1 19770 Bersin Recognition Framework

BERSIN & ASSOCIATES RESEARCH REPORT | V.1.0

Stacia Sherman Garr,

Senior Analyst

April 2012

A Guide to Designing Strategic Recognition Programs

The Bersin & Associates Employee Recognition

Framework

The Bersin & Associates Employee Recognition Framework 2

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TABLE OF CONTENTS

Introduction 4

What Is Recognition and Why Does It Matter Today? 7

Recognition Defined 7

Why Does Recognition Matter Today? 9

An Introduction to Employee Motivations 11

The Bersin & Associates Employee Recognition 17 Framework

Introduction to the Employee Recognition Framework 17

Part 1: Recognition Strategy and Audience 19

Part 2: Program Design 39

Part 3: Program Launch, Management and Measurement 68

Part 4: Applying the Employee Recognition Framework 87

Final Thoughts 91

Appendix I: Additional Images 93

Appendix II: Glossary of Terms 95

Appendix III: Table of Figures 98

About Us 100

About This Research 100



IntroductionGift cards. Thank-you notes. Coffee mugs. Certificates. Each of these is a form of employee recognition in organizations today. But what do organizations get for the collective $46 billion1 that they spend on recognition and rewards each year? Most of them do not know.

Two factors make recognition programs hard to quantify. First, recognition historically was a grassroots effort, with individual departments or business units making decisions about when, why and how to recognize employees. When you multiply all of these little initiatives across a large organization, the investment in recognition becomes much more substantial; yet, due to its highly dispersed nature, it remains difficult to measure. Second, this highly fragmented recognition approach resulted in the perception that recognition is a nice-to-have local initiative. Even in those organizations which centralize tenure or other annual recognition programs, many still believe that these programs make little impact and, as such, take few efforts to measure them.

In many organizations, this perception that recognition makes little impact is right. One reason for this is that the most common recognition program, an award for service or tenure anniversaries (programs that exist in about 87 percent of organizations), is frequently viewed by employees as an entitlement, not recognition. In fact, our research shows that tenure awards have little or no impact on the outcomes which organizations care about most, such as employee engagement, productivity and turnover.2 Further, many recognition programs are designed to recognize employees for demonstrating company values; yet what gets recognized most often is achieving company goals.3 This disconnect means that the organization sends an inconsistent message to employees about what they should do to receive recognition. The end result of this is that recognition does not appear to make much of an impact in many organizations.

1 Source: Incentive Marketing Association, http://www.incentivemarketing.org/.2 This information is based on our current research on the topic of employee

recognition, the report for which is due to be published 2H2012.3 Ibid.

http://www.incentivemarketing.org/



It does not have to be this way. We have found that recognition can make a difference to employee outcomes. Specifically, our research uncovered that, in those organizations in which employees are recognized, the companys average score for employee results (an index of employee engagement, employee productivity and customer satisfaction) was approximately 14 percent higher than in organizations in which recognition does not occur.4 Other research shows that a 15 percent improvement in employee engagement can result in a two percent uptick in operating margins.5

This study is about creating a recognition strategy and supporting programs that drive those better results.

Our research reveals that progressive organizations look at recognition differently. Most importantly, they have a strategy for recognition that ensures alignment with business goals, organizational culture and other talent management processes. These organizations design their programs to consistently reinforce key behaviors and outcomes necessary to drive business success. Further, they measure the impact of those programs.

The Bersin & Associates Employee Recognition Framework is a roadmap to creating a comprehensive recognition initiative and the individual programs that support that initiative, with the goal of helping organizations to capture as many of the potential benefits of recognition as possible. The Framework is neither a list of best practices nor a process-based overview of recognition. Instead, it is an at-a-glance image of all the decision points that need to be considered when designing a recognition initiative and its supporting programs. It covers recognition strategy, audiences, design elements, launch, ongoing management and measurement. In short, it is your guide to designing a high-impact recognition approach.

In creating this research, we relied on hundreds of years of our collective experience and that of our customers with talent management challenges and solutions. We focused on questions such as the following.

4 For more information, High-Impact Performance Management: Maximizing

Performance Coaching, Bersin & Associates / Stacia Sherman Garr, November 2011.

Available to research members at www.bersin.com/library or for purchase at

www.bersin.com/hipm.5 Source: http://www.forbes.com/2009/11/19/incentives-recognition-engagement-

leadership-ceonetwork-employees_print.html.

http://www.bersin.com/libraryhttp://www.bersin.com/hipmhttp://www.forbes.com/2009/11/19/incentives-recognition-engagement-leadership-ceonetwork-employees_print.htmlhttp://www.forbes.com/2009/11/19/incentives-recognition-engagement-leadership-ceonetwork-employees_print.html



Whatarethestrategicdecisionsthatmustbemadepriortodesigningor launching a recognition program?

Howdoalloftheelementsofrecognitionfittogether?

Whatareallofthecriticalactivitiesofrecognition?Howcantheybedone in a way that has a positive impact on employee performance and business outcomes?

WhatisthemosteffectivewaytoorganizeHRtosupportmanagersin their recognition management activities?

Howshouldrecognitionintegratewithothertalentmanagementfunctions? What resources are necessary to support that integration?

Whatarethebenefitstotheorganizationfromdoing recognition well?

As always, we welcome you to continue the dialogue with us. If you have comments or see areas that you would like to further explore for your organization, please contact us at [email protected] or at 510-251-4400.

Stacia Sherman Garr

Senior Analyst

mailto:[email protected]



What Is Recognition and Why Does It Matter Today?Over the past year few years, the volatile economy forced many organizations to do more with less. As a result, businesses sought new ways to innovate and grow without increasing costs. To better motivate and retain employees during these trying times, many organizations focused on increasing employee recognition. But what does this really mean? Our research found that recognition means different things to different people.

Recognition Defined

We define recognition as the expressed appreciation by one person to another for that persons behaviors, activities or impact. Recognition may or may not be accompanied by a physical or financial reward, as shown in Figure 1. Recognition programs generally are designed to touch a large number of employees across the enterprise (e.g., more than just top performers). In many ways, recognition is part of the total rewards6 an employee receives in that they can provide additional financial recompense for performance. Importantly, recognition should align with an organizations comprehensive talent management approach, and reinforce critical employee behaviors and expectations.

6 Total rewards can include items, such as regular and incentive compensation plans,

benefits, skills development, and career opportunities.

We define recognition

as the expressed

appreciation by one

person to another for

that persons behaviors,

activities or impact.

Recognition may or may

not be accompanied by

a physical or financial

reward.

K E Y P O I N T



7 Emblematic rewards are a type of recognition that includes praise and

appreciation, special projects, certificates, and trophies and plaques.8 Token rewards are a type of recognition that includes rewards of smaller values,

typically around $100. These rewards can include gift cards, candy, flowers, lunches /

dinners and merchandise, or points that can be converted to other items.9 Monetary rewards are a type of recognition activity that includes rewards of

values above $100. These rewards can include special trips (e.g., team outings), awards

conferences, learning conferences, cash / vouchers and extra paid time-off.

