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Summer 2013 rePOrTEmpowEring EmployEEs to improvE EmployEE pErformancE

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ABOUT THE SURVEY

The Summer 2013 Workforce Mood Tracker™ survey was conducted by Globoforce™ from May 16 to June 3, 2013. This is the fifth deployment of the semi-annual survey since its launch in Spring 2011.

This edition of the survey was conducted by independent market research firm MarketTools. The final sample of the survey was composed of 708 randomly-selected fully employed persons in the United States (aged 18 or older) who are employed at organizations with a staff size of 500 or more employees. The survey had a margin of error of +/- 3.9 percentage points at a 95 percent level of confidence.

ABOUT GlOBOfORcE

Globoforce is a leading provider of social recognition solutions, redefining how companies understand, manage, and motivate their employees. Innovative companies around the world use Globoforce’s cloud-based social recognition software to reveal the true performance and influence of every employee and strengthen company culture. With Globoforce, HR and business leaders can take a strategic approach to recognition programs that result in measurable benefits to the bottom line driven by increases in employee engagement, retention, and productivity. Globoforce is co-headquartered in Southborough, Massachusetts, and Dublin, Ireland.

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Performance reviews are at a pivotal moment in their evolution. The annual performance review in its traditional form is an out of touch relic—increasingly seen as an archaic process that has not kept pace with changes in operational and talent development.

Under fire and taking on water, the traditional annual review is being re-imagined in a way that reflects the realities of 21st century employee development.

Twice a year, Globoforce surveys fully-employed workers in the U.S. to gain insight into attitudes and perspectives on recognition, engagement, and performance. For the Summer 2013 Workforce Mood Tracker survey, we broadened our scope, and asked employees to both identify the flaws in the system and to offer their view for the future.

The results were striking. We find that employees are not overwhelmingly happy with their performance review process. They have a keen sense of its flaws and are eager for change. Moreover, employees have a strong vision of how to make it better—most notably by the adoption of multiple sources of positive feedback.

Based on what motivates and engages employees and what they look for in a prospective employer, survey results indicate a clear evolution toward a more inclusive, crowdsourced process that is focused on real-time positive input from everyone within an organization.

KEY fINDINGSThese are our findings, compiled from 708 survey respondents:

1. Satisfaction with reviews correlates with job satisfaction. Employees who are satisfied with their review process are more engaged and less likely to be looking for new jobs.

2. Employees embrace, trust, and are comfortable with crowdsourcing. Employees use crowdsourced reviews outside of the business environment, trust it, and welcome it as a desirable addition to the review process.

3. Employees know the secret to fixing their own reviews. Employees have a vision for how to make reviews more effective. While they expressed trust in good managers, they prefer broader input and more positivity in feedback.

4. Recognition directly impacts business results. Recognized employees are more satisfied with reviews and perceive an impact on a wide variety of their performance metrics.

5. companies are already successfully crowdsourcing reviews. Companies are already having real-world success using recognition data to enhance their performance reviews.

EXEcUtivE sUmmary

1 / Satisfaction with reviews correlates with job satisfaction.

As the job market improves, many organizations are on the lookout for bellwethers that will accurately predict and impact employee turnover.

Suspecting a correlation between satisfaction with reviews and happiness and effectiveness at work, we asked employees how they feel about annual reviews—specifically whether they find them to be accurate and enjoyable. The results show that the annual review reveals—even exacerbates, underlying dissatisfaction with performance management.

Confidence in annual reviews turns out to be low across the board. Overall, nearly half (44 percent) of survey respondents say they do not enjoy receiving performance reviews, and only 43 percent of respondents feel their review is an accurate appraisal of their work.

