storyline around productivity and turnover.

What’s coming in 2013? Trends show undeniably:

Declining productivity
Increasing voluntary turnover (first time in 6 years)
Increasing high-performer turnover (2 years in a row)

What’s being predicted for 2013?

More hiring, but trained/experienced workers are hard to find
More spending on training and workforce development
High turnover

What’s the storyline? ‘

Employees are fed up with covering the work of three positions. They simply can’t keep up any more and are pushing back, either by leaving entirely or “quitting but forgetting to tell you” (declining productivity).

Employers know they need to hire to backfill positions lost during the recession (as well as replace those leaving), but they can’t find people who are qualified to do the work. Sure, it’s easier for the likes of GE to train employees for the new workplace reality, but it’s not as realistic for small and medium-sized businesses.

The real questions leaders should be asking in2013 are:

Utilization: Are we properly utilizing the people we have today? Have we returned people to appropriate job roles/functions with appropriate expectations as we pull out of the recession (and sit on massive cash reserves)?
Training: Are we offering training programs (pre- and post-hire) to create the skilled workforce we need? Have we developed a detailed understanding of what our critical-to-hire roles require and incorporating these needs into training?
Recruiting: Are we recruiting appropriately for the workforce actually available versus the ideal employee that is difficult if not impossible to find? Are we willing to hire for cultural fit, aptitude and potential, and then train for needed skills? How can we shift thinking to align with this goal?
Recognition: Are we encouraging employees to maintain needed productivity even as we work to stabilize workloads? Are we recognizing and rewarding employees for both what they are accomplish as how they are doing it? Critically, are we creating loyalty among our workforce by helping employees see the meaning and value of their work within the bigger picture.

What trends do you see in HR? What are your predictions among your workforce in 2013? What are you planning in your own career?

Employee Engagement Requires Commitment from Both Sides

Recognize This! – The ROI of employee engagement is significant and shouldn’t be left on the table out of pride.

In my post today on Compensation Café, I shared lessons I learned on yesterday’s excellent HR.com-sponsored webinar, “7 Hidden Reasons Employees Disengage and Leave.” Led by Leigh Branham, author of The Seven Hidden Reasons People Leave, and Darcy Jacobsen, content manager and blogger for Globoforce, the webinar dug deeply into what companies and managers do that cause employees to disengage and, ultimately, quit.

Be sure to read my post over on Compensation Café for the high-level lessons, but there’s so much more I could have shared about the webinar, including these nuggets:

“Engaged employees give discretionary effort not just because of who they are, but also because of what the company brings out in them.”

Employee engagement is a two-way street. Yes, we as individuals are responsible for choosing to engage in our work, with the people around us, and with our company’s greater mission, vision and values. But it’s also up company leadership to create an environment in which employees want to engage – to create opportunities for employees to bring out their best.

“Research shows 65% of all lost customers can be traced back to a disengaged employee.”

Engagement matters. ROI directly hits the bottom line. Little can ruin a customer or client relationship faster than a disengaged, disgruntled employee who just doesn’t care enough to go that extra step. In today’s world of many options, customers can disengage from your organization at the drop of a hat. Investing in strategic, social employee recognition is a smart move to create a culture of appreciation centered on your core values in which employees know they and their efforts are acknowledged and valued.

“Disengaged employees can be saved, but it requires introspection and a willingness to change by both parties.”

It’s never “game over” in employee engagement. If management and the employee are willing to have honest discussions about what the employee needs in order to fully engage, then valued employees can be re-engaged. Remember, your best employee today could be your most disengaged tomorrow if just one instance changes (a pet project gets killed, a conference pass is denied, deserved recognition isn’t given). The path can move just as quickly the other way.

Have you ever been a disengaged employee? What could have been done to help you re-engage?

Why Meaningful Work Is as Important as Compensation

Recognize This! – Though research indicates this more for GenY, all of us across generations need to know why what we do every day has greater value and meaning.

Are employee engagement and retention of concern for you and your organization? If so, are you equally concerned about how you’re conveying the importance and meaning of the work for employees (especially Gen Y)?

If not, your engagement and retention scores will lag.