Figure 1: How Recognition Fits within Total Rewards

Source: Bersin & Associates, 2012.

Copyright 2011 Bersin & Associates. All rights reserved. Page 1

Tota

l Rew

ards

Recognition

Praise and Emblematic Rewards7

Token Rewards8

Monetary Rewards9 Skills Development and Career Opportunities

Benefits

Compensation and Incentive Plans



Why Does Recognition Matter Today?10

Organizations turn to recognition today because it can have a positive impact on employee performance and engagement. For example, recent Bersin & Associates research on high-impact performance management11 found that, in companies in which recognition occurs, the organizations average score for employee results (an index comprised of employee engagement, performance and productivity) was approximately 14 percent higher than in organizations in which recognition does not occur. Other research shows that a 15 percent improvement in employee engagement can result in a two percent uptick in operating margins.12

Across the past few years, five market factors resulted in organizations to focus more on recognition, including:

1. A volatile economy;

2. The need for greater agility;

3. The flattening of organizational structures;

4. Technology; and,

5. The rise of the millennial generation in the workforce.

In the following, we discuss each of these factors in detail.

1. Volatile Economy As many Western organizations dealt with the economic recession, they found themselves unable to increase compensation, and had to decrease or eliminate bonuses. Further, many of those same organizations reduced portions of their workforces. The upshot was increased pressure on the workers who remained, but with fewer rewards for their harder work resulting

10 Bersin & Associates defines emblematic rewards as recognition that represents

an acknowledgement of contribution, but typically cannot be converted to something

with monetary value. We include certificates, plaques and trophies in this category.

Although they cost some money to produce, they are not seen by the recognizee as

having monetary value. Token rewards include items that cost money, but are viewed by

the recognizee as rewards of token value, usually less than $100. The monetary category

includes things that are not of token value.11 For more information, High-Impact Performance Management: Maximizing

Performance Coaching, Bersin & Associates / Stacia Sherman Garr, November 2011.12 Source: http://www.forbes.com/2009/11/19/incentives-recognition-

engagementleadership-ceonetwork-employees_print.html.

http://www.forbes.com/2009/11/19/incentives-recognition-engagementleadership-ceonetwork-employees_print.htmlhttp://www.forbes.com/2009/11/19/incentives-recognition-engagementleadership-ceonetwork-employees_print.html



in lower employee engagement.13 Coaching and development became a popular (and relatively cheap) alternative to show that the organization still valued the employees remaining on the job. Organizations have similarly turned to recognition, particularly the types requiring low cost per employee.

2. The Need for Greater Agility As we all know, business is moving faster than ever. Organizations need to be able to reconfigure their workforces to respond to new business demands. Some of this reconfiguration will come from new hires and some of it will come from the current workforce. Further, the workforce continues to become more globalized, with increasing competition for top talent stretching across multiple regions. One study found that to sustain economic growth, by 2030 the United States will need to add more than 25 million workers and Western Europe will need to add more than 45 million employees.14 The result is a dramatic need for practices that attract new employees and keep existing employees highly motivated and engaged. To do this, progressive organizations are creating recognition programs that align with business demands and the needs of the broader workforce.

3. The Flattening of Organizational Hierarchies The old days of a top-down hierarchy, in which the manager is the king, rarely exist anymore. Every day, more organizations are adopting collaborative work environments and reducing the levels of management within their ranks. The result is a decline in the number of promotion opportunities available to employees. To continue to show employees that they are valued, organizations are turning to a myriad of recognition approaches that do not include promotions.

4. Technology As we all know, social technology has grabbed hold of the publics attention and time in a big way across the last five years. At the same time, transparency, collaboration and knowledge-sharing have become more the norm within organizations. Many organizations are attempting to leverage both trends by using social technology to increase the transparency, collaboration and knowledge-sharing within the organization. A key element of many social platforms (e.g., LinkedIn and Facebook) is the ability

13 Source: Employee Engagement Index, Gallup Management Journal, 2010,

http://trustmattersgroup.com/spiritoftrust/?p=441.14 Source: Global Talent Risk Seven Responses, World Economic Forum, 2011.



for individuals to give positive feedback directly to others within the network. It is, therefore, a natural extension that employee recognition has become more common in organizations following this approach. In fact, a whole host of technology providers are now offering services that enable this type of online social recognition.

5. The Rise of the Millennial Generation in the Workforce Younger employees typically require more feedback (both positive and constructive) and development than older generations. Given that many organizations are in a situation in which baby boomers will soon start to retire in droves, employers are searching for ways to keep these younger workers engaged, productive and retained. Employee recognition can be a critical tool in doing all of these things.

As organizations prepare to hire, grow and manage their workforces of tomorrow, it is critical that HR leaders and their teams take the actions necessary to ensure their talent programs remain competitive. The subsequent sections of this report are intended to help organizations to understand how recognition can support these efforts and also contribute to the bottom line. We will begin by discussing the different types of employee motivations and why they matter in the context of recognition. We will then turn to the fundamental elements of recognition and how your organization can use them to uncover pockets of productivity today and over time.

An Introduction to Employee Motivations

As shown in Figure 2, there are two main types of motivation intrinsic and extrinsic. Intrinsic motivation occurs when people are internally motivated to do something because it either brings them pleasure, they think it is important or they feel that what they are learning is significant.15 Essentially, the motivation comes from inside an individual, rather than from any external or outside influence (e.g., rewards). For example, students who are intrinsically motivated are more likely to engage in tasks willingly, as well as work to improve their skills,

15 Source: A New Self-Report Scale of Intrinsic versus Extrinsic Orientation in

the Classroom: Motivational and Informational Components, Developmental

Psychology / Susan Harter, May, 1981, http://psycnet.apa.org/index.cfm?fa=buy.

optionToBuy&id=1981-24428-001.

Intrinsic motivation

occurs when people are

internally motivated to

do something because

it either brings them

pleasure, they think

it is important or they

feel that what they are

learning is significant.

K E Y P O I N T



which will increase their capabilities.16 On the other hand, extrinsic motivation comes from outside the individual. This motivation needs to be tapped differently. For example, a student may feel compelled to act a certain way because of external factors, such as money or good grades.

In the context of the workplace, people who are intrinsically motivated in their work will put forth strong effort in a project simply because it is enjoyable and not because there is a reward. However, having intrinsic motivation does not mean employees will not also seek extrinsic rewards available to them.

16 Source: Childrens motivation for reading: Domain specificity and instructional

influences, The Journal of Educational Research / A. Wigfield, J.T. Guthrie, S. Tonks and

K.C. Perencevich, 2004.

