HR professionals in organizations where an employee recognition program is linked to organizational core values perceive that the program produces a greater return on investment (ROI) and can help reduce employee turnover, according to a survey released by the Society for Human Resource Management (SHRM) and Globoforce.
The survey, conducted in collaboration with and commissioned by Globoforce, a Southborough, Mass.-based provider of social recognition solutions, found that worker retention was the top workforce management challenge that employers face.
Almost half (46 percent) of the nearly 800 employers surveyed cited retention as their top concern. Other challenges ranking high on the list were employee engagement (36 percent), recruitment (34 percent) and succession planning (33 percent).
But a majority of HR professionals agreed that effective employee recognition programs can have a positive impact on these types of challenges, and more and more firms are linking those programs to company values.
More than 80 percent of the organizations surveyed had employee recognition programs, and 60 percent said their programs were linked to core values, up from 50 percent in 2012. Linking recognition efforts to core values can help employees understand the organization's goals and provide motivation to work toward those goals. Another 21 percent said they had a recognition program that was not tied to organizational values.
"This increase is a positive development because HR professionals were more likely to perceive positive impacts of employee recognition when the program was tied to organizational values, compared with those that were not tied to values," said Tanya Mulvey, a SHRM researcher on talent management and workforce skills and the lead researcher on the survey.
Linking Recognition to Values
How is this linkage most often accomplished?
Some organizations require a person nominating an employee for recognition to cite examples of how the person fulfilled the organization's values. Other companies might highlight a specific value each month and reward employees whose work especially reflects that value. Some also tie their organization's values into a formal performance review process.
The survey found that 88 percent of organizations that tied employee recognition to core values said their programs helped instill and reinforce those values, compared to 57 percent among organizations that did not have that linkage. And 80 percent of organizations that linked recognition and values said the programs helped maintain a strong employer brand, compared to just 49 percent without those ties. Two-thirds (67 percent) of organizations with the linkage said their programs helped meet financial goals, while 41 percent of employers whose programs were not tied to values cited this benefit.
The largest employers (those with 10,000 or more workers) and public for-profit employers were more likely than midsize employers (500 to 2,499 employees) and government organizations to have values-based recognition programs.
Organizations with values-based employee recognition also perceived their programs to be more effective when their companies spent more money on them.
HR professionals whose organizations invested at least 1 percent of payroll in a values-based recognition program were more likely to say that the programs helped the employer attract new job candidates, meet learning and development goals, meet cost-control goals and retain employees.
Recognition programs were just one way HR professionals said their organizations try to influence workplace culture and support employees. The most common were programs that support health and wellness, enhance relationships and teamwork, show employee appreciation, provide growth and learning opportunities, and improve communications and transparency.
These efforts are most often led by HR departments. But senior leaders, executive teams, unit managers and individual employees were also said to play a role.
The survey also examined what organizations do to manage employee performance. Most employers (71 percent) conduct performance reviews on an annual basis, while 17 percent do so on a semiannual basis and 5 percent do so quarterly or more often. But HR professionals are evenly divided on whether such reviews provide an accurate appraisal of employees' work, with 41 percent saying they do and 40 percent saying they do not. Another 19 percent were not sure.
A common performance-improvement technique that can be difficult to implement effectively is coaching. Over one-half of organizations reported having a system that prompts managers to coach employees, and nearly three-quarters of HR professionals agreed that coaching was either very or somewhat important. Yet more than 9 in 10 HR professionals said managers needed more training on how to coach employees effectively.
These findings suggest that organizations may need to invest more in training their line managers, especially since skills shortages and the loss of many experienced employees to retirement could lead to a need for more on-the-job learning, training and coaching.
The survey of 798 HR professionals randomly selected from SHRM's membership with a title of manager or above and employed at organizations with a staff size of 500 or more was conducted earlier this year. The results have a margin of error of plus or minus 4 percent.
Daniel Weintraub is a freelance writer based in Sacramento, Calif.