Top 9 Recognition Best Practices Guide

8/6/2019 Top 9 Recognition Best Practices Guide

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TOP 9 RECOGNITIONBEST PRACTICES AND HOW TOIMPLEMENT THEM


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IntroductionWe are what we repeatedly do.Excellence, then, is not an act, but a habit.

Aristotle

It sounds like a simple concept: engaged employees per ormmore brilliantly and produce greater results than employeeswho are not engaged. Take the logic one step urther and youcould say that the end result o having engaged employeesis greater business success. Despite this common sense valueproposition, many organizations have not yet invested in arecognition strategy to engage employees and inspire themto excel.

In this paper, well look at how recognition plays an integralrole in building employee engagement and making excellencea habit. Well share statistics and real-world examples thatdemonstrate how recognition when its done right boostsbusiness per ormance and aids organizations in recruiting,retaining and inspiring the kind o talented people that drivebusiness growth and results.

We will ocus on nine key best practices that you can put to usein your own organization to engage employees and achievebusiness success. You can R&D these proven recognitionstrategies in your own company by R&D, we dont meanresearch and development, but rip o and duplicate. Whyreinvent the wheel when you can leverage the success ulpractices o organizations that have already built a culture o recognition based on engagement and results?

Well also look at what not to do when designing andimplementing a recognition strategy and point out commonpit alls to avoid.

So, are you ready to become a recognition guru?

Lets get started.


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What is Recognition and WhyDoes Your Business Need it?Recognition is an important and o ten overlooked component o the total compensation and rewards package. Employee recognition hasproven to be instrumental in contributing to a positive workplace andorganizational success.

In Maslows hierarchy o needs, the intrinsic desire or recognition ranksmuch higher than the need or salary or rewards. We all crave recognition

or our e orts and a little praise can go a long way toward engagingemployees. Top employers know that a sound recognition strategy can havea dramatic impact on the success o employees, managers and the companyas a whole.

A comprehensive recognition strategy that ocuses on the right thingswill yield results. There are countless studies on the causal links betweenemployee engagement and nancial per ormance and results.

Receiving recognition orachievements is one o the most

undamental human needs. Ratherthan making employees complacent,recognition rein orces theiraccomplishments, helping ensurethere will be more o them.

Stop Demotivating Your Employees!Harvard Management Update,Vol. 11

What recognition does for employees: What recognition does for companies:

73% of managers report getting expected resultswhen they recognized others

The Fortunes Best Places to Work list had a 233%higher financial return than companies not on the list(Souce: Russel Investment Group)

78% report i t helps increase productivi ty Companies with Higher Employee Sat isfactionScores have a 700% higher shareholder return(Incentive study)

80% say it makes getting work done easier

84% claim it helps increase performance

90% say it helps motivate people better(Source: Dr. Bob Nelson doctoral research)

Incentive study found a direct correlation betweenRecognition & Profitability


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In the Towers Perrin 2009 study, or example, it is clear that companiesthat scored high in employee engagement had greater nancial success.Engagement was linked to key business metrics including operating income,net income growth rate and EPS growth rate. These are the kindso numbers your executive team needs to see in order to buy-in to theconcept o recognition.

Its all well and good that you acknowledge that recognition is important,but like most things in business, sound execution is everything. You needthe right tools and approach to see results rom your employee recognitione orts. A loose collection o ad hoc recognition programs will not work, norwill antiquated approaches such as service awards, plaques and certi catesat quarter end or speeches at the annual holiday party. An e ectiverecognition strategy engages employers on a daily basis throughout theyear, creating sustained and consistent results over time.

In the next section, well quickly look at where you should start to build asuccess ul recognition strategy within your organization one that is basedon the latest thinking and research on employee engagement, as well asbest practices rom top employers who have turned ideas into action.

19.2%

13.7%

27.8%

-3.8%

-32.7%

-11.2%

12 Month Change InOperating Income

12 Month Net IncomeGrowth Rate

12 Month EP Groth Rate

Highly Employee EngagementLow Employee Engagement Source: Towers Perrin Sept. 2009

Impact o Employee Engagement on Financial Per ormance


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Executives hate losing, especially to their competition. When seekingbuy-in, look at your competitors recognition and rewards programs.This competitive intelligence and analysis can be an advantagein convincing executives that a recognition program is needed.Organizing a pilot program within a single department and measuringthe results can o ten make believers o the most resistant CEOsand CFOs.