Figure 2: Types of Motivation

Source: Bersin & Associates, 2012.Copyright 2011 Bersin & Associates. All rights reserved. Page 1

Intrinsic Motivation

Comes from within an individual

Motivation tapped through actions and activities relating to things individuals

already take pleasure in

Extrinsic Motivation

Comes from outside the individual

Motivation tapped through rewards, grades,

money or threats



However, some social psychological research indicates that extrinsic rewards can lead to over-justification and a subsequent reduction in intrinsic motivation.17 In one study demonstrating this effect, children who expected to be (and were) rewarded with a ribbon and a gold star for drawing pictures spent less time playing with the drawing materials in subsequent observations than children who were assigned to an unexpected reward condition.18 Furthermore, when rewards are taken away from employees who are extrinsically motivated, their motivation and effort have the potential to decline.19

It is important to note that these findings do not necessarily mean that organizations should not leverage the extrinsic motivation of employees; there are definitely times when it can be used to effectively improve performance. Yet, it does mean that organizations should understand both intrinsic and extrinsic motivation, and deploy strategies to drive extrinsic motivation in appropriate situations. For example, it may be appropriate to leverage extrinsic motivation when encouraging employees to change their behaviors (which, perhaps, they did not want to change) or to put forth that extra burst of discretionary effort which they would not have otherwise done.

Another element of motivation to note is the relative importance of money and the research findings that money and its equivalents (e.g., gift cards) are not necessarily the ultimate in employee recognition. One study found that 69 percent of employees prefer praise and recognition from their managers more than financial rewards, and 82 percent of employees say such recognition inspires them to improve their performance.20

17 Source: http://en.wikipedia.org/wiki/Motivation#Intrinsic_and_extrinsic_motivation.18 Source: Undermining Childrens Intrinsic Interest with Extrinsic Reward; A Test of

Overjustification Hypothesis, Journal of Personality and Social Psychology / Mark R.

Lepper, David Greene and Richard Nisbet, 1973, and Wikipedia, http://en.wikipedia.org/

wiki/Motivation#Intrinsic_and_extrinsic_motivation.19 Source: What Motivates Your Employees? Intrinsic vs. Extrinsic Rewards,

Performance Management / Rosanne DAusilio, Ph.D., September 10, 2008,

http://www.tmcnet.com/channels/performance-management/articles/39417-what-

motivatesemployees-intrinsic-vs-extrinsic-rewards.htm.20 Source: Gallup Research, http://www.ehow.com/way_5984783_intrinsic-

extrinsicemployee-motivation-techniques.html.

Extrinsic motivation

comes from outside the

individual and employee

motivation needs to be

tapped differently.

K E Y P O I N T



This information suggests that organizations which primarily recognize employees through financial means are not getting the most possible for their money. Further, a number of other studies21 show that financial incentives can actually hinder creativity and performance. These findings point to the need for organizations to reexamine their incentive structures and to consider how they can better tap into employee motivations. Some organizations may find that, by effectively leveraging a recognition strategy, they could reduce the amount spent on bonuses, while at the same time improving outcomes.

Understanding Employees Needs and Motivations

To help explain the drivers of intrinsic and extrinsic motivation in the context of the workplace, this next section discusses well-known psychologist Abraham Maslows hierarchy of needs. As shown in Figure 3, the hierarchy suggests that people are motivated to fulfill basic needs before they realize other, higher-level needs.22 The highest need is called self-actualization, which is a process of developing to reach ones individual potential.

21 Source: The Influence of Strength of Drive on Functional Fixedness and Perceptual

Recognition, Journal of Experimental Psychology / Sam Glucksberg, 1962. 22 Source: http://en.wikipedia.org/wiki/Maslows_hierarchy_of_needs.

The data suggests that

an effective recognition

strategy does not require

large investments of

budget dollars, though

it does require an

investment of time on the

part of all employees.

K E Y P O I N T



Thinking about this in the context of the workplace, Maslows Framework could imply that managers can help address those lower-level needs, so that employees can focus better on their work.24 So what do employees need from their managers and their organizations?

Let us start at the bottom of the hierarchy in Figure 3 with physiological needs. These needs include the air employees breathe, as well as food and the roof over their heads. Organizations have little impact on these needs.

23 Source: A Theory of Human Motivation, Psychological Review / A.H. Maslow, 1943;

for graphic update http://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs.24 Source: Motivation-related values across cultures, African Journal of

Business Management / Osarumwense Iguisi, April, 2009, available at http://www.

academicjournals.org/AJBM.

According to Maslow,

the highest need is called

self-actualization, which

is a process of developing

to reach ones individual

potential.

K E Y P O I N T

Figure 3: Psychologist Abraham Maslows Hierarchy of Needs23

Source: Abraham Maslows Hierarchy of Needs, 1943.

Esteem (Importance,

recognition, respect)

Love / Belonging (Social, love, family, team)

Safety (Economic and physical security)

Survival (Food, water, sleep)

Compensation and Benefits

Modern Recognition

Career, Development Opportunities

Self-Actualization (Challenge, opportunity,

learning, creativity)

http://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needshttp://www.academicjournals.org/AJBMhttp://www.academicjournals.org/AJBM



Organizations do, however, have an impact on employees second need, safety, which can be defined as the security of things such as body, employment, resources and property.25 Compensation and other benefits help employees secure their safety.

Moving up the hierarchy, some employees will want to fulfill their need for love and belonging by connecting more effectively with the broader organization. Recognition from managers, colleagues and peers can help to satisfy this need. However, it is important to note that other employees may have different ways they need to fulfill the need of love and belonging, such as the desire for work-life balance, which allows them to spend more time with family and friends.

As we continue to move up the hierarchy, employees needs become more complex. Recognition programs can be used once again to build esteem, confidence and acknowledge achievement. These programs could include praise and appreciation, rewards (on top of incentive plans), or even promotions. If these needs are fulfilled, employees can move to the top of the pyramid, self-actualization. At this level, employees can truly reach their full potential it is, perhaps, a state of workplace nirvana. Employees at this level are highly motivated in their roles and successful and are also most likely to engage in development and best prepared to move to even higher levels within the organization.

The above example is not an exact science but, instead, shows how recognition can tap into a variety of employee needs. It is also intended to highlight how needs and the motivation to contribute to the workplace can come together.

In summary, the prior two sections of this report have reviewed many of the elements that drive employees to perform, as well as key market factors influencing recognition. The next section of this report highlights the key recognition elements an organization should consider when creating a holistic recognition program.

25 Source: A Theory of Human Motivation, Psychological Review / A.H. Maslow, 1943;

for graphic update http://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs.

http://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs



The Bersin & Associates Employee Recognition Framework

Introduction to the Employee Recognition Framework

While every organization has a different reason for considering or implementing a recognition program, ultimately, most organizations desire the same basic outcomes. These include the following.

A Focus on Driving Business Results The entire organization is committed to doing what it takes to improve business outcomes. Today, the market demands that organizations run with leaner staffs, operate more efficiently and leverage strategies that enable maximum growth.

An Empowered and Engaged Workforce Organizations understand that meaningful links can exist between engagement, performance and retention. As the economy slowly and steadily rebounds, many leaders are increasingly concerned that they could lose top talent and are looking for new ways to retain their best and brightest; and,

An Attractive Culture Organizations embrace a core set of values, beliefs and behaviors that affect how internal employees interact with each other and other constituents such as customers and shareholders. Organizations that do this well differentiate themselves in the marketplace, gain competitive advantage and are better prepared to achieve desired business outcomes.

