Ericsson is creating a culture of success with their values-based recognition program.
By Marta Chmielowicz
What does a company stand for? What principles does it embody? How do its products and services contribute to the world? These are some of the key questions that are typically addressed in a core values statement. Values statements are meant to form the very fabric of an organization, guiding its every belief and decision.
However, there is often a discrepancy between a company’s values and its actions. According to a 2016 study by Gallup, merely 27 percent of U.S. employees believe in their organizations’ values, and only 23 percent strongly agree that they can apply these values to their everyday work.
But there is one company that is truly embracing their values business-wide: Ericsson.
Their approach? Values-based employee recognition. By translating their core values into actionable employee behaviors and integrating them into a comprehensive recognition program, Ericsson works to constantly reinforce their three core tenets: respect, professionalism, and perseverance. This is enabling Ericsson to transform into a more profitable, collaborative organization and create a culture of agility, transparency, and unity that drives further business growth and transformation.
“As we’ve gone through a transformation as a company, we’ve realized that there are behavioral things—wanted behavioral characteristics—we want to focus on, and that’s really [going] to help us transform as a company,” explains Jennifer Hulett, Ericsson’s head of human resources for North America. “We’re in a very disruptive time where our industry is being disrupted, our competitors are being disrupted, the technology is being disrupted, and even the political landscape is disrupted. And what we realized is we had a need to disrupt ourselves.”
Part of this disruption, Hulett says, is reshaping and communicating the culture of the organization and its alignment to company values. “We see our culture change as something that’s going to give us a competitive advantage, so we outlined 12 behaviors and those are behaviors that include some things that we do very well already today but also some things that we want to change.”
These behaviors include things like trust, transparency, agility, and experimentation, and align with three core behavioral pillars that drive Ericsson’s desired culture: act to execute, act to accelerate, and act to win. This is all reinforced by the organization’s recognition program that they execute in partnership with Achievers.
“Recognizing employees for exhibiting company values and displaying specific behaviors increases the likelihood that those employees will repeat those same behaviors,” says Jeff Gelinas, vice president of product and people for Engage2Excel. “Positive reinforcement motivates employees to exert the discretionary effort needed to improve business performance.”
“Recognition and rewards programs engage employees and motivate them to apply discretionary effort that improves business metrics such as productivity, customer satisfaction, and shareholder return. Workplaces with highly engaged employees also enjoy lower turnover and absenteeism,” Gelinas says.
According to the 2018 SHRM and Globoforce Employee Recognition Report: Designing Work Cultures for the Human Era, 80 percent of surveyed HR professionals say their organization has an employee recognition program, and the majority say their employee recognition program helps with:
- organizational culture (85 percent);
- employee engagement (84 percent);
- employee experience (89 percent);
- employee relationships (86 percent); and
- organizational values (83 percent).
And the research confirms that values-based recognition improves those benefits considerably. In fact, SHRM’s survey results state that recognition programs that are tied to values are 1.5 times more likely to be rated as “good” by employees, and programs that are not tied to values are six times more likely to be rated “poor.”
As a result, organizations that fail to embed their values statement into every aspect of their business process waste a huge opportunity. “Organizational development research and real-world business experience tells us that behaving in ways that support a company’s unique core values is predictive of great outcomes for people (higher levels of employee satisfaction, engagement, and longevity) and companies (greater levels of productivity and profitability),” says Dr. Natalie Baumgartner, chief workforce scientist at Achievers.
Derek Irvine, executive vice president of strategy and consulting services at Globoforce, believes that the key benefit of values-based recognition is a positive employee experience. He points to the results of Globoforce’s and IBM’s Employee Experience Survey, which found that a positive employee experience greatly impacts the productivity of an organization and generates a higher return on sales and assets.
“When you dig in, what you discover is that one of the key levers of employee engagement is understanding very well the company values, deeply knowing what those company values are, and being recognized and celebrated for living out those company values,” he explains. “Recognition reinforces the values, which in turn gives employees a greater sense of a positive employee experience and greater ROI for the business.”
To ensure the success of a values-based recognition program, organizations should heed the following best practices:
- Connect values to clear behaviors. “It is important to make sure your employees have a clear understanding of what each of your core values is and what those look like in action,” Baumgartner explains. “For example, if one of your core values is ‘Team First,’ you will want to provide a short three- to five-word definition of ‘Team First’ to ensure that everyone is defining that value in the same way within your organization. You will also want to be sure to provide two or three examples of what ‘Team First’ behavior might look like within your company so your people get a sense of what they’re looking for.”