Top 9 Recognition Best Practices And How to Implement ThemLets assume that youve done your homework to make a rock-solid businesscase and obtain executive buy-in or a recognition program. Be ore youstart planning your vacation, there are still some key decisions to make andsome heavy li ting to do in order to build the oundation o your recognitionstrategy. Below well look at what works and what doesnt not only WHATelements are important, but HOW to make your recognition program a

success in the real world.when planning a recognition strategy. Below youwill nd some tips or getting started.

Fortune 100 Best Companies to Work For Versus S&P 500 1998 - 2009

10.30%

6.44%

2.95%

100 BestReset Annually

100 BestBuy and Hold

S&P 500


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De ne Employee Behaviors You Want to EncourageWhat speci c behaviors do we want to see more o in your work orce?When de ning desired behaviors, think about results-basedrecognition: how do employee behaviors relate to company successand your high-level company goals? Remember that an e ectivestrategy recognizes and encourages employee per ormance, notsimply presence. Below are a ew examples o speci c actions andbehaviors that our clients determined they wanted to see more o :

Living Company Values Your corporate values you havevalues, right? can provide a great base or a recognitionprogram: Encourage employees to start living the companyvalues and recognize them accordingly when they do. Valuesare a key part o a unique corporate culture. A large majorityo our clients use values as a base to build their rewards andrecognition program.

Cost Saving Motivate everyone in your organization to looktwice and how company money is spent. Recognize employeeswho spend wisely, treat company unds as their own and ndinnovate ways to save money.

Innovation Encourage employees to contribute innovativeideas and recognize managers who champion those good ideas,so that they can be put into action. Examples o innovationmay include recommendations or process or productivityimprovements, ways to better serve customers or ideas or newproducts or services.

Employee Re errals Re errals are the least expensive wayto recruit talent and generally deliver a higher caliber o candidate. Recognize employees who re er top talent to yourorganization and encourage your work orce to get involved inyour recruiting e orts by posting open positions to their socialnetworks. Make your employees ambassadors or your greatcompany and its culture.

Hitting Goals We all want companies, departmentsand individuals to achieve set goals. For instance, a salesdepartment may want to recognize their sales reps or meetingor exceeding goals set or up-selling, cross-selling or buildingthe sales unnel. In this case, consider providing recognitionnot only or closing the deal, but or all the e orts alongthe way that go into closing that deal in order to encourageconsistent results quarter a ter quarter and build a strong salesorganization.

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To motivate cost savings, several o Comm-works have implemented asimple automated solution to allowemployees to submit savings claims,obtain approval rom nance and

quali y to receive a percentage o the savings back as a reward. Oneclient saved over $1M in one year byimplementing an online cost savingsprogram as part o their rewards andrecognition program.


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Wellness Support your employees in their e orts to bettertheir personal lives and contribute to their community. Topemployers care about their employees health and well-being,as well as about the community in which they are situated. Theydo this because its the right thing, but also because happy,healthy employees tend to be more positive and productive atwork.

Sa ety Ensure a sa e work environment and encourageemployees to report unsa e conditions and/or recommendimprovements to make the workplace sa er. Promoting sa etybrings many operational bene ts.

Note that these positive activities and behaviors arent always HRdriven. Business leaders and department heads can identi y speci cactions they want to encourage within their own department, businessunit or across the entire company.

Determine Your BudgetHow much should your organization plan to spend on rewardsand recognition? Recognition Pro essionals International (RPI)recommends starting with 1-3% o your total employee compensation

a relatively small investment given the potential or real businessreturns. Even better is the act that recognition saying thank-you ora job well done is ree. Not all positive employee behaviors warranta reward, but they do deserve to be recognized.

Peer Recognition Rules!

Perhaps the biggest trend in recognition programs is a peercomponent that allows employees to recognize one another. Peerrecognition breaks down the notion o top-down recognition rommanagers and osters a sense o camaraderie, teamwork and workingtogether toward common goals.

When setting up your program, think long and hard about who can bea recognizer or a recipient o recognition all employees, supervisors,managers, senior executives, and so on.

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Follow the SMT Approach to Recognition

Speci c, Meaning ul, TimelyNo matter what behaviors you choose to recognize, you shouldensure that recognition ollows the SMT approach:

Speci c Recognize others or very speci c reasons and do sowith personalized notes and messages. Recognition is a ormo eedback, and the more speci c it is, the more likely that thespeci c positive behavior will be repeated.

