Building a rewards & recognition program: One size does not fit all

Remember the baseball movie epic Field of Dreams? In it, Kevin Costner’s character, Iowa farmer Ray Kinsella, hears a voice saying, “If you build it, he will come” with the accompanying vision of a baseball diamond. Heeding the call, he plows under his cornfield in favor of the turf and “he,” Shoeless Joe Jackson, and later “they,” others from the 1919 Chicago Black Sox, do come.
Hoping that life imitates art, many HR managers and leaders hypothesize that a recognition program is as easy as 1, 2, 3: sign up with a gift vendor, put your company logo on the standard web template and begin dispensing points, gifts or other awards. That works…if your only goal is marking 1, 2 & 3 from the to-do list. In reality, once it’s built, not too many come, not too much is accomplished and sooner or later senior management starts asking, “So why are we doing recognition again?” Effectual, strategic employee recognition, like other lasting and essential objectives, is not quite that straightforward.
Having seen companies go through this for over two decades, my first piece of advice: don’t pre-suppose that you or your vendor know what solutions are best for your organization without first doing your homework. In addition, don’t let your unique circumstances be pressed into a standardized program. Your focus needs to be on working with your vendor and stakeholders to design an employee recognition solution that produces the maximum impact within your unique business environment and truly effects staff morale. But how do you do this?
A good way to start is by working through a solution design process. Do a thorough assessment of your current recognition state by reviewing relevant employee survey data, conducting focus groups and executive interviews. Next, conduct a facilitated design session where you bring all your key stakeholders together. Find a seasoned facilitator/design consultant either internally or externally who will work with you to answer a few questions like:
What are our objectives and key success factors?
What recognition program criteria will reinforce our desired objectives and goals?
What guidelines should we consider to ensure consistency and fairness across our organization?
What award currencies–cash, gift cards, points, merchandise–and what value should we use in our programs? What are the pros and cons of each?
What should be the approval process for each program, i.e. peer-to-peer vs. manager to employee, or team recognition?
How do we communicate to and train our managers and leaders so they understand the what, why and how of recognition?
How do we measure our return-on-recognition-investment (RORI)?

A key deliverable from the design session is a recognition blueprint. A good blueprint includes plans for:
Alignment and impact – Your recognition reflects your organization and aligns with your goals, objectives, mission, vision, and values.
Leadership development and training – Train your managers. Companies who invest in training deliver on average return on equity three times higher than those who don’t.
Communications – Keep recognition top of mind and bolster what’s most important at your company. With effective communications your recognition takes off; without, it pancakes.
Measurement and assessment – Focus on metrics to drive RORI and validate to your key stakeholders that strategic employee recognition is good business and can improve your bottom line. A Towers Watson study on global recognition showed that a 15% improvement in your employee engagement scores can lead to a 2% improvement in operating margin.
Awards – What award currency works best for you? How often should your people be recognized (frequency) and what percentage of your employee population should be recognized (reach)? How much should you plan to spend on awards in Year 1, 2, 3 and so on?
Ongoing impact management – After implementation and launch, you need to ensure that your solution continues to meet the ongoing goals and purposes of your strategy. Continually review and fine-tune to meet your changing needs.
Technology – Technology is important and an assumed component of any recognition program–dashboards to track activity and results in real-time, social appreciation tools to extend the reach for the recipient and great fulfillment systems. Technology will be most effective as it supports the key strategies outlined above.
Whether you develop a recognition program internally or work with a vendor, look for a stable software platform that is customized to your brand, is easy to use, and has recognition tools and reporting to assist your users, managers and administrators in their unique recognition roles.
Build your employee recognition solution the right way and they will come. You can drive sustained, positive culture change and lasting business impact.

Chris Vyse – O.C. Tanner
www.octanner.com/blog

The High Cost of Disengagement

Do you wonder how many of your employees are just showing up to pick up a paycheck? PeopleMetrics’ Employee Engagement research found that 12% of all employees are actively disengaged at work. Twelve percent may not seem like such a big deal, until you consider the myriad costs this 12% brings to your organization. According to The Economist, 84% of senior leaders say Disengaged Employees are 1 of the 3 biggest threats facing their business. Yet only 12% of them report regularly tackling the employee engagement problem—perhaps because it can be difficult to assign costs to under-performance.

This article delineates three ways that employee disengagement costs companies money.
1. Direct Cost to Employers.
Gallup has estimated that that employee disengagement costs the overall US economy as much as $350 billion every year. That’s a staggering number, but it’s hard to get motivated to tackle such an endemic problem. Instead, think about what each company loses per year: at least $2,246 per disengaged employee.

The specific expenses contributing to those numbers vary by company, but a few costs generally associated with employee disengagement include:
*Disengaged employees take more sick days and are tardy more often.
*Disengaged employees undermine the excellent work their more engaged colleagues accomplish. Constant complaining is a common characteristic of disengaged employees.
*The decreased productivity of each disengaged employee costs each employer $3,400 to $10,000 in salary, according to Gallup research.
*Missed deadlines and poor sales results are common characteristics of disengaged employees.
*Customer complaints often rise with employee disengagement. Disengaged employees create disengaged customers because frustrated workers can’t help but pass on their cynicism and negativity.

2. Low Employee Engagement and Low Company Performance. Employee disengagement definitely contributes to inadequate company performance. Dozens of linkage studies have compared companies’ employee engagement rates and business performance levels. Our own research has demonstrated that:
Highly profitable companies have 50% more Engaged employees versus unprofitable companies
Teams with high levels of Engagement sell over 20% more than teams with low Engagement
Bottom line: disengaged employees drag down overall company performance.

3. Turnover Costs to Train New Employees.
As employee disengagement grows, so does the risk of talent loss. Corporate Executive Board research has found a 13% increase in the number of high-potential employees desiring to leave their current companies in 2011. Another metric to calculate a portion of the cost of employee disengagement in your organization is to consider how many of your talented employees left in the last year. How much did you spend on training those employees? And how much will you spend to train new employees?

Conducting an Employee Engagement survey is a good way to begin evaluating engagement levels in your ranks. but it’s not enough. In fact, many employee engagement surveys end up stranded on some executive’s desk.

Has your organization taken an employee survey? What has happened since you've receieved the results?

Author: Kate Feather
*This post originally appeared on PeopleMetrics Industry News