Intuit’s Fast Track blog recently shared why:

“In the book, Happiness at Work: Maximizing Your Psychological Capital for Success, the authors unveiled new research by the iOpener Institute about this important demographic. They found [millenials] are motivated to stay with their employer and are willing to actively recommend their company to friends based more on job fulfillment than pay. The survey of 18,000 Gen Y’s uncovered that a belief in the firm’s economic or social purpose, and pride in the organization and its work, had a strong correlation with staying at a company. The report also confirmed that there was no connection between retention and compensation.”

That’s not to say that pay is unimportant. But it’s a mistake to focus solely on compensation as the primary motivator of employees to engage with your organization (or, more accurately, with demonstrating the core values and delivering your strategic objectives) and keep them on staff.

Writing for Blogging for Jobs, Josh Tolan confirmed meaningful work as a critical factor for employee engagement, pointing to Bain & Co. research:

“What your company stands for is now just as important as what’s in a paycheck. A recent survey by Bain & Co. showed 30 percent of workers would be willing to take a pay cut to work for a more globally-conscience, sustainable company. Developing a company culture with real world values is a great way to motivate employees to do their very best.”

Understanding the importance of meaningful work is one thing. Knowing how to help employees see and know the value and deeper meaning of their work is another. That’s why this tip from the Intuit blog post referenced above particularly resonated with me:

“Show them the impact they are making – Gen Y feels fulfilled when they know they are making a difference. When you introduce them to a project, explain what impact a positive result will have on the company (and even society). This way, they will feel like their performance is making a difference and they will work harder as a result. After they complete a project, sit down with them and explain how the result helped the company and then give them even bigger projects.”

Even better, create a culture of recognition in which any employee, at any level, can recognize any other through detailed, specific messages for excellent work. Now, everyone is responsible for communicating the importance, meaningfulness and value of the work we do every day.

Do you think your work is meaningful?

Wisdom from “Best Companies” Leaders: Southwest Airlines

Recognize This! – Regardless of the size of your organization, pay attention to your people. They are your business.

Continuing this week’s series of lessons learned from top executives are brilliant insights from Herb Kelleher, founder and chairman emeritus of Southwest Airlines (featured in this Fortune cover story).

The Foundation of Leadership – Get Out of Their Way

Trust your employees. You hired them for their skills, knowledge and talents. Unless they need you, get out of their way and let them do what they do best.

“Be there when [employees are] having problems, and stay out of their way when things are going well.”

Pay Attention to Your People – And Never Stop

Companies of any size can put their people first. This dynamic shouldn’t change as the organization grows. It may require more commitment, but it can be done. And, just like working on employee engagement, you’re never done.

“The concept is simple, but the execution takes a lot of work and a lot of attention. If you’re going to pay personal attention to each of your people, for instance, and every grief and every joy that they suffer in their lives, you really have to have a tremendous network for gathering information.

“We want to show them they’re important to us as who they are, as people… It’s not formulaic. The way I describe it is this huge mosaic that you’re always adding little pieces to make it work. And it’s not a job that you do for six months and then you just say, ‘Well, that’s behind us.’ It’s something you do every day.”

Culture Trumps Strategy

It doesn’t matter what your strategy is if you’re people cannot, will not, or don’t know how to accomplish that strategy.

“Some people will say, ‘Well, this is not a strategy,’ because they like the word ‘strategy.’ You know, it sounds important, like the Strategic Air Command. And I’d say, ‘Well, here’s how I differentiate.’ I think it was Tolstoy, if I remember correctly, who said, ‘How does Napoleon march onto a balcony in France and get a whole bunch of French troops to march into Russia to their death?’ And I said, ‘Well, the strategy involved was his imperial ambitions, right? But what made the troops march? The culture.’ And I said, ‘It’s the troops marching that defines the culture.’”

Core Values Drive Business Expediency & Efficiency

Business in the 21^st century is driven by speed and efficiency – the ability to react quickly to rapid change in the marketplace and in the world. Having a clear, concise set of core values helps you make those necessary decisions more quickly.

“I’ve always thought that having a simple set of values for a company was also a very efficient and expedient way to go. And I’ll tell you why. Because if somebody makes a proposal and it infringes on those values, you don’t study it for two years. You just say, ‘No, we don’t do that.’ And you go on quickly. So I think that contributes to efficiency.”