Meaning ul Ensure that recognition resonates with theindividual and is meaning ul in the way it is presented

especially i it is tied to a reward. We strongly suggest lettingthe individual choose a reward that is meaning ul to them, ratherthan deciding what reward to provide. No one thing will work tomotivate all employees, so o ering a broad choice o rewards isa critical success actor.

In launching our own internal program at I Love rewards, westructured and budgeted or our rewards as ollows (using points

or rewards):

Program Type What is it? Who canreceive It?

What is itworth?

FreeRecognition

All employees All employees Pri celessFree recognition based onour values and thank yousfor going above andbeyond

Reward Cards All employees All employees"On the spot"recognition by PeopleLeaders for great work.

LivingOur ValuesEveryday

Recognition of an employeeby their peer for Living a Value of I Love Rewards.

Al l employees Al l employees X by Al l Employees

5X by Senior Team

SpotlightAward

Monthly recognition, votedon by the senior leadershipteam, for the mostoutstanding employee.

X Points

Cost Saving Points awarded tothose who have savedmoney and approved byFinance 10% of costsavings in points

All employees

SeniorLeadership

All employees

All employees Variable based onvalue creation

SocialRecruiting

Rewarded for becominga social recruiter andfor bringing in employeereferrals.

N/A All employees Sign-up X Points

Referral Y Points

DepartmentTop 1

Recognition of eachmember of a departmentwhen the departmentachieves its Top 1 Result!

N/A All employees

New Hire Awarded to a new I LoveRewards employee

N/A All employees X Points

X Points

X from Leadership Team

10X from Senior Team

Who can giveRecognition?

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Timely Ensure that you recognize employees as soon aspossible a ter they meet a goal or behave in a positive manner.Immediacy o recognition rein orces the connection betweenpraise and the positive behaviors and activities you want to seerepeated. Many companies make the mistake o waiting till theend o a month, quarter or even year to recognize someone. Bythat time, the employee may well have orgotten all about thespeci c behavior you are recognizing and certainly they willnot have been encouraged to repeat that behavior.

Build a Recognition RhythmAn e ective program provides a mechanism or regular employeerecognition. Its one thing to launch a recognition program andanother to sustain it so that it has a positive impact on engagementmonth a ter month and year a ter year. I you want your programto have longevity, recognition has to be built into your culture andcompany rhythm. There are a ew o simple tactics to make this

happens:

Dont Recreate a Rhythm (i you dont have to) Use yourcurrent business rhythm, such as scheduled weekly meetings,regular town halls or social committee events, as an opportunityto allow people to recognize one another. Its as easy as addinga line to the existing meeting agenda.

Managers Should Recognize Their Employees at Least Once aWeek Building this into the rhythm allows it to happen. Whatseven better? I you have a system that can track and measure

recognition, you can monitor who is recognizing employeesand who isnt.

CAUTION: Combine On-the-spot Recognition with RhythmicRecognition You dont have to wait or a regularly scheduledmeeting or event to recognize an employees positive behavior.Recognition should be a 24/7 exercise and on-the-spotrecognition can be a power ul motivator. Encouraging a goodcombination is key.

Measure, Review and ImproveEnsure that whatever your programs look like, that you can easilyrecord the activities to make decisions on how to improve theprogram using data, not desire. We suggest the ollowing:

De ne the metrics you want to change based on your corporategoals - and monitor them (see case study on the le t)

Many organizations rewardemployees or providing personalre errals typically only a ter there erral has been hired and has

nished their 3-month probationaryperiod. To make recognitionmore timely and immediate, ILove Rewards provided a smaller

point reward or employees i their re erral makes it through theresume screening process to the rstinterview, and a larger reward oncethe candidate has been hired.

How does I Love Rewards do it?

At I Love rewards, each employeeis given a weekly budget o 500points (equal to $5) to give to anyother employee or living one o the

company values. On a monthly basis,each employee provides a hand-written Recognition Card worth 1,000points to any other employee, whichcan be redeemed on our onlinesystem and rewards catalog using aunique code printed on the card. Wealso include public recognition as acomponent o our daily leadership,departmental and ull companymeetings to help build the on-the-spot component.

Employees may be motivated bymany di erent things, but they allstrive or recognition and praise. Andthey need that positive eedback at

least every seven days.Rodd Wagner and James K. Harter,The Elements of Great Managing(Gallup Press, December 2006).

