It’s the fuel that fires strong engagement and performance and keeps people working at high levels over long hours: employee recognition. More companies are acknowledging the power of recognizing their employees, be it peer-to-peer or manager-to-subordinate.
Recent research from the Society for Human Resource Management (SHRM) reveals that 80 percent of companies now have some type of employee recognition program, and that 58 percent tie such programs to their organizational values.
Additional research from Bersin by Deloitte shows that organizations that regularly applaud their employees “far outperform those that don't.” That same study reported that there is now a $46 billion market for employee recognition, which includes pins, gold watches, thank-you awards, plaques and more. Companies spend between 1 to 2 percent of payroll recognizing their employees.
Many software platforms on the market now allow companies to recognize their employees in technology-savvy and efficient ways. These systems allow managers to view reward activity on an companywide basis and help them measure the impact of recognition through embedded analytics, among other benefits. A chart accompanying this story provides an overview of features offered by major vendors in the industry.
What Approach Works Best?
Which form of recognition works best? Is it peer-to-peer recognition? Recognition from supervisors or managers? Recognition for achieving a work goal or for success in a wellness-based challenge? Recognition experts told SHRM Online all of the above work well in different scenarios. Practitioners featured in an article in HR Magazine said that in many cases, a simple thank you can suffice.
Experts said it’s vital that companies provide choice in the recognition awards offered on these software platforms, since a one-size-fits-all approach can undermine a program’s impact. While many employees might embrace gift cards, for example, others may prefer other forms of recognition. Successful approaches meet employees’ needs with a mix of tangible and intangible awards.
Whatever the methods used, it's clear that recognition has an effect on engagement. According to research from the O.C. Tanner Institute, engaged employees behave better on the job and perform at higher levels. That research also shows that employee engagement affects nine performance outcomes, including turnover rates.
Engagement can increase dramatically with acknowledgement of a job well-done, Steve Fairbanks, vice president of product management for O.C. Tanner, told SHRM Online. His company provides solutions around performance recognition, career anniversaries, service awards and employee wellness.
Some organizations may question whether a formalized employee recognition program is just a nice-to-have tool or a strategic necessity that affects business results. Fairbanks believes it’s the latter. “Recognition and appreciation are a necessity at any company, and some companies formalize that more than others,” he said. “Our research finds that company impact is measureable and impactful, and having a system to administer these programs makes it easier to track the results and see the impact [recognition] is having."
Tie to Corporate Values
David Brennan, general manager at recognition vendor Achievers, said the company conducted its own study that showed a significant number of employees don’t understand how their roles are connected to corporate goals and values.
“We put so much time and effort into developing core values, but if you’re not communicating what they are and reinforcing them on a daily basis, you won’t be effective,” Brennan said. “You can't wait for an annual performance review to tell people how they’re performing against values and expect them to go live the values every day.”
The SHRM survey Employee Recognition Programs, released last year in conjunction with Globoforce, underscored the power of tying roles and recognition to corporate values. While survey respondents said employee recognition programs had a positive impact on employee engagement and happiness, the impact was perceived to be greater for those with values-based programs.
Recognition technologies help ensure that corporate values are reinforced on a regular basis, Brennan said. “In our platform to provide recognition, you have to select one of the corporate values that a person exhibited in order to get recognition,” he said. This means that employees know exactly why they are being celebrated.
Brennan said he’s seen an increase in the amount of social recognition occurring on the Achievers platform. Social recognition makes it easy for busy employees to acknowledge colleagues for good work through the mobile and social media channels where they spend much time.
Brennan said, “people can recognize each other on the platform” … and then forward that recognition to Facebook, Twitter or LinkedIn, for example.
The platform also generates a significant amount of analytics, which Achievers can share with its clients to show them what’s happening in their workplaces in real time regarding engagement and recognition practices.
One example of this kind of data is an “engagement pulse” pop-up survey that asks employees one question per week on the platform. People encounter five smiley faces showing various stages of happiness and are asked to choose one based on their current satisfaction. The tool is designed to show leaders how employees feel about their work.
“It gives employers a sense in real time what’s happening with their people, and allows them to look at trends and see which departments are more engaged at what times,” Brennan said. If system administrators or managers notice certain trends, they can use that information to look for underlying issues that may be affecting performance.
Brennan said that large organizations are moving away from using annual performance reviews to gauge engagement and instead are incorporating tools like the engagement pulse and social recognition, which measure engagement incrementally. “Reporting is something we continue to focus on because people are living in a world of instant feedback,” he said.
Recognizing Influence and Teamwork
Steve Hunt, senior vice president of Human Capital Management software vendor SAP SuccessFactors, said that frequent recognition is vital so people feel they’re making a difference in their companies. “Our technology covers multiple ways to appreciate people,” Hunt said. “One of the more important ways to recognize someone is as an influencer. People should feel like they're having some influence in their company, and they should also feel part of a team. You appreciate the fact that people are giving their time and their life to you.”
Dave Zielinski is a freelance business journalist in Minneapolis.