In a global economy, employers put technology and unorthodox programs to work as they step up efforts to engage and reward employees.
Every employee has a favorite horror story of recognition gone awry. Chester Elton, senior vice president at recognition provider OC Tanner, likes to tell the tale of one employee who arrived at his desk to find a box containing a gold-and-diamond Rolex—that company’s highest honor. Only problem was the employee was all alone when he received the gift—no applause, no public adulation. Worse still, beneath the watch was a 1099 form representing the taxes he would have to pay on his “reward.”
But not all recognition moments are handled so awkwardly. A handful of companies are leading the charge into a new world of sophisticated strategies and systems working full-blast to give employees the continued will to come to work and even (gasp!) like it. In speaking with a selection of executives from five of the largest recognition providers, HRO Today identified key trends that are driving the business of rewarding and incentivizing employees. Among the themes that dominate are:
• Technology, comprising new and evolving systems and uses;
• Bundling of disparate recognition programs (enabled by technology); and
• Strategy, including a movement away from “buying employees with bling.”
“Engagement” is a buzzword of epic proportions in a wide range of industries. The looming retirement of the Baby Boomers and increasing need for specific skill sets have many HR executives quaking in their boots. It’s no longer enough to get a good employee onboard—now, you have to engage their interest from day one and maintain that interest by making sure the employee feels valued.
If you’ve been reading business magazines in the past few years, you’ll know that many blame Generation Y for a new “neediness” among employees—these kids who apparently expect a standing ovation for having successful arrived at their desks for one more day. But as more companies take an interest in and understand the value behind the topic of engagement, they make the connection between engagement strategies and the role recognition programs can play in delivering on that strategy.
“For us, this means recognition can play a strategic role in a company,” said Derek Irvine, vice president of global marketing and client strategy at outsourced recognition provider Globoforce. “Recognizing employees can have a strategic bottom line impact.”
That engagement now takes forms beyond mere tangible gifts—although the mantel clocks and leaf blowers aren’t going away any time soon. According to Peter Hart, president and CEO of Rideau Recognition, a lot of people know about “rewards” but don’t understand “recognition.” Rideau conducted research through World at Work (a non-profit association dedicated to knowledge leadership in compensation, benefits, and total rewards), which found 90 percent of North American companies have recognition programs in place, yet only 60 percent of employees are feeling the love.
Core Values and Corporate Culture “Just because you give someone a gift doesn’t mean you have recognized them,” said Hart. He said a lot of managers still think it’s all about the high-end present, but real recognition lies in sincerity and appreciation, and elsewhere, too. As more companies create programs that reward attention to health and wellness, safety, perfect attendance, and a host of other behaviors that ultimately result in economic savings for the company, these rewards tie recognition symbiotically to a company’s core values and culture.
Michael C. Fina, vice president of the company of the same name, noted, “If a company has core values and they’re pushing employees every day to work towards those core values, it would logically not make sense if you did not incentivize those employees for living those core values. If a company is focused on customer service, why would you not have a way to recognize people who are pushing that core value?” But you have to catch them early, he added.
OC Tanner’s Elton noted that if you give an employee a reward for staying at the company for five years, the message you send is “Thanks for staying,” which is the opposite of turnover. The catch is that most turnover occurs within the first year of service—making your award four years too late.
Elton cited a wealth of positive messaging that can be sent within the first 90 days of on-boarding, noting the “brilliant work” of the Pepsi Bottling Group.
PBG gives each new recruit a key ring and the hope that every time employees drive to work, they will remember that they are what drives the business. Similarly, at the one-year milestone, the company gives employees a pen with the Pepsi logo, because they “write the company’s success.”
“It’s corny,” Elton admitted. “But because it’s corny, it’s memorable.”
But will a key ring or a pen that works wonders in Indiana have the same effect in India, if the company has outposts all over the world? One of the biggest challenges of recognition is the worldwide spread of organizations and the need to reward far-flung workers in ways that are relevant across widely varying cultures, while staying on message and harking back to a company’s core values and corporate brand.
Globoforce’s Irvine noted that Procter & Gamble, which employs 135,000 people in 80 countries and sells products in 180 nations, runs one recognition program on a Globoforce platform. The “Power of You” program goes back to the core contribution an individual can make to the strategy of the company. The program provides not only economies of scale but also consistency of messaging and corporate values. But Irvine emphasized that it’s extremely important to keep the program flexible in terms of how people get that “recognition moment.”
This means training for managers on the ground in whatever geographies implement the program, so rewards and presentations are suitable for the culture and circumstances. “We have the program translated into all the languages managers could need in the corporation, in French or Japanese or whatever. And when those employees collect their reward, it’s in a local currency,” said Irvine.
That also means that if the reward is a gift certificate or something from a catalog, it’s culturally relevant. In India, the top choice of gift is tickets for the latest Bollywood release; for the U.K. or Germany, the most prized reward is something to help with a DIY home improvement project.
According to Paula Godar, director of brand communications at Maritz Motivation, the customization of rewards programs goes beyond cultural differences. Increasingly, she said, it’s being carried to the individual level. Maritz did a study about recognition, and rather than asking about employee preferences for the typical trophies or service anniversary rewards or other tangible items, the survey broke new ground. What struck the most resonant chords with employees were things such as flexible scheduling, the freedom to choose how they achieve their goals, the ability to mentor someone, and other unusual perks. The preferences were as unique as the employees themselves.
“We’re seeing a difference in recognition,” said Godar. “We think companies will have more of a need to understand individual preferences and manage those preferences,” with a big emphasis on how to get managers to deliver.
All of which begs the question of how to manage a recognition program with as many appendages as a giant squid. That’s where training and technology come into play. Recognition providers these days offer sophisticated systems that give end users a single place to go, especially when it comes to the back end of procurement, according to Godar. Technology enables a company to track expenses and show results, eliminates silos where different managers are implementing their own discrete recognition programs, stays within the parameters of Sarbanes-Oxley and other regulatory mandates, and provides self-service to employees who want to know how many points they have and what kind of gift they can redeem, whether they are in Bangor, ME or Bangalore, India.
At Globoforce this customization is orchestrated through on-demand software over the Internet, custom-configured for each client in the right language and currency. A series of web interfaces targets managers and facilitates employee nominations. The system can manage budget and approval needs, as well as workflow. Managers can issue rewards to individuals or teams, and employees can visit a site to learn about the values being reinforced, turn the reward into something of genuine interest and value to them, and go shopping.
“Using the system’s dashboards, a recognition manager in Indiana can see what rewarding activity is happening in the company all over the world, for what reasons, what’s being spent, and what messages are included,” said Irvine. Managers can also uncover and adjust the strategy of their recognition programs by tracking the kinds of initiatives being rewarded and whether there’s a link between the amount of recognition and product or service quality.
Whether the tools are technological or psychological, the desired end result is the same: employees who understand the company’s mission and want to help bring it to life. At OC Tanner, the toolbox is a coordinated suite of programs.
“Where do I touch the employee, and are those ‘message moments’ the same?” asked Elton. Even more, do the moments have synergy? He emphasized the need to coordinate messaging through self-service packages that provide a recognition hub where employees can tap into milestone programs, campaigns for day-to-day recognition, and more.
“You have several tools in the toolbox—it’s very smart thinking,” said Elton. “It lets you leverage as much as you can.”