Big Rewards

Organizations are leveraging recognition programs to drive productivity and results.

By Russ Banham

As the impact of recognition programs has grown in recent years, so has the framework behind rewarding employees for exemplary work. They go well beyond acknowledging an employee for length of service. Best-in-class programs incent specific employee behaviors and enhance overall workforce engagement and productivity. They can also encourage greater collaboration, generate out-of-the box ideas, and enhance esprit de corps.

Just in time, too. A well-crafted recognition program can be a great tool to reduce turnover rates. Recognizing employees for their unique contributions makes them feel their work has purpose, which contributes to self-confidence and job satisfaction.

Many companies are leveraging employee recognition as a way to create an ownership culture, where employees feel so strongly connected to the organization they don’t need to be told what to do: They just do it. This is the case at Siemens USA, a provider of energy, healthcare, and transportation services and technology solutions. “Our employee recognition programs are aligned with our culture, where people make decisions as if they were an actual owner of the company,” reports Nereida Rios, compensation account manager in the Orlando, Florida office of Siemens USA.

Over the last few years, three types of employee recognition programs have predominated: length of service, performance-based rewards, and recognizing specific behaviors (such as reduced workplace accidents or a higher close rate in sales). And in many businesses, all three are part of the overall program. What drives the structure of individual programs? Most often, it’s workforce goals. Different metrics drive different types of rewards. Some organizations want the reward to increase productivity, while others are more interested in generating higher employee engagement scores.

One way to increase employee engagement is by getting the workforce involved—and social recognition programs do just that. “It gives younger employees, in particular, the opportunity to send and receive comments from colleagues via their smartphones,” says Mike Ryan, senior vice president of client strategy at Madison Performance Group. “It takes what used to be a manager walking by a desk and saying ‘good job’ and makes it into something the enterprise can participate in, amplifying the effect of the recognition.”

A similar concept is the creation of a personal “wall” on the corporate site that contains notes and pictures commemorating employees’ achievements. Employees can even “touch” the wall on their mobile devices to thank their fellow colleagues. “It’s a great way for someone to feel appreciated,” says Anthony Luciano, senior vice president of marketing at Engage2Excel. “It also helps to spread feelings of pride and fellowship throughout the organization.”

Rios from Siemens says the company is in the midst of integrating its employee recognition program in its internal social network. “We see this as a really exciting opportunity to spread the good news beyond just the manager and the employee to the entire team,” she says.

Social recognition is the ideal vehicle to call out length of service achievements during shorter tenures. “Today’s younger workers are more transitory than previous generations. They also have a different take on long-term loyalty. Consequently, you need to restructure the milestones to align with their shorter-term achievements,” says Ryan.

Ryan suggests that companies gear rewards to acknowledge acts just a few weeks into the job. “It could be something as simple as a badge or an icon online in the social recognition system that shows that the individual has completed something like a particular certification,” he explains. “Other employees are apprised that the person, after just two weeks of service, has proven to be a team player. For example, one of our clients recognized an employee who after only a couple months at the company had successfully mentored an older colleague in how to use a new technology effectively.”

A short-term length-of-service award is a great way to enhance employee engagement among the Millennial generation, he says. “Young people today tend to operate in tribes, work-wise,” Ryan explains. “When one leaves a company, the others tend to follow. The sooner you can engage them, the better the chance of retaining them.”

Performance-Driven Rewards

In addition to social recognition, Siemens sees the value of recognizing specific actions and outcomes. Its program, You Answered—executed by Madison Performance Group—is aligned with the company’s external marketing campaign, Siemens Answers.

“We have three basic employee values, which we define as ‘responsibility, excellence, and innovation,’” Rios says. “The recognition program allows employees to nominate a peer whom they consider to have performed exceptionally in at least one of these three areas. The person’s supervisor then provides the person with a cash award, a gift card anywhere from $25 to $500 and more.”

The amount of the reward depends on the level of performance. For instance, an employee who has an idea that results in a financial outcome receives a reward based on the actual business impact. “We recently had a company town hall where our U.S. CEO presented these awards, which was broadcast nationally to all our U.S. locations,” Rios says. “Such individuals are going beyond what is expected from them, which deserves its own category of appreciation.”

Rewards can also be provided for outcomes that are not purely financial. Rios provided the example of a technician in the company’s wind power organization. “We had an emergency situation involving a wind turbine,” she explains. “One of the employees had been trained on how to evacuate coworkers in such an emergency. He actually saved another employee’s life. His performance was beyond the call of duty and resulted in a special performance reward.”

Motivating Behaviors

Rewarding specific behaviors is beneficial to a company’s bottom line. This approach is different than programs that recognize above-and-beyond performance by an employee, such as an innovation that results in a productive outcome. Rather, the reward is linked to a particular key performance indicator (KPI) like sales closure rates or a reduction in customer complaints, as well as various efficiency and cost-effectiveness metrics.

“Recognition is the best tool a company can provide their leaders to motivate specific employee behaviors,” reports Chris Winkelspecht, Ph.D., strategy and services director for Maritz Motivation Solutions. “Whether through an evergreen corporate program that includes core values as recognition criteria or a short-term department-based campaign to shape a newly trained behavior, there are four factors to consider when motivating employees.”

Winkelspecht says the four steps include:

1. Define the behavior associated with the program.

2. Communicate the operational definition, the recognition that can be expected, and why it is important for the business.

3. Ensure the behavior is recognized early, often, and publicly.

4. Deliver recognition that shows the recipient the company knows what they did, appreciates the impact of the action, and is personally meaningful.

KPIs are typically aligned with a company’s mission, values, vision, and objectives—hence, they differ across organizations. “It comes down to what a company is specifically looking to achieve,” Ryan says. “Some link the reward to a traditional KPI, while others based them on markers they have created, such as a metric defining a high degree of collaboration or improved customer service.”

Peter Hart, CEO of Rideau Recognition Solutions, says it is important for companies to define the particular employee behaviors they need to achieve a specific KPI. “If you want to hit a golf ball 275 yards, you need to learn how to swing the club—that’s the behavior,” he explains.

“Same is true in sales. If you want a salesperson to do a certain number of sales calls per day or close a specified volume of deals per month, you need to be sure they are trained to do it. To drive this behavior, you might reward the person for completing an educational program.”

The actual rewards also have expanded beyond the usual online merchandise to reflect an individual employee’s pastimes and pursuits. An employee who says he enjoys fly-fishing in his onboarding profile might receive a set of custom-made flies for surpassing a pre-established KPI or venturing beyond expectations, performance-wise. Engage2Excel uses rewards to increase the chances of specific actions. “If you know someone has a hobby, we can link the reward to this hobby to incent a particular behavior,” he says.

He provided the personal example of a highly productive employee on his team who wanted more training to increase her knowledge and expertise. “She never finished college, but it was important to her to go back to school,” he says. “She was such an exemplary employee that we’ve rewarded her with an online program at Cornell to get her diploma, which has made her even more motivated.”

Makes great sense. “To tighten the bond with employees, you need to know what drives them,” he says. “Everyone is motivated differently.”

Russ Banham is a Pulitzer-nominated business journalist and author of more than two dozen books, including histories of Ford, Boeing, Airstream and other iconic companies. 

Posted July 27, 2016 in Performance Management & Rewards

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