Firm Continues Growth of HR BPO Business, Signing Eighth Deal Since Close of Hewitt and Exult Merger
LINCOLNSHIRE, Ill. — Hewitt Associates (NYSE: HEW), a global human resources services firm, announced today that it will provide comprehensive HR business process outsourcing (BPO) services to PepsiCo (NYSE: PEP), a world leader in convenient foods and beverages. Financial terms of the deal were not disclosed.
Under a ten-year agreement, Hewitt will provide HR BPO services in the U
Sophisticated recognition programs are no longer just for the big boys.
New Web-based programs now make it simple for any organization to offer the best in rewards, regardless of size.
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Recognizing and rewarding employees is an important way to reduce employee disengagement and turnover. Indeed, employee recognition and reward programs have become an increasingly strategic element for many major corporations.
Whether you have 50 employees or 50,000, the rationale behind a meaningful recognition program is clear. Study after study has shown that satisfied employees tend to be more productive and less likely to leave their jobs for other opportunities. Which begs the question, What keeps employees satisfied with their jobs? Equitable wages and a complete benefits package are certainly important factors. But employees also have consistently ranked receiving recognition for their work as one of the top reasons for staying in their present job.
From a company perspective, establishing a good recognition program can go a long way to improving employee morale and performance, which most often leads to improved productivity and improved profits.
Small- to medium-sized enterprises (SMEs) and large organizations alike understand that establishing and maintaining a good recognition and reward strategy takes a lot of planning and implementation. The proper infrastructure to support ongoing recognition programs can be complex and expensive.
But while most large organizations have already established formal recognition programs, SMEs have tended to shy away from the practice. It is simply too costly in terms of infrastructure and manpower to set up and maintain a program with a dedicated staff. Moreover, SMEs simply arent large enough to be cost-effectively served by the leading outsourced recognition providers. With the introduction of Web-based solutions, everything has changed.
The latest trend in the recognition industry is the move towards easy-to-use, self-managed Web-based recognition and reward programs that are enabling large and small organizations alike to optimize their recognition investment simply by connecting their existing infrastructure (such as employee databases) to an online recognition solution provider. By outsourcing to an online recognition solution provider, it is now surprisingly inexpensive to develop and run a highly effective recognition and reward strategy. Thanks to the advances in Web programming and technology, its also conceivable for an SME to have their recognition program, including a customized Web page, up and running within an hour.
When a state-of-the-art Web interface enables you to develop a customized recognition program and Web page (complete with your corporate branding) within a matter of minutes, it is easy to see how online solutions are taking all the grunt work out of the process while providing a host of other benefits.
A clear benefit of the outsourced recognition solution is that one individual within an organization, rather than a dedicated team, can administer the process. But the benefits dont stop there. An integrated Web-based solution can be linked to existing employee data in your organizations database, or in the databases of your payroll provider. By linking the employees hiring date to the recognition program, organizations can ensure that employees are automatically acknowledged for their service. And if your organization also allows managers to reward deserving employees for achievements on a regular basis, a points-based system can be established that will allow employees to accumulate points to purchase the gift items they really want, rather than something their managers have chosen for them.
Another key benefit of an outsourced solution is access to a much wider range of employee rewards. Items ranging from e-cards to golf clubs can be grouped into categories, which enables an organization to control material expenditures while still providing managers and employees latitude in selecting an appropriate reward. And since an external provider runs the program, you avoid the hassle of maintaining an inventory of reward items. Often, items can be shipped within hours of placing the order, making the ordering process painless for both the employee and the administrator.
With any outsourced project, the litmus test in measuring success is how much value it brings to the organization. Outsourced recognition clearly delivers value in terms of maximizing a recognition strategy at minimum cost. In the end, however, the greatest benefit to your organization will be a happy, productive, and loyal workforce that is willing to go the extra mile to support your business.
Case Study: NBC Universal finds innovative ways to say Good Job!
