Strategic Employee Recognition: How to Make it a Powerful Business Lever

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Jun 20, 2011

Employee recognition and rewards: you know how people talk about it.

It’s the “fluffy” stuff. The “soft science” HR likes to include as part of the benefits package. Something “we should do because everyone’s doing it.” Besides, it’s easy. We just need to recognize people on their milestone anniversaries with the company. Maybe give out a certificate for someone who has “gone above and beyond.”

Those are a few of the misconceptions I hear from time to time about employee recognition programs. I can’t say I’m surprised. Much of the messaging offered in the press and on blogs about employee recognition are the folksy stories about the pat on the back received from a manager or the cool “thing” someone was given as a reward.

Don’t get me wrong; sincere, specific appreciation and praise from managers and peers alike is critical for a successful employee recognition program. So, too, are personally meaningful and culturally relevant rewards. But these are not the sum total of what employee recognition programs can be – indeed, what a truly strategic recognition program should be.

The difference between these traditional recognition and rewards programs and strategic recognition is the ability to serve as a serious business lever that can advance a company’s strategic objectives in a measurable, reportable way.

Making employee recognition a powerful business lever

Let’s use innovation as an example. Survey results released by PwC earlier this month revealed innovation (developing new products and services) is the top priority from CEOs across industries and around the world as a potential means of expansion. In fact, “78 percent of CEOs surveyed believe innovation will generate ‘significant’ new revenue and cost reduction opportunities over the next three years.”

Consider this need for innovation for organization growth with this insightful comment from Freek Vermeulen in Forbes:

The vast majority of companies want to be innovative, coming up with new products, business models and better ways of doing things. However, innovation is not so easy to achieve. A CEO cannot just order it, and so it will be. You have to carefully manage an organization so that, over time, innovations will emerge.”

That’s the role of strategic employee recognition: proactively managing company culture such that innovation thrives. This is accomplished by structuring a recognition program that encourages managers and employees alike to praise and appreciate colleagues who demonstrate innovation in their daily work.

Such recognition should include detailed, specific messages of what the employee did that was innovative; why this is important to the team, customer or company; and encouragement to repeat such innovative behaviors or actions.

Strategically recognizing and encouraging innovation (or any other strategic objective or company value) in this way accomplishes three key goals:

  1. Makes an abstract concept such as “innovation” concrete and clear in the daily work of employees, regardless of their role or responsibility in the organization;
  2. Communicates how important senior leaders consider innovative behaviors and accomplishments; and,
  3. Encourages employees to repeat these desired behaviors again and again

Such programs are measurable and reportable in that amount of recognition given for innovation can be tracked by employee, team, division or organization as a whole. This allows management to intervene in low-performing areas and learn best practices from high-performing teams and individuals. This tracking makes it possible to proactively manage company culture to facilitate innovation.

Managing company culture with strategic recognition

At its highest level, the primary benefit of strategic employee recognition is its ability to proactively manage company culture. This requires support from the top. Referring back to the PwC study cited above:

According to the PwC study, … the drive for innovation must arise from the CEO and other executive leadership by creating a culture that is open to new ideas and systematic in its approach to their development.”

Regardless of the strategic objectives of an organization – innovation, customer service, etc. – CEO sponsorship, endorsement and advocacy is required to ensure adoption by all layers of management and full appreciation of the importance of those objectives by employees.

The first step for HR pros looking to implement a truly strategic recognition program is securing CEO sponsorship and backing. Once senior leadership understands the powerful reporting and intervention mechanisms possible through strategic recognition of critical company objectives and values, gaining CEO support becomes easier.

It’s time to stop seeing employee recognition as a “nice to have” benefit and recognize it for the strategic influence it can have in an organization – when correctly applied.