The question is, how can an organization achieve these results? This is where the Bersin & Associates Employee Recognition Framework (see Figure 4) comes into play. The Framework is designed to help organizations attain these results by explaining how the different elements of recognition fit together and outlines the points of integration with other areas of talent management. After reading this report, you should be able to determine which recognition elements to design, adjust or eliminate to support your organization in delivering high performance.

Our Employee

Recognition Framework

is a tool to help you

examine the practices

of recognition at your

organization, identify

areas for improvement,

and ultimately drive

increased employee

productivity, engagement

and retention.

K E Y P O I N T



This report will walk you through each of the elements of the Employee Recognition Framework, using the following broad sections:

Part 1: Recognition Strategy and Audience;

Part 2: Program Design; and,

Part 3: Launch, Management and Measurement.

For each Employee Recognition Framework, section, we include the following:

AnoverviewoftheindividualFrameworkelements;

DefinitionsoffundamentalrecognitionconceptswithintheFramework; and,

Examplesofhoworganizationshaveappliedtheseelements.

Figure 4: Bersin & Associates Employee Recognition Framework



Multi-level Structure Key Messages

Audience Executives | Managers | Professionals | Hourly | Organized Labor | Contingent | Critical Talent Segments

Recognition Activity

Design

Employee Support | Vendor Strategy | Talent Management Integration

Gov

erna

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and

Man

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Exe

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Adm

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| O

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Recognition Strategy Purpose of Recognition | Business Goals | Alignment with Culture | Talent Management Integration | Vision | Transparency | Accountability | Globalization

Metrics and Evaluation

Business O

utcomes | P

erformance | B

ehaviors | Em

ployee Satisfaction |

Engagem

ent | Retention | A

ctivity andw P

articipation Level

Launch Branding Plan | Employee Training | Marketing | Communications

Rewards Non-Monetary | Token | Monetary | Company- or Employee-Selected

Budget Amount, Allocation, Control

Criteria Performance, Behaviors, Tenure

Recognizers Leaders, Managers, Teams, Individuals, Clients, External

Direction Top-Down, Peer to Peer, Bottom-up

Approval Rigorous, Informal, None

Visibility Public, Group, Private

Frequency Annually, Quarterly, Monthly, Weekly, Daily

Delivery Face to Face, Letter / Email, Event, Online Platforms

Customization Employee Type, Business Unit / Functions, Geography

Measurement Approach, Methodology, Reporting



We will conclude with a discussion of how to apply the Employee Recognition Framework in your organization.

This Framework is the result of innumerable interviews with senior talent management experts, from a variety of industries, geographies and organization sizes. It is a tool to help you examine the practices of recognition at your organization, identify areas for improvement, and ultimately drive increased employee productivity, engagement and retention. When effectively implemented, the end result is improved outcomes for the business.

Part 1: Recognition Strategy and Audience

Figure 5: Bersin & Associates Employee Recognition Framework Recognition Strategy and Audience






Design


Gov

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Man

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Business O

utcomes | P

erformance | B

ehaviors | Em


Engagem

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ctivity andw P

articipation Level















Recognition Strategy

Overview

Almost all business functions and the divisions supporting them have a strategy to help drive the business forward. That strategy is typically supported by programs with clear objectives and a process for measuring outcomes.

However, our research shows that this fails to hold true for recognition. In fact, a recent study shows that 87 percent of respondents said their organization makes no effort to track the return on investment (ROI) of their recognition program.26

This is remarkable, given that the same study found 80 percent of organizations have some sort of program in place. Moreover, organizations spend more than $46 billion per year on employee rewards and recognition programs.27

Part of the reason organizations do not effectively measure recognition is because traditionally recognition programs have been dispersed across the organization. As a result, those programs lack consistency of goals and measurement.

Progressive organizations are centralizing their recognition initiatives and creating a comprehensive strategy to move forward their business. Similar to all HR programs, executive buy-in and sponsorship are critical to the success of this effort. High-impact organizations effectively develop a holistic recognition strategy that considers eight primary elements, including:

26 Source: http://www.shrm.org/Publications/HRNews/Pages/GloboforcePoll.aspx.27 Source: Incentive Marketing Association, http://www.incentivemarketing.org.

Progressive organizations

are centralizing their

recognition initiatives and

creating a comprehensive

strategy to move their

business forward.

K E Y P O I N T



1. The purpose of recognition;

2. Business goals;

3. Alignment with the culture;

4. Talent management integration;

5. Vision;

6. Transparency;

7. Accountability; and,

8. Globalization.

In this section, we discuss each element in detail, as well as the strategic decision points underpinning them. Without clarity on these fundamental decision points, recognition is prone to being a series of loosely related and unmeasurable events that provide little lasting impact for the organization.

Fundamental Elements

Purpose of Recognition

In a world of bottom lines and cost reductions, why should your organization focus on employee recognition? There are two primary reasons.

First, people typically will alter their behaviors toward desired behaviors in order to be recognized. These desired behaviors should be aligned with the organizations goals. With more people across the organization performing these behaviors, the organization should achieve its goals more rapidly.

Second, recognition is intended to demonstrate to employees that they are appreciated and their work is valued. Ultimately, this can improve employee engagement, which can increase employee performance, satisfaction and retention.

Recognition programs are

intended to incent the

workforce in a completely

different way.

K E Y P O I N T



It is important to point out that the purpose of recognition is not the same as compensation or bonus plans. Both of those programs are often viewed by employees as entitlements, given they are usually predefined and occur regularly. Recognition programs are intended to work in a completely different way. For example, they can be designed to create excitement, build cultural alignment and foster behaviors such as teamwork. These programs also aim to provide extrinsic motivation to staff, so that they will put forth greater discretionary effort essentially getting them to go the extra mile.

In summary, this section on the purpose of recognition is to underscore the importance of defining what your organization wants to accomplish through recognition, and how that relates to employees and the businesss needs. Recognition is something that must be planned strategically and measured objectively. The ultimate intention is to create programs that recognizes people for doing the right things at the right times in a way that will encourage them to do those things again. Once you have had a dialogue with your team about the purpose of recognition, you are ready to move on to the next section of this Framework, in which we discuss the link between recognition and business goal.

Business Goals

Strategic organizations use employee recognition to accelerate their business goals. For example, some organizations establish programs to recognize employees for improving customer service or increasing revenue per customer both of which can be linked to bottom-line results. As your organization works through this piece of the strategy, identify specific business goals and determine how recognition can encourage employees to engage in the activities that will accelerate the achievement of those goals. Focus specifically on how recognition will improve employee engagement, encourage employees to engage in certain behaviors more frequently or help employees understand how to change their behaviors. Both improved engagement (leading to greater discretionary effort) and engaging in more effective behaviors can drive business results.

An example of this in action was when an organization in the automotive industry recognized its factory workers for practicing specific safety measures. The organization had fewer accidents, resulting in savings

As organizations think

through this piece of the

strategy, it is critical to

define what business goals

will be targeted and how

recognition can encourage

employees to engage in

the activities that will

accelerate the achievement

of those goals.