An annual survey of NBC Universal (NBCU) employees showed that while employees felt that they made a difference, their contributions were not always recognized and spotlighted by their higher-ups. In response to the employee feedback, NBCU decided to create an improved employee recognition program. To help them in this project, they partnered with recognition provider IncentOne. < ?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
CREATION OF A BRAND
Prior to launching a new employee recognition program, the existing reward program was evaluated. NBCUs spot special award program was cash-based and awards were presented without fanfare. Although the program was well defined with good back-end controllership features, the front-end nominating process consisted of a paper nomination form that had to be routed throughout the company for appropriate approvals. NBCU decided to come up with a new program and a new brandOvation. The brand was chosen because this word describes the new culture of recognition NBCU desired to create and nurture. The goals of Ovation were to make the employee recognition process:
More memorableby encouraging merchandise and gift certificates, rather than just cash
More prevalentby encouraging smaller-sized awards, given more frequently and to more employees
More visibleby the creation of a branded program and by encouraging public presentation of awards
More personal and spontaneousby using Web-based technology to enable a wide variety of choices (merchandise, gift certificates, cash) to suit different employees and different occasions calling for recognition.
The Ovation program was designed to enhance NBCUs position as an employer of choice and improve overall employee satisfaction by developing a culture of recognition. A cross-functional team of NBCU managers, using GEs Six Sigma process, established the program guidelines based on voice of the customer input from operations managers. Recognition budgets were established at division levels and managed by HR managers in conjunction with operations managers. Ovation had managements full approval. The HR managers, charged with being the champions of the Ovation program, participated in various in-person and online training sessions in the weeks leading up to the launch. Several days prior to launch, the program was communicated to employees via e-mail announcements and feature articles on NBCUs intranet. Key to the success of Ovation is the broad choice of rewards that would appeal to a diverse audience. The program offers the award recipients choices with the Gift Certificate Award, which was specifically branded for NBCU. This award enables employees to select rewards from an extensive portfolio that includes gift certificates, merchandise, travel packages, personal services, airline miles, and phone cards. NBCU uses a comprehensive award management system that automates and integrates all program rewards, administration, and procedures. Eligible managers issue awards through an automated nomination and approval process that facilitates as many as four levels of authorization (for the very largest award levels). Once a nomination is approved, a personalized congratulatory letter; the Gift Certificate Award; as well as a framed Ovation Certificate of Appreciation, suitable for display to assure that the employees accomplishments are properly and publicly recognized, is sent to the nominating manager for presentation to the employee.
As part of the Six Sigma process that was used to develop the program, a variety of measures were set up to track progress. Key measures include the number of awards given each month, the average size of awards, the percentage of awards delivered as cash, and the average time it takes to go from nomination to final approval in their systems. Overall results include the following:
A culture of recognition strategy was well received and has been embraced at NBCU.
More employees are being recognized, more frequently, at no additional cost to the company. Return on investment has increased.
The entire rewards process is Web-based which results in quick turnaround with no manual residue.
Memorable merchandise awards, rather than nonmemorable cash awards, are encouraged.
Says Eileen Whelley, EVP of Human Resources at NBC Universal, I am thrilled with the enthusiasm with which managers and employees have embraced the Ovation program. Clearly, recognition of the accomplishments and outstanding work of our employees was something we needed to improve. This program has made an impact in this regard and is continuing at a fervent pace.
Employee Incentive and Employee Recognition Outsourcing
Welcome viewers, we mean readers, to the all new HRO Dating Game. This episode will feature two of our most eligible bachelors, representing Employee Incentive and Recognition firms, and one lovely bachelorette looking for just the right Incentive mate for her HR department. To start off the game, lets ask each of the contestants to introduce themselves and tell us what theyre looking for in the perfect outsourcing partner.
Bachelor #1: CHESTER ELTON (VP Performance Recognition, OC Tanner)
Our companys mission is to strengthen other companies through recognition. We focus on the strategic, simple, and measured. Strategically, we help you think about what you want to accomplish with competition. Then we make it simple and train you how to use different programs and how to take measurements. Those measurements are like a snapshot of an organization that shows you where you are in employee engagement at that point in time. We take a snapshot when you start and after you have implemented a program. Then last, but most important, we communicate. We do that through the recognition experiencemaking sure every award you present is tied to your companys values.
