Cost-conscious Rewards

Recognition comes at a cost, but effective incentive systems don’t always mean breaking the bank.
 
 
By Steven Green
 
 

The numbers are grim. Fifty-four percent of organizations involuntarily lost high-performing employees during the first half of 2010, reports T&D Magazine. According to the U.S. Department of Labor, the number one reason people leave their job is lack of appreciation. These figures speak to the challenge of talent retention and  employee engagement, illustrating that a troubling percentage of employees who feel undervalued move on to what they hope will be greener pastures.
 
 
But what of the productivity of those that remain? Discretionary effort is directly linked to feeling valued. If you believe that your efforts matter, then you will be less likely to leave and more likely to invest greater effort into your job each day. The authors of
12: The Elements of Great Managing drew on 10 million workplace interviews to prepare their New York Times bestselling book. Their findings show that variations in recognition and praise account for 10 to 20 percent differences in productivity and revenue, as well as customer engagement. The book reports that in one investment firm, the difference between one third of its investors feeling recognized and half feeling that way represented an 11 percent difference in revenue. Their findings reinforce the numerous studies that cite the same fact: Employee recognition matters. Recognition and praise in the workplace are not just nice to have, they are a necessary good business practice.
Companies with above average employee commitment exhibit above-average revenue growth 71 percent of the time, according to The Corporate Executive Board.
 

 
 
It’s Not Just About Money
To make recognition part of your company culture, it makes sense to look at the ubiquity of social media and its success, but it's important to choose a  platform that offers more than just the typical social media features. Instead chose one that delivers proven software that fosters collaboration, conversation, and recognition among employees.
 

 
Within informal social networks like Facebook, social recognition has long been an ingrained and intrinsic part of how the platform is used, and the jump to the enterprise follows in its footsteps. When companies embrace social media within their organization, they quickly realize that the currency that has the greatest value to knowledge workers is the desire for recognition. The kind of recognition that allows an employee to build a personal legacy within the organization. Social recognition brings to light the contributions and milestones of the employee and transmits the story across the corporate intranet. Recognition becomes a cultural asset, infusing the social intranet with stories of success and achievement. This has led to a decline in the investment in incentives and rewards among the large enterprise with budget being reallocated to social media and social recognition. Certainly the dominant theme within the large enterprise is on social media, and not on updating the rewards catalogue.
 
 
Case in Point: Zappos
Companies that recognize this reap many benefits, such as Zappos. Not only has Zappos grown exponentially since its start in 1999, it is also recognized as the number six company on the 2011 Fortune: 100 Best Companies to Work For list. Key to their success is their culture. They understand that workplace recognition goes hand-in-hand with company success. They recognize that the achievement system through non-monetary recognition instead of gifts is the most powerful tool when it comes to rewards.
 
 
“The vast majority of rewards [at Zappos] are non-monetary. People in general like to receive some form of recognition for their accomplishments, particularly when it is genuine and from the heart,” says executive Shannon Roy. “At Zappos, we attempt to formulate myriad ways of providing such recognition that conforms with our core value of "do more with less". Thus, conventional bonuses are not the rule of thumb here. Instead, we are constantly creating new and unique awards that get the recipient's name in front of the company and acknowledge their efforts, accomplishments, and positive behaviors.”
 
 
Peer-to-Peer Recognition Pays
Peer-to-peer recognition is another budget-friendly approach with a bevy of benefits:
Provides public validation. Recognition by your peers makes you feel valued and does so in a significant way. This is because only your peers truly understand the skill, time and effort of the finished project. Although others may appreciate the result your peers recognize the process, and this recognition is especially validating.
Increases talent retention and productivity. If you believe that your efforts matter, then you'll be less likely to leave and more likely to make greater contributions. Non-monetary social recognition builds employee engagement, which is proven to increase retention and discretionary effort.
Reinforces corporate culture. Peer-to-peer recognition programs build institutional memory, serving as a repository of stories that would otherwise go untold. The act of publicly celebrating these stories helps to shape the culture of the company.
Improves talent spotting. When your peers recognize your contributions your successes are seen by the entire company. The sender also benefits by visibly demonstrating managerial skills.
Fosters collaboration. Allowing praise and recognition to be shared out in the open creates a rich gallery of stories that can be searched and browsed by anyone.
Inspires and energizes employees. It doesn't take much to say thank you for a job well done. Yet the impact of those two words can be astounding, changing the way employees feel about themselves and their work.
Streamlines processes. Ongoing peer-to-peer recognition removes the bottleneck often experienced when already busy managers are the required starting point for recognition.
Builds community. The achievement system brings everyone together, to work towards a mutual goal that drives employee engagement to meet strategic goals.
 

 
Non-monetary social recognition programs provide short and long-term benefits.
They deliver a win-win situation. Not only are they far less expensive than traditional monetary rewards programs, they are also proven to be more effective in engaging and motivating knowledge workers than traditional monetary incentives.
 
 
Setting the Stage for a Successful Social Recognition Program
Follow these steps to foster a social recognition program in your organization.
 
 
A collaborative environment with two­way dialogue around the recognition process. This allows any employee to extend a story that has previously been published. As employees contribute comments they:
• Retain and extend corporate knowledge around specific contributions and milestones.
• Promote social capital, meaning praise and acknowledgment are not confined to top-down communications within corporate and departmental boundaries.
• Build deeper connections to the mission and purpose of the organization.
 
 
 
A browseable and searchable space that aggregates all recognition. While systems to capture documents and other resources that benefit organizations have been in
place for years, what has been missing is significant. Milestones, events, and the people tied to these events that make the company a great place for employees and customers have consistently been lost to the corporate knowledge base. Aggregating all recognition transforms recognition into a business resource for finding the people within the company who have the required peer­ validated skills when they are needed most.
 
 
 
Public recognition and visibility. By celebrating in a public forum the types of activities that your company wants to promote, you reinforce your corporate culture. You create a repository of stories that would otherwise go untold or remain hidden. By sharing stories about one's co-workers within the social intranet, the recognition moment becomes a  personal, social, and highly interactive event to be valued by the recipient and appreciated by the community.
 

 
Customized reporting to answer questions unique to your organization. Built in reports help you understand how your social recognition program is being used. They can also reveal who the go-to people are in your organization as well as those with managerial qualities.
 

 
Buyer beware. Like with everything in life, when it comes to social recognition programs take heed. Are you getting a free set of features that feel like social media, or are you buying a proven program that will significantly assist your company in its goal to become the first choice for employees and customers?
 
 
Steven Green is the founder of PollStream Inc, www.pollstream.com. He can be reached at steven@pollstream.com.