K E Y P O I N T



for the benefits programs. This ultimately improved the bottom line. Another example was when a hospital organization motivated its employees to increase their level of teamwork, more patients received better care and they received it faster. As a result, patient satisfaction scores increased. This gave the hospital more referrals and that translated to increased revenue.

Our research has found that today only about 60 percent of organizations tie their recognition programs to business goals.28 The following is an example of a large technology company that is missing the mark with it recognition program.

Case in Point: Technology Organizations Loosely Defined Goals Show No Hard Results

With 20,000 employees in nearly 50 counties across the globe, a large technology firm decided to create a recognition program to help the organization become more employee friendly. The only problem was that the program was very resource-intensive.

This program was a performance-based program and the responsibility of the business, although there was some coordination by HR and marketing. As part of the program, employees nominated each others projects for the best annual work. To kick off the program, the organizations corporate communications team designed marketing materials to engage employees to nominate themselves, peers or others across the organization. All nominations were posted on the organizations intranet. The corporate communications team also helped to facilitate this by writing key excerpts, so postings were easy to understand.

All of the nominations were then placed in a tournament for judging by HR and operations employees and some senior business

28 This information is based on our current research on the topic of employee

recognition, the report for which is due to be published 2H2012.

Our research has

found that today many

organizations do not

tie their recognition

programs to business

goals.

K E Y P O I N T



leaders. Seven project winners were announced at the regional level, another seven at the functional level and another seven at the business-unit level. Ultimately, there is one winner, selected by the CEO, who is then recognized by the CEO and board of directors. In addition, each regional, functional and business-unit winner gets a plaque.

This process is a lengthy one that requires a lot of time from HR, the business, marketing and employees. When asked how much time this took, the organization responded that it had no idea how much time was required nor did it track the programs costs. Furthermore, the company has not defined how the program will change key goals, performance or behaviors in meaningful ways. As a result, it is next to impossible to determine the ROI or achieve business results. The main issues with this structure are that the HR department has no understanding of the costs and benefits of the program, and the program is not aligned with business goals. e

Before moving on from this section of the Framework, ask yourself and your colleagues the following questions.

Whatareourorganizationstopthreebusinessgoals?

Whichbehaviorsdoweneedpeopletoengageintohelpusreachthose goals?

Howcanweensurethattherecognitionprogramisencouragingemployees to engage in those behaviors?

Alignment with Culture

Bersin & Associates defines culture as the collective set of organizational values, conventions, processes and practices that influence and encourage both individuals and the collective organization to continuously increase knowledge, competence and performance. This includes the attitudes, experiences, knowledge and beliefs within the enterprise. This collective structure influences the way employees relate to each other and also controls how they behave with external stakeholders.

Bersin & Associates

defines culture as

the collective set of

organizational values,

conventions, processes

and practices that

influence and encourage

both individuals and the

collective organization

to continuously increase

knowledge, competence

and performance.

K E Y P O I N T

Case in Point: Technology Organization (contd)



Aligning the recognition strategy with the organizations culture is a critical ingredient to the success of a recognition initiative. However, this is often easier said than done, especially when an organizations leadership team has the perspective that an employees paycheck is thank you enough. Furthermore, some highly competitive organizations that value cut-throat behaviors will have a more difficult time transitioning to a culture that values recognition. While not impossible, it will take longer for competitive organizations to move to a recognition culture, as compared with organizations that already value a balance of behaviors. We are not implying that competition is bad simply that, where recognition is concerned, balance among competitive, collaborative and other behaviors is important.

When considering culture, organizations should also identify when internal or external business circumstances could negatively impact employee satisfaction. While dissatisfaction can be tied to a number of factors, Grace Haven Assisted Livings analysis led it to focus on improving its culture by using recognition. The following case in point illustrates how issues such as declining morale were positively impacted.

Case in Point: How Grace Haven Transforms Its Culture with Recognition29

Grace Haven Assisted Living, located in St. Johns, Michigan was going through a time of rapid change in early 2010. The organization experienced a nearly 200 percent increase in residents over just a few months. This major growth in the business clearly put additional pressure on all employees. Unfortunately, Grace Havens culture had developed into one in which employee dissatisfaction was common. The combination of these factors resulted in soaring turnover and plummeting morale within a relatively short period.

To make proactive changes that would reverse feelings of dissatisfaction, Grace Haven worked to fully diagnose the

29 Source: http://www.corpmagazine.com/management/human-resources/itemid/5872/

transform-your-culture-with-strategic-employee-rec.

http://www.corpmagazine.com/management/human-resources/itemid/5872/transform-your-culture-with-strategic-employee-rechttp://www.corpmagazine.com/management/human-resources/itemid/5872/transform-your-culture-with-strategic-employee-rec



problems and decided to implement an employee recognition program. As a first step to creating that program, supervisors and employees took part in an evaluation process that included interviews, focus groups and an employee engagement survey. The engagement survey identified the key issues that needed to be addressed to reverse the steady decline in morale. After establishing the most critical issues impacting culture, a comprehensive, customized employee recognition plan was developed, which set priorities to address each issue. Implementation included coaching sessions with management and informational meetings with all employees to help acquaint them with the new program.

Within one week of the programs implementation, anecdotes revealed that optimism had increased noticeably. After 60 days, 78 percent of employees had given recognition and 68 percent had received it. Another employee engagement survey revealed steady improvement in all of the areas that program addressed and the positivity continued to grow. Benchmarks were also established, so that the organization could monitor its culture over time. e

Talent Management Integration

Careful consideration should be given to how recognition impacts the other elements of talent management and who will be responsible for overseeing the integration of recognition as a component within it. As part of recognition strategy, organizations should discuss three things. First, they need to determine how recognition can complement the other parts of the talent management function. This includes compensation, benefits, performance management, engagement, succession, learning and even recruiting. For example, how can recognition be incorporated into the performance appraisal process? How can it be used to attract top talent for open positions?

Second, determine any conflicts the recognition program could have with existing talent management strategies, policies and programs. For example, ask yourself questions such as, Do we want to change our rigid vacation policy to accommodate recognition? Finally, leaders need to determine how they can optimize costs. For example, can existing

Careful consideration

should be given to how

recognition impacts all of

talent management and

who will be responsible

for overseeing the

integration of recognition

as a component within it.

K E Y P O I N T

Case in Point: How Grace Haven Transforms Its Culture with Recognition (contd)



manager and employee training programs be used for the recognition effort? Does the organization need to hire new people to run the recognition program or should the team leverage internal resources?

Figure 6 explains how recognition intersects or can complement the existing talent management function.

Figure 6: Strategic Integration Considerations between Recognition and Other Talent Management Activities

Talent Management Domain Action Steps for Recognition

Compensation / Bonus and Stock Option Plans

Considerwhatincentivesbeyondcompensationwillmotivatestafftocontributetotheorganizationsbottomline.

Ensurecompensationiscompetitiveinthemarketplacebeforeimplementingarecognitionprogram.

Benefits / Work-Life Balance

Considerhowpolicies,suchasvacationorflexibleworkschedules,shouldbeadjustedtorecognizepeople.