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At the beginning o the program, de ne what data you needto track towards your overall goals (so it can be captured at

ront end)

Set up weekly, and monthly reporting structures on what reportsshould go where, and who they should go to

Place major milestones quarters away rom launch to review,discuss, and decide on improvements

Also, it is highly suggested to utilize the individual recognition datain your review process. Ensure managers have access to reporting tosee what an employee has been recognized or over time. I youveallowed everyone to recognize others in the organization, you will seesome great data here rom their peers.

Rewards Must be Meaning ul

There are many instances where recognition can be complementedwith tangible rewards. Recognition that is tied to a meaning ul rewardrein orces positive work per ormance, allowing your organization todrive positive results.

Rewards provide trophy value: every time the employee uses,sees or interacts with the reward item, he or she associates it withthe company and the positive behavior that earned the reward. Thereward helps employees recognize that their employer truly valuesemployees and acknowledges positive work habits.

Here are some things to consider when choosing rewards items: Employee Demographics Will your selection o rewards appeal

to all employees based on age, gender and geographic region?

Ful lling Rewards Most organizations have moved away rompurchasing and warehousing their own rewards due to securityrisks and tracking challenges.

Choice o Rewards Will employees be able to choose theirrewards? It is a better experience i they can. The more choice,the better.

Taxation Ensure you are aware o the laws surrounding taxablebene ts and how they impact your employees.

Cash versus Non-Cash Recent studies reveal that non-cashmotivators are more e ective than cash in building longterm engagement.

ConAgra Foods set out todramatically increase their employeeengagement scores or theirrecognition e orts. They askedemployees about what they thoughtabout the current programs, and ayear later asked the same questionsagain. The result rom the question,I am satis ed with the currentrecognition program went rom25% to 91% in one year thats a264% improvement! Capturing thesemetrics was imperative to providemeasurable data that has allowed thecompany to invest more heavily inthese types o programs.

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Make Recognition Public and SocialOne-to-one recognition is power ul on its own, but it is even moree ective when it can be seen by others or shared via employeespersonal networks. Here are a couple o things to consider whendesigning and launching your program:

Encourage Recognition Sharing Whether it is sharedelectronically or in company meetings, it will help build a cultureo recognition.

Make It Public Remember that everyone that witnesses arecognition moment internally may be inspired and encouraged.Public recognition rein orces teamwork and encourages thepositive behaviors that you are trying to drive organization-wide. It is also a communication tool because it makes di erentdepartments more aware o each other and how their business

unctions contribute to corporate goals.

Make It Social Younger employees are taking over thework orce and social media tools like Facebook, Twitterand LinkedIn are the way this new generation o workercommunicates. By allowing employees to share recognition withtheir personal networks, you will not only make e recognitionmore meaning ul to them, but you will also be able to leveragetheir social networks to promote your employer brand online orsupport recruitment e orts.

Keep Your Program Alive

Launching a program with a big bang is great, however keeping theprogram going and sustaining momentum takes care and ongoinge ort. Here are some tips or how to sustain your recognitionprogram:

Brand Your Recognition Program Give your program a uniquelook, eel and name that the company can be proud o . Choosea name and look-and- eel that refects your corporate brandand culture.

Launch with a Bang Launching a new program takes a lot o e ort, change management and communication, but a well-executed launch can create hype and get people excited aboutthe program:

Train your managers so they are part o the launch anda source o in ormation or employees this helps getmanager and employee buy-in.

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At I Love Rewards, customers havethe option to have employees sharerecognitions to social networks withcustom company branding andmessaging to build a better companypro le and employer brand.


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Tease that the program is coming get people talkingabout it prior to launch.

Actually LAUNCH it create a buzz that is un including alaunch day so you can explain that youve been listening,want to improve employee engagement and this is whatyouve come up with.

Dont waver you may get resistance rom employees andmanagers, but stick with it. Identi y a review process in sixmonths to gather eedback on program e ectiveness andemployee support or the program. Make improvements asrequired. No program is static change is good to keep theprogram resh and engaging.

Continuously Communicate; Dont Let It Die Build rhythmaround communicating the top employees recognized and

those who are recognizing others most o ten. Communicatewho has provided value give them recognition in departmentor team meetings. Chat with managers once a month to ensuretheyre using the program and to fag issues.

Our clients have created distinct brands or their

To keep recognition top o mind,everyone at I Love Rewards getsa quick e-mail reminder weeklythat asks Have you recognizedanyone lately? Our program alsohas a leaderboard showing the toprecognized employees as well asthe top recognizers.

