Employee Recognition: Business Insights Employee Recognition in ...

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Employee Recognition in 2016 Benchmarks and Insights  Is employee recognition effective?  How are companies using it?  What makes it work better?

Employee Recognition: Business Insights

1 Employee Engagement Insights

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Introduction Recognition programs are an important tool in business. A well-run recognition program can drive the right behaviors, improve retention and increase engagement. In this study, we surveyed 399 HR professionals to get insight on the state of recognition programs. We learn how well recognition is working and how to make it work better.


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Part 1: Is recognition working? The most important question is whether recognition is working. Let’s look at the data:



69%



50%



of respondents report their employees greatly appreciate the program, 23% say employees are neutral, and 8% say it is not greatly appreciated (Figure 1).

of respondents report it is driving desired behaviors in their organization; 32% are neutral, and 17% say it’s not driving those behaviors (Figure 2).1

“We have an Employee Engagement Committee comprised of employees from day and night shifts. They meet quarterly to brainstorm new ways to recognize employees.”

53%

of respondents report managers appreciate the power of the recognition program, 29% are neutral and 18% say managers don’t appreciate the power of recognition. (Figure 3)

TAKEAWAY: Most organizations are having success with their recognition program, but some need to improve their practices because right now they are not seeing an impact. The graphs on the following page break the results down in more detail

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Percentages do not always add to 100% due to rounding.


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Figure 1: Employees greatly appreciate the recognition program

“We have identified that recognition is one of the most important aspects to employee engagement.”

Figure 2: The recognition program drives desired behavior

Figure 3: Manager appreciate the power of the recognition program


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Is recognition worth investing in? Perhaps the most interesting question is whether respondents are convinced recognition works well enough to justify increased investment. The data gives a clear answer:



78%

of respondents believed it made sense to increase investment in recognition; 18% were neutral, and just 4% did not support increased investment (Figure 4).

“The ability to give an item with logo on it instantly goes a long way.”

TAKEAWAY: A strong majority of organization believe increased investment in recognition will pay off. Figure 4: Increased investment in retention will have a positive impact


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Part 2: Managing the recognition program When establishing a recognition program HR leaders have to consider:     

To what extent can we get top management involved? How much should we centralize the process? What kinds of awards should be use? What technology should we adopt? How can we measure the results?

In this study we looked at what organizations are doing on each of these questions.

Top management involvement The first finding was that 47% of organizations have top management quite actively involved in the program (Figure 5). That so many leadership teams care about recognition programs is encouraging, however it raises the question of why a slight majority of organizations don’t have leadership actively involved.

“A program is more than an expense. It has ability to tie the values of the organization to the behaviors of an employee. Be intentional and don't let management excuse themselves by saying ‘It’s not in my nature to do it.’”

Figure 5: Top Management Involvement with Recognition


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Centralization There is a spectrum of centralization from companies that have highly centralized recognition programs to those where each unit does their own thing. About 1/3 of companies have highly centralized recognition programs (Figure 6).

Takeaway: Centralization helps if the organization wants to invest in technology, measure the recognition program or ensure best practices are followed. However, given the success of recognition programs a decentralized program is probably better than no program.

“Management should know that you don't have to spend tons of money to recognize staff.”

Figure 6: What is the degree of centralization

Centralized

Decentralized

Types of awards There are many different types of recognition, but the most popular form of recognition is still the service award. The second most common form is peer to peer recognition. Peer to peer recognition is used by half the respondents in this survey. The frequency with which different awards are used is shown in Figure 7.


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Figure 7: What types of awards are given?

Service awards Peer to Peer Recognition Manager Driven Recognition On the Spot Recognition Sales awards Points‐based recognition 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Use of technology Organizations have been slow to adopt recognition technology. Only about 40% have online award selection /redemption. Interestingly the second most common technology is online peer nomination; and that fits with the growing enthusiasm for peer to peer recognition. Figure 8 shows the popularity of different types of technology.


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Figure 8: What types of technology are used? “Programs don’t run themselves. Identify who will manage it.”

Takeaway: Most organizations has the opportunity to improve recognition processes by implementing technology.

Measuring the impact All significant HR programs should have some measures of success, and that includes recognition. Just over a third of organizations (36%) have useful measures of their recognition program, 24% are neutral on the usefulness of their measures, and 41% don’t have useful measures (Figure 9).

Takeaway: Those organizations that don’t measure the impact of recognition should note that others organizations are successfully measuring their program. If measurement is difficult, seek out a vendor who can help. Figure 9: We have useful measures of the impact of the recognition program


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Part 3: Making recognition more effective The survey yielded good insights on what actions organizations can take to make recognition more effective. The two big levers were:

 Top management involvement  Employee understanding

“Management should know recognition is not an ‘extra’ and its need to be uniformly implemented and administered.”

Top Management Involvement The data shows that a big driver of success in recognition is managerial involvement. 

Employees are more than 2x as likely to have a good understanding of recognition when top management involvement is high.



Managers are 3x as likely to appreciate the power of the recognition program when top management involvement is high.



The recognition program is more than 2x as likely to drive the right behaviors when top management involvement is high.


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Figure 10: Effect of Top Management Involvement on Recognition Program

Likelihood of a high level of Employees Understanding Likelihood of a high level of Managerial Appreciation Likelihood of a high level of Driving Behavior

When Top Management Involvement High

When Top Management Involvement Low

Improvement

57%

24%

2.4x

60%

20%

3x

56%

23%

2.4x

Effect of employee understanding of the program Another important driver of success in recognition programs is employee understanding of the program. In 50% of organizations employees have good understanding of the program, but the other 50% need improved communications (Figure 11). This matters because employees are almost 2x as likely to appreciate the program if they understand it (Figure 12).

“We have defined 5 Core Values that drive our program. We empower employees to use points banks to recognize when their peer performs in line with the core value.”


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Figure 11: Employees understand the program “People really seem to value the recognition in corporate communications. Departments often integrate HR-processed recognitions into their meetings.”

Figure 12: Effect of Employee Understanding on the Recognition Program

Likelihood of a high level of Employee Appreciation

When Employee Understanding is High

When Employee Understanding is Low

Improvement

85%

44%

1.9x


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Part 4: Insights from survey respondents Survey respondents shared their insights on what top management needs to know about recognition and what initiatives are working well for them: Checklist on what needs to be communicated to top management about recognition:  It’s important for motivating the right behavior, it’s an investment not an expense.  It’s not just about cash, the informal thank you is very important.  It needs to be done right, it needs to be managed and supported.  Different people are motivated differently, so customize how you deliver recognition  It needs to be done consistently

List of initiatives respondents reported working well:       

Public recognition; e.g. photo with the president. Small group celebrations, e.g. lunches or parties with food. Rewards tuned to individual needs, e.g. time off, new opportunities, gift cards, merchandize with company logo. Years of service awards (these are still very popular with employees). Peer to peer recognition. Training managers so they understand the impact and how to best give recognition. Better communication and visibility.


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Conclusion The survey strongly supports the idea that both employees and manager appreciate recognition programs and that these programs can drive the right behaviors. However, many organizations are not getting the results they should from their program. The two big levers for improving the performance of a recognition program are top management involvement and good communication that helps employees understand the program. Recognition is not a new tool, but it is one that deserves ongoing attention from HR and from management.

About Terryberry Terryberry is a provider of employee recognition solutions, serving 25,000+ clients worldwide. Learn more www.terryberry.com.

About the Author David Creelman is CEO of Creelman Research. He does research and writing on the most important issues in human capital management.


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