Recognition & Rewards

The Pulse of Recognition

A recent poll shows three growing trends in workplace appreciation.

By Cord Himelstein

Recognition continues to be a driving force in keeping employees motivated, and now more than ever, companies are turning it to their advantage as workforce trends develop. A recent poll of 400 SHRM attendees found HR professionals have:

1) Increased focus on linking employee recognition with wellness programs;

2) Greater commitment to recognizing employees early on in their career; and

3) Renewed emphasis on recognition program measurement.

Wellness Programs Engage

When asked which recognition programs HR professionals were looking to implement or expand in the coming months, above and beyond and peer-to-peer incentives ranked first and second while a new growing trend around wellness initiatives ranked third. According to the poll, 40 percent of respondents want to increase recognition and incentives that are tied to wellness efforts.

The idea of holistic employee wellness is becoming a priority for organizations with the recent explosion of wellness program activity. The increased focus on national health due to the full implementation of the Affordable Care Act (ACA), along with the recent social push for a higher minimum wage and paid sick leave, all influence how both employers and employees approach wellness in the workplace.

According to a recent National Business Group on Health (NBGH) poll, 95 percent of surveyed employers will at least have health risk assessments, biometric screening, and/or lifestyle coaching available for workplace employees in 2015, and 44 percent of them plan to maintain and/or increase their investments regardless of their plan sponsor roles. The average incentive offered to each employee for wellness initiatives is around $500, compared to $338 in 2010. Good health is becoming good business sense.

Wellness initiatives are proving to be solid investments. Healthy, stress-free employees are less likely to call in sick and are more productive, and recognition programs provide a reliable framework for incentivizing and rewarding goals. Double that, the passage of the ACA in 2010 created a renewed interest in employee wellness as a way to reduce healthcare expenses. Since the law passed, studies from both Harvard and Rand Corporation have shown that wellness programs can potentially reduce healthcare costs by nearly $3 for every $1 spent, making them an attractive low-risk value.

Early Recognition is Critical

It’s safe to say that service awards remain the backbone and heart of most recognition programs. WorldatWork’s latest Trends in Recognition report finds that 84 percent of all organizations have a process for honoring years of service, and for larger organizations, it jumps up to 90 percent. Only 10 percent of our poll respondents admitted to not recognizing years of service. What’s changing is when companies are choosing to give service awards, and at what frequency.

Companies are now rewarding employees with service awards much earlier in their careers than the traditional five-year milestone. An Accelir poll from 2014 showed that nearly 70 percent of organizations felt that employees should start being recognized and rewarded for service following their first year of work. One in four of respondents said their service award programs started at year one. Yes, early recognition is starting to take hold.

For decades, the five-year mark seemed to be the preferred milestone to start a service award program, but in today’s market, five years is simply too long to wait. According to the U.S. Bureau of Labor Statistics, the average job tenure in America is 4.7 years, and for Millennial workers (aged 25-34), it drops to three years. Thanks to technology, people are less tied to location and can pursue parallel careers with more flexibility. Suffice to say, if organizations not recognizing service or making some sort of meaningful personal connection early on, they may miss the chance altogether.

Program Measurement Aligned with Goals

Traditionally, the return on investment (ROI) on recognition can be notoriously difficult to measure. For instance, 28 percent of poll respondents reported they don’t measure their program at all, which is common for smaller companies where the close quarters and intimacy among staff negates the need for formal measurements.

For organizations that do formally measure ROI, employee surveys ranked as the preferred measurement method with 44 percent of respondents in agreement. This is no surprise given that a vast majority of our respondents had stated their number one goal for recognition programs was to increase employee engagement. Here is where we hit upon the secret to ROI in employee recognition programs: Aligning rewards around the most powerful measurement, which is heavily dependent on your goals. Other respondents measured their program through customer surveys, productivity, turnover, and program participation rates. The point here is a strong employee recognition program has the potential to move all of these metrics.

That must be why Gallup’s Q12 Employee Engagement Survey puts heavy emphasis on recognition as a driver of engagement, featuring inquiries like:

  • In the last seven days, I have received recognition or praise for doing good work.
  • At work, my opinion seems to count.
  • My supervisor, or someone at work, seems to care about me as a person.
  • In the last six months, someone at work has talked to me about my progress.
  • The mission or purpose of my company makes me feel my job is important.

While results may be specific to each organization, the methodology is the same as it’s always been: Make your employees feel appreciated and respected for the work they do, put a system in place to do it consistently and sincerely, and then measure results against your specific goals, adjusting where needed.

Always a Challenge

Recognition programs will continue to grow in 2015, as they present organizations with a valuable way to truly connect with and engage their employees, motivate high performance, and improve retention. While recognizing someone for their accomplishments is intuitive and simple as saying thank you, maintaining and leveraging a recognition program for maximum benefit is always a challenge. But it’s a noble one, and when it works, everyone benefits.


Cord Himelstein is vice president of marketing and communications for Michael C. Fina.

Tags: july-august-2015

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