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Recognition is a much-used term in the corporate world and at the heart of it lie the programs, practices and policies organizations use to reward certain employee behaviors. To meet the changing needs of employees in today's world, many organizations are moving into the realm of Employee Appreciation. There has been some debate about how recognition plays a role in key metrics like attrition, performance and growth, since its impact is usually seen as intangible.
In this session held at the SHRM India Annual Conference 2017, moderated by Dr. Andrew Mitchell, CEO of Rewardian, three HR experts shared organizational best practices about employee recognition. Through the discussion and their insights, they offer key elements that can be used as guiding principles for a good recognition strategy and roadmap.
1. Have a team-based and comprehensive recognition approach– P.V Ramana Murthy, Sr. VP & Global Head of HR at Taj Hotels Resorts & Palaces spoke about the importance of a team-based approach to recognition as more important than linking recognition to an individual's performance. He also emphasized having a comprehensive system in place to ensure recognition practices are carried out objectively. One of the best examples of this is the Taj Hotels' STARS (Special Thanks and Recognition System) Program. The STARS program captures 360 degree feedback from guests, colleagues and leaders, and adds it to the overall points of a Taj Hotels' employee. The employee can potentially be a part of the Managing Director's Club if he or she accumulates a high number of points under this program. The STARS program and its process, as shared by this Forbes article, are globally acclaimed.
2. Keep the employee first, always – Yashwant Mahadik, EVP & Global CHRO of Sun Pharma, shared the point that employees drive the business. They are the crucial link between the organization and its clients, so recognition programs need to keep the employee first as they are being designed. Mahadik also shared an example from Taj Hotels about how the HR team led by Mr. Murthy decided to revamp the employee cafeteria. What triggered this change was the fact that the hotel employees are involved in providing the finest dining experience to their customers. Their cafeteria needed a lot of improvement and Mr. Murthy worked specifically to ensure that the employee cafeteria was transformed into an excellent restaurant that matched the standards of Taj Hotels.
3. You don't need big budgets and high-end technology to run an effective Recognition program– Mahadik also shared an example from the Sun Pharma's Talent Acquisition team about keeping a team engaged. The TA team has the lowest attrition within the organization, and Mahadik attributes this to the practice of immediate recognition driven by the department's head. The Spot recognition program is completely spontaneous and is run without any formal process or technology. It comes intuitively from the leader and it has to be personalized or specific to the individual being recognized. "Create the capability within the leaders to do this as a culture," says Mahadik.
4. Explore different types of recognition beyond longevity and numbers – When defining the recognition program, organizations need to ask themselves some difficult questions: Who are the brand custodians of the organization? Who truly creates value for the customers – products or employees? If employees are the answer to both questions, organizations should re-align their focus when it comes to recognition. Limiting the metrics to only P&L or numbers that are achieved is not the way forward. Recognizing only tenure or loyalty is also not future-focused. While it is good to recognize employees who have been within the organization for a long time, new elements need to be factored in as well. Harlina Sodhi, SEVP and Head of Culture & Capability at IDFC Bank, shared that organizations should reward employees for "failing fast and learning early". They should appreciate innovation and imploding as key attributes, and recognize employees who demonstrate how they have been upholding organizational values even if it means giving up profits. The focus should be on recognition for employees for doing the right thing. Several employers who are considered among the best to work for, such as Google and Amazon, have low average tenures. Mahadik shared some impactful data points to explain this, such as how Amazon has average employee tenure of one year only, and Google is only slightly higher. He says the paradigms are shifting so fast that using old-school reward mechanisms like compensation can be irrelevant in today's world. The idea is to understand the future of the workforce and the deep-seated need of employees to be appreciated.
5. Leaders should drive recognition, in the right manner – "Catch the people doing the right things," is how a leader within Harlina's organization developed their recognition program. This is because it clearly puts into perspective what a leader and an organization should drive.
As HR professionals, we must think of challenges that arise within our programs. For example, is over-recognizing an issue and does recognition itself lose value if we do it too frequently? As Mr. Murthy shares, the most important part of understanding recognition is to not treat it is a transaction, but as a crucial element that needs to be embedded within the culture of the organization. As individuals, we tend to focus on the negatives. That is what we apply even at our work place. So the need is to shift from speaking about only what goes wrong to appreciating what goes well.
Another challenge is that we spend so much time designing the program that we often neglect the most important part - the design of the culture piece. So despite hiring the best people, if our culture is such that we shower them with negativity, then there is no way that even the best people processes can keep them within the organization.
Finally, there is an overall mindset that the top performers are the ones who are covered by recognition programs and they are usually already self-motivated. So why should they be the center of the recognition program? The focus should be on the mediocre employees who are doing their jobs on a daily basis, even if they are not top performers. But will that lead to mediocrity within the organization? Many HR or Recognition practitioners might face this dilemma. As Mahadik explains, "Recognition is not always for delivering something. It is also for role modeling the right behaviors and values. " Organizations are now understanding the long term impact of recognizing those who, through their behaviors, are building the right culture within, thereby proving that performance alone is not the reason for recognition.
The speakers agreed that it is important to understand that recognition is an all-involving approach, which flows in every direction and not just from the top. We create a culture of appreciation by acknowledging our colleagues, team members, subordinates and even leaders. As Mahadik summed up "Recognition doesn't cost much, all it requires is a will and a heart."
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