But defining these behaviors isn’t always easy or straightforward. Hulett says that Ericsson’s approach involved engaging current employees and benchmarking with other companies that were experiencing a similar digital transformation.
“About a year ago, we worked with our employees and asked them what are some things that we do really well as a company, and what are some of the things that we need to change in order to disrupt ourselves and be successful in this environment?,” she says. “We got thousands of employee responses and then we also benchmarked externally with other companies.”
Based on this feedback, Ericsson was able to come up with 12 behaviors that embodied their values, existing company culture, and the culture they were striving to create. But it’s not enough to stop there—Hulett emphasizes the importance of constant diligence to make sure that the recognition program produces the desired culture changes. As an organization’s goals evolve, she believes that HR teams need to evaluate their progress and make sure that they revise the recognition process to meet their changing business goals.
- Engage employees. Encouraging a daily practice of recognition with an emphasis on recognition for all employees across all levels helps integrate company values into the fundamental culture of the organization.
“I think we’re on our journey with our culture movement, and for us, the key has been engaging our employees,” says Ericsson’s Hulett. “We call it a culture movement because our employees are really the ones who are creating and helping to create this groundswell. The more we can give them visibility and tools to participate, the more successful we find we are.”
A combination of peer-to-peer recognition and manager-to-employee recognition helps drive high employee engagement in a program. A platform that makes it easy for both managers and peers to interact, thank each other, and recognize each other’s achievements will further increase adoption rates.
“What’s most effective in recognition is that combination of it being manager-to-staff and also very distinctly the possibility of it being peer-to-peer. The moment of recognition is a human thing. It’s allowing people to be human, to have a positive message—a message that supports the strategy, the purpose, and the values of the company; that’s authentic; that’s genuine; and happening frequently throughout the year,” says Irvine.
Adopting this type of multi-layered recognition program has allowed Ericsson to make recognition part of each employee’s day-to-day life. According to Hulett, their approach to consists of three levels of recognition that allow the company values to be reinforced by all levels of the organization. These three levels include:
1. Social recognition which allows employees to recognize peers on the company website for any of the 12 behaviors.
2. Recognition points which can be distributed by peers and managers for executing behaviors in connection to strategy and achieving results against that strategy.
3. Cash awards granted by managers around strategy execution and delivered with an account of what was achieved to reinforce the success.
- Establish role models. A good recognition program starts at the top. In order to effectively align employees with the company’s core values, employees need to understand those values and how they relate to their day-to-day tasks. Senior leadership is key to communicating these goals, highlighting these connections, and providing a positive example.
“A core best practice is definitely executive sponsorship,” says Irvine. “The senior people are behind wanting to reinforce the company values and they see the connection between employees wanting to work for a company with purpose, so it’s really important that senior leadership give their sponsorship to that initiative.”
However, in addition to securing buy-in from senior leadership, it’s also important to create role models at the employee level. “Identify one to three champions in each department within your organization who are culture carriers and ask them to pave the way for others by recognizing those around them (colleagues, managers, reports, etc.) for behaviors that reinforce your company’s unique values,” says Baumgartner.
By actively modeling the company’s values in everything the organization does and making an example out of employees who exhibit these values, Ericcson’s leadership effectively encourages their other employees to do the same. “When we think about our culture, so much of it is just making people aware and making sure that they’re motivated to change. When we can set proof points of people who have demonstrated this behavior and give role models for the organization, I think [it’s] been really received positively. And it actually reinforces our key behaviors as well,” Hulett says.
- Provide frequent and visible recognition. Another key element of effective values-based recognition is visibility and frequency. “Gone are the days when you could recognize somebody once a year and think that that was enough—that is not enough,” explains Irvine. “Our data shows that recognition really needs to be happening at a cadence of every four to six weeks, you need to be touching about 80 percent of your employee population in a year, and therefore about 80 percent of the employee population should be expected to receive recognition every four to six weeks.”
Providing recognition that is frequent and promoted throughout the company improves more than just engagement. “Recognition gives us the ability to make benchmarking and best practice sharing a little bit more recognizable because it is something that we make visible on our website and in our all-employee meetings. I also think it helps us to set the priorities,” says Hulett.
A functional recognition platform that provides social capabilities is one way that organizations can ensure recognition is done well. Gelinas believes that organizations should “provide recognition visibility, either through a social feed or leaderboard, to amplify the recognition experience. Use technology or offline solutions to ensure timeliness of the recognition moment.” Such platforms allow employees to be recognized quickly, specifically, and publicly, empowering employees to truly live by the company values.