Determineifrecognitioncanorshouldextendtoeffortsthatpromotehealthatworkorout-of-the-officeactionstoreducethenumberofemployeeabsences.

Talent Capability / Competency Management

Determinehowrecognitionshouldalignwithjobandbehavioralcompetencies.

Implementprotocolssothat,whenthebusinesschanges,competenciesandrecognitionprogramsarecontinuallyinalignment.

Leadership Development

Createtrainingprogramsthatteachmanagershowtomotivateandrecognizeemployees.

Workwithmanagerssothattheyunderstandhowtorecognizetheiremployeesinwaysthataretiedtothegoalsandbehaviorsvaluedmostbytheorganization.

Providemanagerswithassistanceonarticulatingrecognitionmessagesanddeliveringrewardsinathoughtfulmanner.

Performance Management

Deployrecognitionsothatallemployeescangiveandgetfeedbackandreinforcementwhenwarranted.

Encouragemanagerstoleveragerecognitionforcoachingconversations.

Determinethecriticalityofcapturingrecognitioninyourorganizationsperformanceappraisalsystem.




Vision

Once an organization establishes a purpose, considers its culture, determines its goals and integrates those items with existing talent management programs, it can more easily build out its direction or vision for the future.

The first step is developing a clear understanding of the current state of recognition. To do this, either review existing employee feedback (which usually includes the results of employee surveys, one-on-one meetings or focus groups) or collect new feedback from managers and employees to understand what they value most. A common mistake is failing to review employees feedback on their managers. Doing this helps to highlight any areas of disconnect.

Also, plan to review employee performance appraisals and to compare them to business performance. Analyze this information by business unit, function, region and geography, as appropriate. While some regions will have similar challenges, others will have distinct performance issues. This analysis will enable you to determine differences in performance and behaviors, and then segment strategies for the future.

After analyzing this information, integrate it with your findings from the sections that we previously discussed purpose, business goals, and alignment with culture and talent management integration. With this material, you can build a roadmap that depicts where your

It is essential to gather

feedback from managers

and employees to

understand what they

value most.

K E Y P O I N T

Figure 6: Strategic Integration Considerations between Recognition and Other Talent Management Activities (contd)

Talent Management Domain Action Steps for Recognition

Career Management

Leveragerecognitiontohelpemployeesunderstandtheirstrengthsanddrivetheircareerdirections.

Considerhowrecognitioncanbemosteffectivelyusedtokeepemployeesengaged,whileincreasingtheirlikelihoodofstayingwiththeorganizationlonger.

Recruiting / Onboarding

Craftyourrecognitionprogramsothatitalignswiththeorganizationsemploymentbrand.

Encourageemployeestotellfriendsaboutthebenefitsofarecognitionprogram.

Introducenewhirestotherecognitionprogramimmediatelytohelpthemadapttoyourorganizationsculturemorequickly.




organization wants to go and how it will get there. Key questions to answer as part of this process include the following.

Howdowewanttouserecognitiontoimprovetheengagementandperformance of our workforce?

Howshouldwerecognizestaffinthefuturetomeetour business goals?

Doweneedtoadjustourculture,valuesandemployeebehaviors in any way?

Howlongwillittakeustogetwherewewanttogointhefuture?

Whatresourcesdoweneedtohelpgetusthere?

Building a comprehensive roadmap requires organizations to identify the activities and decisions that need to occur before they can execute on its vision. Having a clear direction and documenting where an organization wants to go, how it will get there, and how long it will take, is an important piece of the strategy.

KPMG in Canada is an example of an organization that created a strategy with a clear vision and plan for getting there.

Case in Point: KPMG in Canada Reinforces Critical Business Behaviors with Its SHINE Program

KPMG LLP (Canada) is the Canadian member firm of KPMG International, and is a leader in providing audit, tax and advisory services. The firm has more than 660 partners and more than 5,000 employees operating in 32 locations across Canada. More than a decade ago, KPMG in Canada began its journey from an organization in which a paycheck was considered thanks enough to one that regularly recognizes employees achievements. In 2011, the total rewards and recognition team realized that it was time to take the next step in that journey by updating the nearly 10-yearold program to a social online recognition program. The goal was to provide a clearer line of sight between desired employee behaviors and business needs.

The value of building a

comprehensive roadmap

is that it requires an

organization to conduct

a gap analysis to clearly

show the things that

need to occur before an

organization can execute

upon its vision.

K E Y P O I N T



KPMG in Canadas business strategy requires that employees build strong relationships with clients. To do this, they need to leverage four critical behaviors (see Figure 7). KPMG designed its new online recognition program, SHINE, so that employees could recognize each other for engaging in those behaviors. This nurtures a culture of appreciation and helps employees to see how they can have a direct impact on the business.

The introduction of peer-to-peer recognition with non-monetary and lower dollar value awards that can be distributed with no approval process represented another innovation in KPMG in Canadas recognition approach. This shift was significant, as previous recognition programs primarily focused on recognizing top performers on an as-needed basis, not as a regular practice. KPMG in Canada understood that its business strategy required that it adapt to the needs of its workforce. Since that workforce includes a large population of younger employees, who typically require more feedback, a peer-to-peer recognition program made sense. Further, the additional transparency of the recognition program helped to constantly reinforce the four behaviors.

Figure 7: Four Behaviors Reinforced by KPMG in Canadas Recognition Program

Growth

Delivery

KPMGforLife

CommunityLeader


Case in Point: KPMG in Canada Reinforces Critical Business Behaviors (contd)



From the beginning of its redesign efforts, KPMG in Canada focused on achieving two goals improving the employee workplace experience and reinforcing the critical behaviors that drive business results. Early results indicate that these goals are being met. Employees are enthusiastically using the program, with more than 15,000 recognition activities taking place within the first nine months. Each of these recognition actions serves to further encourage employees to do the very things that make KPMG in Canada successful. e

Transparency

One of the most important elements to think about prior to creating a program is establishing a level of trust between your organization and its employees this is done through program transparency. In some cases, recognition can be viewed as a popularity contest or a matter of quid pro quo (e.g., if an employee does this, he gets that). To ensure employees have faith in the program, organizations must clearly define criteria and communicate program details, including guidelines for winning, the evaluation process and the rewards. In addition, in high-profile competitions for recognition, it is important that all employees who participated in the program know who won and that the person received the prize promised. This helps to give the program greater credibility.

Employees also need to know that the various recognition programs offered across different employee populations and business units are fair and equitable. For example, if an organization only offers programs designed to recognize its highly valued engineers and HiPos30, other groups may feel slighted and think that their contributions are not valued equally. Organizations should consider how employees will perceive the recognition programs offered.

The Calgary Marriott is an example of an organization that designed its recognition program to incorporate an equitable and transparent structure.

30 A high-potential employee is an employee who has been identified as having the

potential, ability and aspiration for successive leadership positions within the company.

Often, these employees are provided with focused development as part of a succession

plan and are referred to as HiPos.

One of the most

important elements

to think about prior

to creating a program

is establishing a level

of trust between an

organization and its

employees this is

done through program

transparency.