Home ShopNow ThankYou L.O.V.E. Leader's Center CreateValue RewardCard CULTure Contact Logout

My Account

Points Balance:

Recognition Budget:

48,000

1,000My AccountShopping CartMessages (42)Administration

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TERMS OF USE | PRIVACYPOLICY 2010 I Love Rewards Inc.

POWEREDBY

Thank You

POWEREDBY

Take the time to thank and recognize the awesome actions of those that contribute to our success!

Start typing their name or e-mail and the results will appear below. You may select more than one person.

Se lec t the names of people you would l ike to recognize Cl ick on Remove i f you have made an e r ror

Achievers know that an A player is nothing without an A team.

Search Name or E-Mail

Search Results Selected Individuals

Rob Bianchin, Inside Sales Representative for making A difference.

T anks


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What Not To Do Common Pit alls to Avoid

The working world has changed dramatically since the industrial age whenmanu acturers aced with high turnover rates or assembly line workers rst started o ering service awards to incent employees to stay on the

job. Un ortunately, despite the changes in the work orce, service awardsprograms, which recognize presence instead o per ormance, have remainedvirtually unchanged.

Razor Suleman, CEO, I Love Rewards

Weve talked a lot about best practices in this paper, but what about theworst practices, the things many employers get wrong when they set out tolaunch a recognition strategy? Below, youll nd three main Donts themost common pit alls to avoid when designing your program.


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Dont Only Recognize Presence I we could make one singlerecommendation, it would be to STOP over-emphasizing Yearso Service awards. Recognition programs do not begin and endwith years o service. Long-term service awards are also guilty o recognizing presence, not per ormance. I Love Rewards has madethe conscious decision not to reward long service. We do, however,recognize years o service and employee career milestones at ourcompany meetings and in our communications in a un manner. Wehave colleagues contribute speeches, poems, songs and interpretivedances (not kidding, weve seen it all) to celebrate the employeestime with the company and his or her contributions, as well as actssuch as naming the company library a ter an employee.

Dont Use a Lottery Dont reward or recognize the whole teamthrough a lottery. Companies commonly mis-apply the lotteryapproach in two ways:

The whole team hits a goal and the names o one or twoteam members are drawn rom a hat to receive a lottery-type prize. These one or two lucky people may not havebeen integral in hitting the goal, in which case randomlyrewarding them will only de-motivate the top per ormerson the team who actually deserve the recognition. With alottery, you end up with a ew winners and a lot o losers.For employees to support a recognition program, they needto believe that it is air and equitable in the way rewards andrecognition are handed out.

Employees are given the chance to win something basedon achieving a result. I the recognition or reward isntcertain, it wont motivate people to act.

Dont Lose Faith Most recognition strategies take time to obtainbuy-in and absorb the change management involved. Like anyorganizational change, you will encounter resistance. You will seeresults right at the beginning and then over time the results andmomentum will taper o . You must keep the aith and stick with it untilrecognition becomes deeply engrained within your corporate culture.Ensure that youre listening and recording eedback, which can beused to guide uture improvements to your program. Capturing andacting on eedback will help make the next iteration o your programa positive one. Its also important to keep the program resh bycontinually introducing new elements, reward categories and rewarditems, and communicating program changes regularly to hold theinterest o employees.

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I LOVE REWARDS |16 2011, I Love Rewards, Inc. All rights reserved. All product and company names and marks mentioned in this documentare the property of their respective owners

I Love Rewards is an employee recognition solution that helps companies recognize brilliantperformance and empower employees to choose their own rewards. Unlike traditional serviceaward programs, I Love Rewards creates authentic moments of recognition that resonate withworkers of any age.

1 Broadway, 14th FloorCambridge, MA 02142 USAPhone: 1-888-622-3343www iloverewards com

Summing UpI you are considering implementing a new employee rewards andrecognition program, the strategies and tips outlined in this paper will helpyou ensure that your program is built on best practices to e ectively engageemployees and contribute to your results-driven workplace. An e ective

rewards and recognition program will make a positive impact on yourbusiness. Good luck and start recognizing!

Next StepsRequest a DemoSee a live demonstration o how an online employee recognition programcan drive positive behaviors, per ormance and results.

Speak with a Recognition Expert

Speak with a certi ed Rewards and Recognition Consultant aboutbest practices or launching and sustaining a success ul rewards andrecognition program.

Contact UsTo get started, visit us at www.iloverewards.com or call 1-888-622-3343.

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Top 9 Recognition Best Practices Guide