Bachelor #2: JOHN MILLS (EVP Business Development, Rideau)
We help companies recognize, reward, and retain employees. If you were to consider recognition as four parts of a puzzle, at Rideau, we have all the parts. First, we manufacture our own products and put together tremendous rewards. Second, we have the internal communication (marketing, graphics, and others) to promote all types of recognition programsbasically, were a one-stop shop. Third, the administrative technology we have developed over the last ten years allows customers to manage programs seamlessly and efficiently using an online tool. And last, we have a dedication to Internet technology. We have 25 in-house programmers who manage 250-300 Web sites for our clients. So if you were to have a relationship with us, you would be involved with a company that can put it all together in a cohesive package.
Thank you contestants for your introductions. Now, lets move on to the question and answer part.
Bachelorette: Whats the best reason for employers to offer Employee Incentive and Employee Recognition Outsourcing?
Bachelor #1, OC Tanner: The best reason to outsource is that you are outsourcing to the experts. Its the old build-versus-buy debate. Why build something from scratch when you can buy it?
Bachelor #2, Rideau: I think it is because it allows the corporation that is providing recognition to focus on their core competencies. Todays HRO providers are outsourcing to a specialist, someone who knows what it is like to manage the process from A to Zallowing the corporation to concentrate on business internally.
Bachelorette: If I were an HRO sourcing consultant working with a Fortune 500 customer to prepare an HRO RFP, what is the one thing that would make me take time out of my busy day to go to lunch with you?
Bachelor #1, OC Tanner: The most compelling reason is that I would bring a practitioner who has used our system with me on that lunch and would tell you about the return on investment on our strategic recognition system, and youd be hearing it not from me but from someone who has actually used the system.
Bachelorette: Bachelors, many Enterpriselevel HRO companies have yet to include Employee Incentive Management and Employee Recognition in-scope in any of their HRO contracts. What are they missing?
Bachelor #1, OC Tanner: I think they are yet to come around to the impact that outsourcing recognition can have. And I think they need to be looking toward the recognition providers to give them direction when they make reference to employee motivation, and caring about the employees, and trust. I think it is simply a lack of focus on their partsthey really dont have a tremendous amount of expertise in this area, which can leave them twisting in the wind somewhat.
Bachelor #2, Rideau: I agree. The challenge is also that there are so many different domains in outsourcing, some get overlooked. Recognition is one of those areas that should be at the top rather than the bottom. But unfortunately, some companies dont see the big picture when it comes to recognition and how valuable it is to employees. A lot of providers also overlook the fact that, at the end of the day, recognition programs can generate dollars for the outsourcing industry.
Bachelorette: My friend, who likes big challenges, has been given two job offers: one at an employee recognition outsourcing firm and one at Martha Stewarts company. Which job should she take and why?
Bachelor #2, Rideau: I would suggest she take the job at the HRO firm, and chances are, based on current events, she would probably get a lot of HR and staff from Marthas business!
Bachelorette: When I asked my grandfather what employee recognition meant, he answered that, to him, it was two guys who picked out the gold watch for your retirement party. Can you tell me the two most important ways that employee recognition has advanced since my grandfathers era?
Bachelor #2, Rideau: The most obvious way it has advanced is in the way that people perceive it. In the past, it was a default gifteveryone got a gold watch and a handshake. But today, I think employees think recognition is more than a gold watchits the experience that comes with it. From our perspective in this industry, employees have been given a lot of lip service and employers have not grasped that it is the concept that is important. Another way it has changed is the advent of technology. It is now a global community. People can shop online and select gifts online, which has made it easier to implement programs and allow companies to spread them across the country.
Bachelorette: Bachelor #1, same question, and to add, how will employee recognition continue to advance over the next 5 to 10 years?
Bachelor #1, OC Tanner: I think John really nailed it when talking about the way recognition has changed. Nowadays, its more of an experience.There is more wrapped around it. Its not just the gold watch.There is a lot of recognition that is implied strategically throughout the year, whether it be an online e-card or picking up lunch for the crew. It is important to include performance recognition systems not when you are out the door but throughout an employees career your first-year anniversary, your fifth-year anniversary, your first promotionthese are all seminal moments in a persons career. Employee recognition is not just about retirement. Its about contribution, team building, the whole experience, and all these things should be celebrated. It has evolved from being a gold watch to being a lifestyle choicetrips, spas, entertainmentand its not just at the end of your career, but throughout your career. I think it will evolve in the future in that there will be very tangible ways to measure the impact that recognition has on employees. Finding and keeping good employees will be increasingly important to employers over the next few yearshow you measure the engagement and your return on that is going to be critical. And as you see more companies like Hewitt come into it, you will see more metrics.
