After 20 years of studying corporate HR leaders, HRO Today’s publisher discovers the true essence of HR’s value: keeping employees motivated. So why is so little attention paid to the employee recognition space?
It took a trip to Haarlem, Netherlands, for me to finally understand the true essence of HR. I had hints before, but I didn’t see the whole picture. At the intersection of the A9 and A200 highways in Holland lives a most gigantic IKEA store. Housed in a building that was a former Sony distribution center, the Swedish furniture store’s trademark blue-and-yellow sign can be seen from more than two miles away. Three people, standing on top of each other, could fit inside the “I” in the sign.
There works the company’s corporate HR leader, Albert Martens, busy overseeing the store’s HR team with its daily duties and overseeing the global firm’s HRO rollout with ADP and SAP .
As practiced in giant retail stores, HR’s value proposition is laid bare, raw for all to see. Retail is the simplest business. It is only about cost and quality. In a bank or a corporate supplier, a customer’s switching costs are high. But in retail, customers can switch for free. Loyalty is low, low, low. Earning a repeat client takes a missionary zeal. A retailer’s employees are its missionaries. And the retailer’s HR team is simply there for one reason: to ensure the employees can deliver the gospel.
At IKEA, the corporate HR folks are distributed to the stores, close to customers. Even when you are in IKEA’s corporate HR department, there is never a doubt that you are in the furniture retailing business. There are price tags on everything.
Martens, a hard-working, 22-year company veteran who commutes 60 miles each day, was helping me prepare a future story for HRO Today on the missing link between employee satisfaction and customer satisfaction. You’ll have to wait for that blockbuster cover story.
But the point of this column is different. It is about HR’s essence: motivation. As I walked the floor and toured the behind-the-scenes employee dressing and lunch rooms, I saw HR in action. And I saw the magic.
“Some stores sell two kitchens per day, and some stores sell 50,” Martens told me. “But each store has a roughly similar numbers of visitors. What is the difference? Mostly, it is in the motivation of the co-workers.”
Martens went on to explain that motivation is different among workers in different cultures. “In the U.S., Canada, and Britain, for example,” he noted, “performance-based recognition is quite effective.”
As the meeting ended and I headed for the airport for the flight back home to New York, I started recalling three years of notes from similar interviews with
HR leaders. From companies as varied as Prudential , Whirlpool , H&R Block , Unisys , Boeing , GM , IBM, Mattel , Bank of America , BMO Group , BP , BT , BEA , AT&T , Indiana Pacers , Federated , and PHH , the same thread appears. Sure, all these companies have outsourced significant HR administrative operations.
The trouble with this finding is that today’s “employee recognition” industry is overwhelmingly populated with jewelry dealers and corporate logo-wear makers. But HR leaders say that rings and watches—while nice to have—are not necessary. What really works, they say, is a combination of personally delivered manager- and peer-based recognition, along with points-based cash or merchandise programs. To be motivated, people need both community-recognition rewards and “stuff.” But make no mistake, the most important employee motivator is a connection with and approval from peers and managers. As workforce inspiration, mere bling falls flat.
French Emperor Napoleon once wrote that he found it impossible to find people willing to fight for him for mere cash, diamonds, or gold, but “There is no end to the number of men willing to die for a piece of ribbon.” For both HR leaders and recognition providers, these are words worth remembering.