When we aligned the results against job satisfaction and engagement levels, we find those who are satisfied with their reviews—that is, they enjoy reviews and have faith in their accuracy—are far more likely to report job satisfaction, high levels of engagement and intent to stay at their companies than those who are dissatisfied. (Figure 1 and 2)

Satisfaction with reviews, therefore, is a strong indicator of overall job satisfaction and intent to stay. When they are dissatisfied with reviews, a full 72 percent of employees reveal themselves to be passive candidates (who will consider a job offer that is made to them). However, of employees who are satisfied with their reviews, only 55 percent are flight risks. (Figure 3)

Digging further, we asked respondents the top reasons for their dissatisfaction with reviews. Predictably, inaccuracy topped the list. “Not a true indicator of performance” was number one at 63 percent, followed by issues with “a single point of view” at 40 percent. (Figure 4)

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fIGURE 1

EMPlOYEES WHO ARE DISSATISfIED WITH REVIEWS ARE MORE VUlNERABlE TO JOB POAcHING

Q: Would you strongly consider a job offer from another company?

fIGURE 2

EMPlOYEES WHO ARE SATISfIED WITH REVIEWS ARE MORE HIGHlY ENGAGED

fIGURE 3

EMPlOYEES WHO ARE SATISfIED WITH REVIEWS ARE MORE SATISfIED WITH THEIR JOBS

fIGURE 4

TOP 5 REASONS WHY PEOPlE DISlIKE REVIEWS

0% 10% 20% 30% 40% 50% 60% 70% 80%

Feel undervalued 30%

Doesn’t accountfor past work 22%

Demeaning 21%

Not a true indicatorof performance 63%

A single point of view 40%

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Do not think reviewsare accurate

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Think reviewsare accurate

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Satisfied with job

2 / Employees embrace, trust, and are comfortable with crowdsourcing.

Many employers are comparative latecomers to the crowdsourcing movement. While crowdsourced reviews may be a new idea to HR, consumers have been using the wisdom of crowds since the inception of the internet—offering and reading opinions on travel, restaurants, services, and products in order to make better decisions. In fact, 75 percent of employees report regularly giving and reading reviews on consumer crowdsourced sites such as Amazon®, TripAdvisor® and Yelp®. (Figure 5)

Our findings in this report show that not only is crowdsourcing an idea that employees find comfortable and intuitive, they want it included in the performance review cycle.

Interestingly, 80 percent of respondents think the most accurate picture of their performance would come when feedback from their direct supervisor was combined with crowdsourced feedback from others in the organization. (Figure 6) A further 76 percent say that crowdsourced feedback from recognition would be a helpful source of data to improve performance reviews. (Figure 7)

75%

25%

YES

NO

fIGURE 5

75% Of EMPlOYEES AlREADY USE cROWDSOURcING ON cONSUMER SITES

Q: Do you give or read reviews on consumer sites (Amazon, TripAdvisor, Yelp, etc.) before making a purchase decision?

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0%

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Manager feedback plus

crowdsourced input

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fIGURE 6

80% Of EMPlOYEES TRUST cROWDSOURcED REVIEWS TO BE MORE AccURATE

Q: In your opinion, which of the following would provide a more accurate picture of employee performance?

Q: Do you think crowdsourced recognition (relying on input from multiple sources) would be helpful data to incorporate into employee performance reviews?

fIGURE 7

76% Of EMPlOYEES THINK REcOGNITION DATA WOUlD HElP MAKE REVIEWS BETTER

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3 / Employees know the secret to fixing their own reviews.

A lot of effort has been expended in sorting out how to give performance feedback to employees in ways that will most motivate them. So in this survey we decided to ask employees directly how they like to receive feedback, and what they would find most motivating in their own performance management.

The first thing they said they’d like is more peer feedback. Though the employee-manager relationship is arguably the most critical one in any organization, when it comes to reviews, employees overwhelmingly prefer the addition of positive feedback from peers and other managers in their organization. In fact, as noted in Figure 4, 40 percent of employees who dislike reviews cite the single point of view as a key reason for its ineffectiveness.

When we asked employees directly whether they wanted feedback from more than one single manager in their reviews, 84 percent of them said they prefer the addition of feedback from peers and other managers. Many were careful, also, to stipulate that feedback should be voluntary rather than mandatory—73 percent of respondents say they prefer unsolicited input. (Figure 8)

These results support the effectiveness of peer-to-peer feedback in a real-time environment. Respondents who already have peer feedback as part of their performance review cycle report feeling more appreciated (85 percent) and more satisfied with their jobs (88 percent) than respondents who are reviewed only by a single supervisor. (Figures 9 and 10)

In addition to receiving feedback from everyone within the company peers, employees show a strong preference for positive feedback, with 89 percent reporting that they are more motivated by being told what they are doing right versus being told what they are doing wrong. (Figure 11) Employees also prefer to receive feedback right away, with 71 percent of respondents seeking feedback as soon as possible after the event that inspired it. (Figure 12)

