Most managers and executives know that employee recognition is important, but really, just how important is it to the overall good of the business?
Here’s one metric that might shed some light on it: according to new research from Bersin & Associates, organizations “recognition programs that are highly effective at improving employee engagement had 31 percent lower voluntary turnover than those organizations with organizations with ineffective recognition programs.”
Bersin’s research also found that “in organizations where recognition occurs, employee engagement, productivity and customer service are about 14 percent better than in those where recognition does not occur.”
Leaders out of touch with employee recognition
Yes, this helps to build the case for a stronger focus on employee recognition, but the new Bersin research report, The State of Employee Recognition in 2012, also unearthed some other findings that were equally interesting:
- Nearly two-thirds of HR respondents do not think that HR effectively enables recognition in their organizations. This ineffectiveness is underscored by the fact that nearly half of HR respondents report that the organizations’ culture does not support recognition and the fact that most recognition programs are designed to recognize service or tenure. However, those organizations that recognize employees for “demonstrating company values,” “displaying certain identified behaviors,” and “achieving company goals” are far more effective at enabling recognition than those that do not incorporate these attributes.
- Senior leaders are out of touch with how often employees are recognized. Nearly 80 percent of senior leaders believe employees are recognized at least on a monthly basis; however, approximately 70 percent of employees report that they are recognized annually or not at all.
- Senior leaders are not as important to employee recognition as HR thinks. Employees report they do not recognize each other because “there is no established way to provide recognition,” “difficulty in singling out individual contributions,” and “the company culture does not reinforce recognition.” The least common reason employees fail to recognize each other is because senior leaders do not do it frequently – even though this was the top reason cited by HR.
- Programs help create a recognition culture – not the other way around. The roughly one-fourth of organizations which lack an employee recognition program were much more likely to report a top challenge is that the organization’s culture does not reinforce recognition. Further, 92 percent of organizations in which HR had an extremely high opinion of the recognition program reported that their culture was either extremely supportive or supportive of recognition.
Also “out of synch” with modern employment practices
“Today’s $46 billion market for recognition, with its focus on tenure-based programs, clearly is failing, and is out of sync with modern employment practices,” said Josh Bersin, Chief Executive Officer and President, Bersin & Associates, in a press release about the study.
He added: “This new research highlights a huge opportunity for companies to redirect existing expenditures to programs that significantly influence engagement and retention. The findings also suggest that recognition programs should align with an organization’s comprehensive performance management strategy to drive business results.”
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The new recognition research is based on the results of two online surveys of 834 organizations conducted between January and May 2012. It also includes more than 30 research interviews with HR and talent management professionals.
Recognition = staying competitive
Recognition is an important element in moving your business ahead, because employees who feel their good work is recognized and appreciated are much more engaged and perform all that much better as a result. Stacia Sherman Garr, a Bersin analyst and the author of the study, made this very point when she said:
Consistent with the research we produce for our members, this study shows recognition is an important part of an overall performance management approach that regularly reinforces critical employee behaviors and expectations to deliver better employee productivity and business results. As organizations prepare to hire, grow and manage their workforces of tomorrow, it is essential that HR leaders and their teams take the actions necessary to ensure their talent programs remain competitive.”
It’s hard to put it better than that, or to make a better case for why smart companies not only get “why” they need to recognize employees, but they also know how to do it right.
Service awards are alive and well
Of course, there’s a lot more going on this week than the state of employee recognition programs. Here are some HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of talent management. I do it so you don’t have to.
- Are you bored at work? This may be yet another generational difference, but Miami Herald workplace columnist Cindy Krischer Goodman quotes productivity expert Andre Angel who says that, “Gen Y’ers are more easily bored than any generation in history. Studies show that 53 percent of them go on the Internet for no reason at all, which leads to some serious time wasting. “They may appear busy, but between checking the latest sports scores, their email, Facebook, Twitter and texting, hours can go by without any real work being done,” Angel says.”
- Do you really want your company to give you a blender? The Wall Street Journal reports that employee service awards, thought to be dead or dying in most companies, are actually alive and well. “Even as organizations cut costs and trim perks, many are still recognizing staffers’ years of service with timepieces, jewelry or practical items like kitchen appliances and tools,” the newspaper reports. “While the gifts haven’t changed too dramatically over the years, (a handful of iPods and e-readers aside), there has been at least one difference: providers of such gifts say firms are starting to recognize employees’ loyalty earlier. According to a 2011 survey of Terryberry clients, 21 percent of organizations begin recognizing service within the first year with a gift card, certificate, or catalog of choices – while 44 percent start somewhere between years two and five.”
- Wal-Mart cutting pay for warehouse workers? Wal-MartStores has applied its aggressive cost cutting to logistics, the Los Angeles Times reports, “helping to drive down wages and benefits for U.S. warehouse workers, according to a new study conducted by a labor-backed group. The world’s largest retailer has significantly outsourced its supply chain, hiring third-party companies to operate its warehouses and transport its good to stores. Those firms in turn often rely on poorly paid temporary workers, said a report released by the National Employment Law Project, which advocates for low-wage workers.”
- Kronos Time Well Spent cartoon. Kronos, the company that probably makes your organization’s time-and-attendance systems, publishes a regular Time Well Spent workplace cartoon by Tom Fishburne. From time to time I’m posting them here in the Weekly Wrap.