Implementing meaningful and frequent recognition ignites motivation and helps fuel productivity, even when uncertainty becomes a distraction.
by Derek Irvine
During recessionary times, companies are often forced to make financial cutbacks, and employee incentives are typically near the top of the list. But companies making these types of cuts do so at their own peril as it could cost them their best talent.
Challenging times are an open field for competitors who often take advantage by poaching talent and wooing them away with signing bonuses and raises. These carrots are particularly dangerous in down economies when employees may be suffering from a psychological recession of fear and demotivation, needing something like a new job or a new influx of cash to boost their spirits and morale. Many experts agree that now is not the time for organizations to eliminate efforts that say “thank you” to employees.
“The only way organizations are going to survive an uncertain economy is with the willing and enthusiastic support of a focused, fired-up, and capably led workforce,” said Bill Catlette, co-author of “Contented Cows Moove Faster,” in the June 2008 issue of Incentive magazine.
Jim Harter, who studies workers’ commitment to jobs at Gallup, was quoted in The Wall Street Journal in an article about the critical role employee engagement plays during tough times: “It helps people to be resilient. Businesses right now…they’re trying to survive. And to survive you’ve got to have some psychological resilience. You’ve got to have employees who are positive despite the negative situations around them…I would argue that recognition is even more important in times like this.”
Forward-thinking organizations should refocus, inspire, and encourage their workforces through cost-effective strategic recognition. These programs must go far beyond annual cash bonuses or performance increases to include frequent, ongoing rewards given throughout the year for a job well done. During a down economy when companies need employees to give more discretionary effort to achieve critical objectives, strategic recognition specifically rewards actions and behaviors that align with company values and help to achieve those objectives, encouraging employees to repeat precisely those behaviors needed for the organization to succeed. Rewards can also be given peer to peer so that everyone can share in the process of noticing, celebrating, and encouraging good work.
The rewards can come in the form of inexpensive gift cards, which employees redeem for gifts of choice like a trip to the spa, camping gear, or even a night out on the town. Many also include the option of making a donation to a favorite charity. Another key element is public recognition for the award recipient, which creates invaluable “psychic income” that goes beyond monetary value to enhance self-esteem and social acceptance in the workplace. Feeding psychic income is a form of appreciation that has lasting impact.
When performed properly, recognition has the power to motivate and engage employees. Studies show that engaged employees stay on the job longer, are more productive and conscientious, and make fewer errors—something all companies could benefit from right now. Ultimately, creating this “culture of appreciation” can impact an organization’s bottom line by as much as 27 percent in increased profitability, according to a 2007 Gallup survey.
Biogen Idec’s Effort
A 2007-2008 global workforce study conducted by Towers Perrin showed that companies with high employee engagement show a 19.2 percent increase in operating income while low-engagement companies show a drop of 32.7 percent. With a potential differential operating income on the line, engaging employees is essential for success.
An increasing number of global companies are recognizing the intrinsic value in outsourcing their worldwide recognition programs. Cost-effective, web-based automated programs enable organizations to readily “operationalize” employee rewards throughout the company with the ongoing support they need to run, manage, and monitor the worldwide effort. Tracking and measurement tools further enable organizations to gain full visibility into program usage to ensure consistent utilization across business units and geographies as well as track ROI.
Biogen Idec, a global leader in the discovery, development, manufacturing, and commercialization of innovative medical therapies, is one company that made a strategic decision to outsource its recognition effort to Globoforce. The company’s program, named APPLAUSE to represent the spontaneous and immediate spirit of recognition, has helped to unite its 5,000 employees in 28 countries around key company goals while promoting a common, positive corporate culture worldwide.
APPLAUSE has been so well received that Biogen Idec opted to expand it just this past September during these tumultuous times to include smaller rewards that can be given more frequently to more individuals within the company’s global workforce.
“We’ve seen the tremendous value ongoing recognition has brought to our organization in terms of creating a more engaged and motivated workforce united around our company’s core values,” said Susan McGowan, associate director of benefits at Biogen Idec. “We firmly believe that expanding this effort—particularly during this recessionary economy—will serve to strengthen our positive corporate culture and provide the necessary ‘thank yous’ that employees need now more than ever.”
Five Keys to Recognition
Below are the keys to building a highly effective ongoing strategic employee recognition program as part of an organization’s total rewards package:
- Build a “Culture of Appreciation” year-round. Kick off a new, year-round employee recognition effort or energize your existing one. Smaller but more frequent gifts can go a long way toward building employee loyalty, reinforce needed activity, and encourage greater discretionary effort.
- Create a “Recognition Moment” through meaningful rewards. Giving employees that generic company watch or one-size-fits-all gift is an uninspiring way to say “thank you.” Rather, reward your employees by giving them the gift of choice—gift cards to top retail, dining, entertainment, and adventure outlets that allow them to choose their own reward with personal meaning. When employees redeem their award, it will create an important “recognition moment” that has a positive, lasting effect.
- Empower everyone in the process from the boardroom to the mail room. Employee recognition should not reside solely on the shoulders of management. Every person in the organization should be empowered to acknowledge their peers and co-workers for a job well done. This enables frequent recognition and engages the entire staff—not just the top 10 percent—in the process. The goal is to involve more than 80 percent of a company’s workforce in the recognition process so that its motivating impact will spread across the entire organization.
- Tie rewards to the bigger picture for bigger results. Employee recognition should be directly linked to the company’s goals and values. This strategic approach can align an entire workforce around achieving critical objectives. In economic times like these, a focused workforce can increase productivity levels and help companies maintain or gain a competitive edge.
- Communicate, again and again. Frequent program communication raises awareness, increases participation, boosts performance, and most importantly helps develop that valuable culture of appreciation. Don’t launch the program and expect it to sustain itself. Management must keep it alive by championing the effort throughout the year.
There is no doubt that today’s economic climate is going to impact businesses of all sizes and have an effect on employees at all levels. However, companies that will be best poised to weather these times are those that identify effective and practical ways to keep their employees motivated, focused, and engaged. Smaller but frequent rewards are a powerful way to achieve those ends. Making this cost-effective investment will serve companies well, helping them to emerge from this recession with their best talent focused and in tact.