K E Y P O I N T

Case in Point: KPMG in Canada Reinforces Critical Business Behaviors (contd)



Case in Point: Calgary Marriott Downtown Evolves Its Recognition Program to Drive Bottom-Line Results

The Calgary Marriott Downtown, part of one of the worlds largest hotel chains, employs more than 300 employees. In 2008, the organization found it needed a tool that would better support its recognition strategy, business goals and employee retention efforts. Although the organization had a number of initiatives in place, they were scattered across various departments. As a result, the programs lacked consistency and there was no way to track whether or not employees were using them. Furthermore, the cost of maintaining the program was high, and it was not effective at driving positive behaviors that it defined for its associates.

To improve its recognition programs and make them more transparent, the Calgary Marriott Downtown redesigned its recognition program to better align with its strategy. As part of this process, the organization adopted new web-based technology. The technology platform offered a points-based system for rewarding Marriotts employees. The organization branded its program S.P.I.R.I.T. Rewards (meaning special recognition, participation in the community, introducing new business, recruitment, innovation and team recognition). This acronym stands for the performance and behaviors most valued by the organization. It also represents measurable criteria that are easy for employees to understand. The system was customized to be interactive and engaging employees and associates were able to earn points at any time for living any of the S.P.I.R.I.T values.31

After implementing this new recognition program, employee engagement increased dramatically. The overall engagement

31 Points are a reward mechanism for employees who meet certain recognition

criteria. Points can be redeemed for a wide range of brand-name merchandise, travel, gift

cards and experiences using an extensive online catalogue.

Employees need to

know that the various

recognition programs

offered across different

employee populations

and business units are fair

and equitable.

K E Y P O I N T



score increased 16 percent, and the hotel had the highest improved employee satisfaction rates throughout Marriott Hotels Northwest region. Furthermore, importantly, the renewed program has impacted the bottom line by motivating employees to focus on suite upselling tripling the number of suite upsells over a two-year period. In addition, the organization saw a 15 percent increase in the satisfaction score on the metric that asked about the quality of the rewards offered to employees, despite the fact that many wages had been frozen or seen minimal increases over a two-year period. e

Program Accountability

Recognition strategies are complicated by the number of people involved, as well as the fact that, typically, no one person or group owns all recognition initiatives. An essential part of the strategy is figuring out who will own what and then holding those people accountable. Key questions which organizations must think about when establishing accountability include the following.

WhatwillbecentralizedandcontrolledbyHR?

Whatwillbecontrolledordecentralizedtothebusinessunits?

WhichresponsibilitieswillbesharedbyHRandmanagers?

Forwhatshouldindividualcontributorsberesponsible?

Another important part of accountability is determining, How can our team ensure we deliver on what we say we are going to do? As part of this process, organizations should analyze how much time the recognition program will take away from managers other critical tasks and if there is any way to simplify the process. If the time required of managers or leaders is too excessive, the program will fail.

An additional element of accountability is determining how the organization will ensure recognition is taking place. For example, will you use employee engagement scores, performance reviews or some other metric? Some organizations may use recognition to support radical change. For example, an organization evolving away from an overly competitive culture may temporarily require its managers to recognize 10

Case in Point: Calgary Marriott Downtown Evolves Its Recognition Program (contd)

An essential part of the

recognition strategy is

figuring out who will own

what and then holding

those people accountable.

K E Y P O I N T



people a quarter for teamwork performances. This approach would allow a company to tie recognition outcomes to managers goals. However, we would note that this type of accountability should be used with extreme caution as recognition is only impactful when it is genuine. If employees think recognition has to be done, it loses its meaning and ability to empower.

By clarifying ownership, prioritizing initiatives and setting measurable goals, organizations are more likely to ensure accountability and are less likely to break promises to employees regarding recognition efforts.

Globalization

The final element of the recognition strategy is globalization. Having a global audience should change your scope. Do you expect recognition to play out uniquely in different parts of the world? How can you use recognition to attract global candidates? As we discussed earlier, the workforce continues to become more globalized and it is essential to customize some elements of recognition to attract and retain top talent. For organizations operating in five or more countries, this will be no easy undertaking. The addition of local champions and experts to the project team is essential and important consideration for making the globalization effort a success.

Strategy Action Plan

To successfully create a recognition strategy, it is important that your leaders are able to answer the series of questions shown in Figure 8.

The addition of local

champions and experts

to the project team is

essential and important

consideration for making

the globalization effort

a success.

K E Y P O I N T



After you are able to answer this series of questions, it is time to think about how recognition should affect different audiences across your organization. This next section of the Framework will discuss those key elements in detail.

Figure 8: Questions Your Organization Must Answer before It Makes Other Decisions in This Framework

Whatisouroverallpurposeofrecognition?

Howdoesrecognitionhelpusachieveourbusinessgoals?

Whatbehaviorsdoweneedtoimprovetoaccelerateourachievementofbusinessgoals?

Howcanrecognitionbeusedtostrengthenourorganizationsculture?

Howshouldrecognitionintegratewithothertalentmanagementprograms,includingcompensation,performancemanagement,learning,engagement,onboardingandmore?

Inanidealworld,whatwouldrecognitionlooklikewithinourorganization?Howdoesthiscomparetoourcurrentstateofrecognition?

Howimportantistransparencytoourorganization?Areourprogramsequitable?Howcanweensureprogramssupportourtransparencygoals?

Whatwillbetherecognitionresponsibilitiesofourorganizationsstakeholders(e.g.,seniorleaders,managers,employeesandHR)?Howwilleachofthosestakeholdersbeheldresponsibleforfulfillingtheirresponsibilities?

Towhatextentshouldthisprogrambeglobalized?




Audience

(Figure 5 is repeated in this section.)

Overview

Employee recognition has the potential to touch nearly every employee within the organization; however, just because every employee can be recognized does not mean it will happen for everyone. The reason for this is three-fold. First, many employees do not know what they have to do to be recognized either they do not understand or were never told. Second, some employees just do not meet the requirements to be recognized. Third, employees who should be recognized are not because an employees manager does not want to spend the time or

Figure 5: Bersin & Associates Employee Recognition Framework Recognition Strategy and Audience






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does not believe in recognizing. To combat these challenges and others, organizations should clarify the roles and activities for every audience that is employed. In this section, we will discuss the different audiences within the employee population and detail the recognition activities that are unique to each segment.


The workforce is comprised of subsets of employees who vary greatly in terms of their needs, expectations, preferences and stakes in the company. We have identified seven subsets of employees (see Figure 9) that should be thought of independently for the purpose of recognition. It is important to note that these subsets may vary by region, industry or even company. These definitions can also vary by hours worked, provision of tools, job autonomy, benefits and compensation. Figure 9 lists the subsets that we have identified in our research and provides definitions for each of them.

Employee recognition has

the potential to touch

nearly every employee

within the organization;

however, just because

every employee can be

recognized does not

mean it will happen for

everyone.

K E Y P O I N T

Figure 9: Recognition Audiences

Audience Definition

Executives / LeadershipSeniorleaderswithintheorganization,includingchief-levelpositionsandthosereportingdirectlyintothosepositions.Alsoincludesseniormanagerialpositions.