What are the driving factors in your organization? Your people? Your values? Your culture? What moves your business forward?

Image credit: Wikimedia Commons

Wisdom from “Best Companies” Leaders: Mars, Inc.

Recognize This – Culture is the foundation of any company’s success, especially over the long-term.

Since the latest Fortune “Best Companies to Work For” list came out, there have been several interviews with CEOs and presidents of various organizations. I’ve read quite a bit of good advice or interesting insights from these leaders (and their employees) and thought I’d share the most interesting excerpts with you this week. Today, we begin with Mars, Inc., makers of M&Ms, Snickers, and 9 other billon-dollar brands.

In this detailed article, Fortune shares these insights into the unique culture of Mars.

The Importance of Culture

The décor and the “perks” matter far less (or not at all) than the culture people work within every day. Make sure yours is a culture and a mission employees want to engage with and get behind.

“For the first time, the company has made it onto Fortune’s annual U.S. roster of the 100 Best Companies to Work For. At No. 95 on the 2013 list, Mars boasts employees who love not only the products they make but also the office culture and the company’s long-standing principles. That might seem surprising on the face of it… Its work sites are utilitarian rather than comfy. There are no Foosball tables or sushi chefs. ‘A lot of really good companies invest in the wrong architecture,’ says Paul S. Michaels, the nonfamily president of Mars. ‘Does it add value for the consumer [for] Snickers bars to pay for marble floors and Picassos?’”

Culture Drives Retention

Manufacturing is not known for high retention rates. It’s especially not known for non-unionization (at least in the U.S.). Yet, at Mars, the culture is so strong, employees (of all stripes) stay because they can grow and develop in their careers.

“And yet employees thrive. Once they get a job, they stay: Turnover in the U.S. is a low 5% or so (excluding the sales force). Some families can claim three generations of employees. The 78-year-old woman who runs the in-house candy shop at the plant in Slough, England, has loyally worked at Mars since the reign of George VI — more than six decades. The demographics of the Mars workplace in the U.S. — about 70% of it in manufacturing, almost entirely nonunionized — are diverse; women constitute 38% of the managers.”

“Statements” Are Meaningless

A mission statement is just that – a written idea – until you make it real for all employees in what they do and experience every day at work.

“Jim Price, site-quality and food-safety manager at the chocolate plant in Hackettstown, N.J: ‘If you ask some companies for their mission statement, they have to pull it out of a drawer. Here you just have to look around.’”

Deeply Embedded Core Principles

Your core values are equally useless if they are nothing more than a plaque on the wall. They must resonate for employees and guide their daily work. And they mustn’t change with the wind. Consistency over time matters.

“The company believes in the “Five Principles of Mars”: quality, responsibility, mutuality, efficiency, freedom. The principles are emblazoned on the walls of its 400 offices and manufacturing sites in 73 countries, including such faraway lands as China, Madagascar, and Saudi Arabia… The principles are what unify Mars employees across products and geography.

“Every Mars employee gets a glossy 27-page booklet explaining the principles in action, signed with the names of 13 family members. The principles, righteously explains the booklet, ‘set us apart from others, requiring that we think and act differently towards our associates, our brands and our business.’”

“Employees can, and do, recite the Five Principles as if they were handed down from the managerial heavens. They’re cult as much as culture… While the principles weren’t codified until 1983, they date to the early days of Mars.”

Unity Manifests in the Physical as Well as the Emotional

Especially in large, diversified organizations, your core values must guide every employee’s actions, in every division, unit and team, everywhere in the world.

“Each Mars division functions with vast independence — subject to the core principles. When Chicago-based Wrigley was acquired by Mars in 2008, the storied 117-year-old chewing-gum manufacturer had to gut its interior offices to change to Mars’s open-floor plan; such is the value of approachability and communication that is presumed to go along with an egalitarian workspace…

“‘A very important tenet of Mars is we don’t want to be a holding company of different companies,’ says Martin Radvan, the president of Wrigley, who took over the division in 2011 after 24 years in other Mars positions. ‘At the end of the day, I think there’s a strong feeling we’re all Martians.’”

If you were interviewed by Fortune on why your company is “Best Place to Work,” what would you spotlight?

Image credit: Wikimedia Commons, Evon-Amos

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