Editor’s Note: This is a guest post written by Jimmy Wright – Lead Recognition Consultant at RED – Recognise Every Day – creators of Redii Recognition Software. His opinions are his own.
Companies are always complaining that their employee reward and recognition program isn’t working as well as it could. Unfortunately it’s often a case that their reward and recognition program is largely non-existent.
I’ve written about this before, but given that in reality over half of your employees don’t want to be at work today, and 26% of them are actively looking for another job entirely, wouldn’t it be great if there was a painting by numbers guide to getting it right?
Just like people, every business is different and the subtleties around design, delivery and communication associated with every recognition program are the factors that will ultimately make or break or it.
However it is possible to distil the criteria for success into 5 key points.
Before I share the secrets of a great program design, it is worth recapping why having a formal employee reward and recognition program works.
The simple truth is that businesses that take the time to reward and recognise grow faster, are more profitable and are more pleasurable places to work. If you are in need of some numbers to back up this sweeping statement you’ll find everything you need to build the business case in our eBook that helps you turn the HR team into a profit centre.
Redii.com is owned by RedBalloon Group and it was our participation in the 2009 Hewitt Best Employer Survey that first brought my attention to a really powerful number that in my opinion says enough to get anyone’s CFO on board with a new recognition initiative or increase in spend.
The six businesses that were awarded Best Employer status for 2009 grew their revenues on average by a massive 22% during the GFC. Compare this with the 11% growth achieved by the other 108 participants in the survey. Of the characteristics that this diverse bunch of businesses had in common, a commitment to employee recognition was in the top five.
Recognition is now cited by Aon Hewitt as one of the main three differentiators for high levels of engagement.
So what makes for an outstanding recognition program? One that delivers a transformation in employee engagement, boosts productivity and generates smiles around the Board table.
1. Simple and Structured
Any more than three ways to be formally recognised will confuse your audience. Quite simply there will be too many opportunities to be acknowledged and rewarded and no one will understand how the program works, starting with your managers.
I remember many years ago I went to see a client who had been working on some plans for a recognition program and she emailed me a twenty-plus page document which explained how it was going to work. I read the first two pages and gave up, realising that is exactly what her managers would do with it too. During our meeting we discussed approaches and I tried to do my best to steer her away from such a convoluted set of rules.
Unfortunately we didn’t win the account; I didn’t win a new friend; and I would bet my next employee reward that she didn’t win the hearts and minds of her employees.
Everyone needs to understand the criteria for recognition quickly and easily; how they nominate, how things are approved and what they need to do behaviour-wise to win.
2. Communication is key
If you are not spending some of your program budget on communications then you are missing a big slice of your return on investment. Success is as much about what the audience knows about your program as it is what they actually get as result of being recognised.
Amplify the good stuff.
There will be plenty of times when you need to acknowledge great results and extraordinary behaviours of individuals that don’t fit the criteria; so give frontline managers the freedom and budget to do this as they see fit.
The unexpected stuff gives your initiative even more bang for its buck, but to do this it all needs to be tied to the same branding and run from one platform.
3. Know what to spend
My recommendation for budget planning would be 5-10% on communications, 65-75% on structured rewards, 15-30% on ad-hoc rewards; depending on your legacy activity and organisation’s character.
About 0.25% of payroll is good place to start if you haven’t done anything in the recognition space before.
Some businesses that know what great recognition can achieve are spending in excess of 1%.
4. Stay relevant and related
The historical and vague notion of ‘Employee of the Month’ is out. Your reasons for recognition are fundamental and must be linked to your organisation’s big game, even better when they are developed by group of employees through workshops.
How has what the person or team that you are recognising contributed to the positive development of the organisation’s culture? Or demonstrated a commitment to and understanding of the organisation’s values over and above what could normally be expected? Or played an extraordinary role in the achievement of the plan?
Birthday gifts and ‘length of service’ awards are fabulous ways of demonstrating your organisation’s relational commitment to its workforce but they should never be confused with an investment in recognition.
5. Maximise your returns
What you choose as your ultimate rewards is crucial to closing the loop, getting traction for your program, stories told and maximising your returns.
Employee recognition doesn’t have to be complicated or expensive. But it does make your people feel fabulous and – when done well – helps build connected, empowered workplaces.
Developing a recognition program might start out as a well intended item towards the top of the to-do list but quickly gets pushed further and further down as dealing with poor performance, constant replacement recruitment and absenteeism get in the way of strategic projects. Once at the bottom of the to-do list it quickly gets relegated to the too hard basket.
What if you could solve your businesses’ recognition conundrum in less than half a day?
If you need help devising or refreshing your recognition program we’d be happy to help out or see you at one of our upcoming workshops.
Jimmy Wright from redii.com is a man on a mission to create more connected, productive and happier workplaces using the power of high frequency, social recognition. He also loves cats.