Managers Leaderswithintheorganization,typicallyatthemiddle-managerlevelorbelow.

Professionals / Salary / Exempt

Professional-levelemployeeswho,becauseoftheirpositionaldutiesandresponsibilities,andlevelofdecision-makingauthority,areexemptfromtheovertimeprovisionsoftheFairLaborStandardsActsorotherregionallaws.Thehourswhichtheseemployeesworkareexpectedtobeanequivalenttoregionalfull-timestatus,butarenottracked.

Hourly / NonexemptAnemployeewhoselevelofworkentitleshim/herundertheFairLaborStandardsActorotherregionallawstoovertimepaybyanorganization.Thehoursworkedbytheseemployeesaretrackedonanhourlyrateandfallwithinfull-orpart-timeregionalstatus.

Organized Labor / Union Employeeswhoarerepresentedbyalaborunion.

Contingent / ContractAnindividualengagedbyacompanytoprovideaspecificsetofservicesonatemporarybasis.Arolethatisnotseenasafull-timeemployeeforanorganization.

Critical Talent SegmentsIndividualswhoarelikelywithinoneoftheaboveaudiences,butwhohavebeenplacedinasubgroup,aswell,forthepurposesofprovidingadditionalattentionorfocus.Thisgroupcanincludespecificfunctions,regions,joblevelsorstatus(e.g.,HiPos).




Although executives, managers and employees need to meet similar recognition criteria, senior leaders have more responsibility for motivating employees and ensuring recognition practices are adopted by others in the organization. In Figure 10, we describe the activities and roles for each subset of an employee population.

Figure 10: Recognition Activities Unique to Each Audience Segment

Audience Recognition Activities Unique to Segment

Executives / Leadership

Create,exemplify,guideandreinforcetheattributesthatmeetthecriteriaforrecognition. Communicateexamplesofwhatisdeemedworthyofrecognitiontoallcompanyemployees. Distributerewards,asappropriate. Userecognitionmetricstofurtherassesstheengagement,performanceandretentionof

talentacrosstheorganization.

Managers

Modelcriticalbehaviorsandactivities. Motivateindividualemployeestoengageinthosecriticalbehaviorsandactivities. Recognizeemployeesforachievingperformances,andmodelingvaluedbehaviorsandactions. Trackdepartment,teamandindividualefforts,sothatmetricsandeffortscanbebest

improvedonanongoingbasis. Communicateandtrainallcontingentandpart-timelaboronthecompanyscultureand

values,whenappropriate.

Professionals / Salary / Exempt

Participateinrecognitionprogramsthatsupportthecompany,theirteamsandwhichalsohelpemployeestogrowasindividuals.

Communicateupwardtomanagerswhentheydonotunderstandwhattheyneedtodotoberecognized.

Sharefeedbackaboutwhentheydo/donotfeelacknowledged.

Hourly / Nonexempt

Participateinrecognitionprogramsthatsupportthecompany,theirteamsandwhichalsohelpthemtogrowasindividuals.

Communicatetomanagerswhentheydonotunderstandwhattheyneedtodotoberecognized.

Sharefeedbackaboutwhentheydo/donotfeelacknowledged.

Organized Labor / Union

Participateinsomerecognitionactivitiesandcommunicatefeedbackasdefinedinunioncontracts.

Contingent / Contract

Embracebehaviorsandperformancealignedwiththecompanysculture.Whetherornottheseworkersparticipateinformalandinformalrecognitionprogramsisoftendependentontheindustry,lengthofproject,andotherrequirementsspecifictotheorganizationandcontract.

Critical Talent Segments

Participateinrecognitionprogramsdesignedtosupportcriticalsegments(i.e.,leadershiporhigh-performancetrainingprograms,orspecialprojects).ThisisusuallyledbyHR.Thetalentsegmentsshouldparticipateinawaythatsupportsthecompany,theirteamsandwhichalsohelpthemtogrowasindividuals.




Once you have considered the recognition roles and responsibilities for key audiences within your organization, it is important to think about what programs you should create to meet the needs of those audiences. This next section of the report, Part 2: Program Design, will discuss the key elements to consider in designing a recognition program.

Part 2: Program Design

Figure 11: Bersin & Associates Employee Recognition Framework Design and Rewards






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Program Design Overview

Program design is critical to the overall success of the recognition initiative. To do it well, organizations need to design the program with the end in mind. Specifically, HR needs to be clear on how the recognition program will align with business goals and the anticipated impact of the investment in the program. For example, if the organization invests $20,000 in a recognition program, how would employee engagement, customer satisfaction or some other critical metric change? The business case for the investment needs to be clear before program design begins.

Once the business case is in place, organizations should identify who will join the program design team. This team should be comprised of employees from HR, finance, legal and relevant business units and geographies. Once the team is in place, it should establish tactical goals and objectives that support the strategy such as, Create a recognition program that focuses on two core values, or Implement a recognition-based technology platform to increase both employee motivation and transparency in our rewards program.

The program design section of the Employee Recognition Framework is intended to help organizations understand all of the critical design questions that must be answered in the quest toward an exceptional recognition program. Through our research, we have identified 10 fundamental elements an organization should consider when creating a program. These elements include budget, criteria, recognizers, direction, approval, visibility, frequency, delivery, customization and measurement. We discuss each of them in detail in the following sections.


Budget

The first fundamental program design element is budget. A well-designed and documented budget ensures all stakeholders are on the same page in terms of how the program money will be spent. There are three fundamental considerations pertaining to the budget amount, allocation and control. This section will discuss each of them in detail.

HR needs to be clear

on how the recognition

program will align with

business goals and the

anticipated impact of

the investment in the

program. The business

case for the investment

needs to be clear before

program design begins.

K E Y P O I N T



Amount First, leaders should determine the amount that will be spent on a recognition program and from where it will come. The recognition budget generally comes from centralized HR funding (e.g., compensation or other program), business units or functions, or a combination of sources. According to 2011 data, recognition budgets typically average 2.0 percent of the payroll budget, though the median amount budgeted is one percent.32 Intuit, for example, established a budget of one percent of payroll for its awards program.33 Departments can budget more or give higher-level awards by reducing spending in other budget areas. The average 2011 recognition budget is down slightly in 2011 compared with 2008 (2.0 percent of payroll spend versus 2.7 percent, respectively).34 We think the decline partially reflects the recent challenges and volatility in the economy.

Allocations The second element that organizations need to think about is budget allocation. As shown in Figure 12, there are three major areas requiring consensus. First, organizations need to consider how much of the budget will be used to pay for staff (internal or external) to administer the program. Second, organizations need to think about what portion of the central budget will be distributed to each department (e.g., for discretionary rewards or other programs). As part of this process, conversely, stakeholders should determine if individual departments need to contribute any funding. Lastly, organizations should decide how they will allocate the funding toward centralized program initiatives (e.g., rewards allocations for tenure programs or technology allocations).

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1 19770 Bersin Recognition Framework

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Transcript of 1 19770 Bersin Recognition Framework