Bachelor #2, Rideau: Id like to add that ompanies will realize that recognition programs cant be treated as an expense but are more of an investment in the company. Currently, they might ask why are we spending money on recognition? But as the industry evolves and we find out how much it costs to train and recruit, rather than lose employees, they will see it as a investment.
Bachelorette: If you were a matchmaker trying to match me with your rival Bachelors firm, tell me the one thing that would really sell me on the other Bachelor?
Bachelor #1, OC Tanner: This sounds odd, but I recently saw one of Rideaus presentations at a conference, and I have to say, they have a wonderful capability in making these remarkable medals. If you were looking for extraordinarily high-quality recognition pieces in the area of performance, there is nowhere better to go.
Bachelor #2, Rideau: I would say from an industry perspective, OC Tanner is a very solid and good competitor. They have defined this industry in the last year. They have been the largest in the business, they define recognition experience and stay with their beliefs, and they have helped grow this industry in North America.
Bachelorette: Bachelor #1, what is your favorite Employee Recognition success story and why?
Bachelor #1, OC Tanner: I think one of the great recognition success stories we have seen is Avis rental car. It was simply this a light went off in management. They asked their employees What are some of the issues you are having with your group? When one man said I have a problem with safety, they said, Do this: pick out your three best employees and recognize them with rewards and see what happens with the safety issue. In three months, what happened was the safety rate improved. And the employees and managers realized this was due to recognizing and rewarding behavior. They realized this isnt just something thats nice to do, its good business. It engages and values employees in a way a paycheck just cant relay. The organization got it, not just from a humanitarian standpoint but from a business standpoint.
Bachelorette: Bachelor #2, if we were out on a date and I introduced you to my friends, how would you describe what your company does?
Bachelor #2, Rideau: We are in the business of helping companies optimize people, performance, and profit.
Bachelorette: What one thing would you say to change the mind of a CEO who thinks that he could never outsource his in-house Employee Recognition Department, because he feels that his inhouse team is the only one who can serve his workforces unique culture?
Bachelor #1, OC Tanner: The important thing for him or her to understand when you outsource the system is that you outsource the maintenance. We work in partnership with the company to make sure the system is strategic and reflects their values while keeping their corporate identity. Its really all about how impactful it is. And sometimes, you cant see the forest for the trees. When youre doing it all in-house, you need an outside perspective. You need to leverage all that knowledge thats available and not stay inside a little box.
Bachelor #2, Rideau: I would remind the CEO that what he or she is letting go of are the parts of the program that are really not the companys core competency. What we are is an extension of their HR department. We are branded to our customerall our 800 numbers, all our Web sites. To an employee, it looks like they are dealing with their HR department, but they are really dealing with us.
Bachelorette: And last question in our HRO Dating Game is, of course, a relationship question. Bachelors, what is most important element in an HRO relationships?
Bachelor #2, Rideau: Shared communication and trust. With any good relationship, you start with communication. We aim to over communicate with our client. When we first put a program together, we put together a diagnostic and make recommendations, and from then on, we communicate.
Bachelor #1, OC Tanner: Its trust, absolutely. If you dont trust the vendor, I dont care how interesting the offerings are. When we make a promise, we follow through. You can trust what we say.
So there you have it HR bachelors and bachelorettes. Who did our bachelorette choose? Stay tuned for a future issue of HRO Today. And for those HR departments that are tired of wading through the HRO dating pool, if youre looking for a matchmaker to help you meet and mate the perfect HRO provider, contact HRO Today magazine at email@example.com to become the next contestant on the HRO Dating Game.
Employee incentive programs are increasingly regarded as strategic business tools.
Once treated as little more than freebies with no measurable impact on a companys bottom line, employee incentives are now increasingly regarded as must-have programs, strategic business tools with the power to improve productivity and profits, and especially effective in dealing with a soft economy. The big difference is that now the roi power of incentives can be measured, and it is superb.
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