Unsolicited peerfeedback is best

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Solicited peer feedback is best

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fIGURE 8

73% Of EMPlOYEES PREfER UNSOlIcITED PEER INPUT

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fIGURE 12

71% Of EMPlOYEES PREfER IMMEDIATE fEEDBAcK

Q: When do you prefer feedback? (Check all that apply)

71%

As soon as possible

Weekly

23%

Quarterly or annually

17%0%

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fIGURE 9

PEER fEEDBAcK MAKES EMPlOYEES fEEl MORE APPREcIATED

fIGURE 10

EMPlOYEES WHO GET PEER fEEDBAcK ARE MORE SATISfIED WITH THEIR JOBS

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Get peer feedback

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fIGURE 11

89% Of EMPlOYEES ARE MOST MOTIVATED BY BEING TOlD WHAT THEY ARE DOING RIGHT

Negative feedback

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Positive feedback

4 / Recognition directly impacts business results.

Recognition is one of the most effective delivery systems for positive feedback in the workplace. The vast majority of employees surveyed (94 percent) like being recognized for their efforts. (Figure 13) But perhaps more interestingly, employees also report that being recognized has created a positive change for them in one or more key performance metrics.

Chief among the metrics impacted by recognition is productivity, say respondents. Fifty-nine percent of those recognized with values-based recognition within the past month report a positive change in their productivity. This is followed by 49 percent who say their relationships were impacted and 43 percent who report that recognition moved the needle on their customer service efforts. (Figure 14)

What might be a bit less obvious is that recognizing others also has a profoundly positive impact on employees. In fact, employees who are enabled to recognize others in their organizations are more than twice as likely to identify themselves as highly engaged. (Figure 15)

The survey also examined the important role recognition plays in reinforcing company values and culture. 82 percent of respondents say they are motivated by recognition. (Figure 16) Employees also consider recognition the best way to align themselves with their culture. Being recognized was the preferred method for aligning workers with company values, followed by enabling them to recognize the behavior of others. Performance reviews (in the traditional way) and direct critical feedback were distant third and fourth choices. (Figure 17)

94%

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fIGURE 13

94% Of EMPlOYEES SAY THEY lIKE GETTING REcOGNIZED fOR AccOMPlISHMENTS AT WORK

Q: Do you like getting recognized for accomplishments at work?

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fIGURE 15

EMPlOYEES WHO REcOGNIZE PEERS ARE MORE lIKElY TO BE HIGHlY ENGAGED

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HighlyEngaged

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Have recognized others in past year

Have not recognized others in past year

Q: Which of the following is most likely to align you with company values and culture? (Check all that apply)

fIGURE 17

REcOGNITION IS MOST lIKElY TO AlIGN WORKERS WITH cOMPANY VAlUES AND cUlTURE

fIGURE 16

82% Of EMPlOYEES SAY THAT GETTING REcOGNIZED fOR EffORTS AT WORK MOTIVATES THEM IN THEIR JOB

Q: Does getting recognized for your efforts and contributions motivate you in your job?

82%

17%

YES

NO

fIGURE 14

VAlUES-BASED REcOGNITION SIGNIfIcANTlY IMPAcTS KEY RESUlTS

Q: Has being recognized created a positive change in your behavior in any of the following?

59%Productivity

49%Relationships

43%Customer Service

32%Discretionary Effort

25%Attendance

21%Safety & Compliance

15%Cost Savings

0% 10% 20% 30% 40% 50% 60%

0% 10% 20% 30% 40% 50%

Recognition when Ido something right 48%

Being able to recognize my peerswhen they do something right 28%

Performance reviews 20%

Criticism when I dosomething wrong 4%

0% 10% 20% 30% 40% 50% 60% 70% 80%

70%How to developand grow

22%Be compliant

8%Correct problems

5 / Companies are already successfully crowdsourcing reviews.

Crowdsourced feedback through social recognition has long been established as a powerful tool for improving culture and motivating employees. Now it is beginning to make strong inroads as a performance management tool, as supervisors leverage recognition data to help assess employee performance.

Seventy-two percent of employees working for companies with recognition tied to company values report that they are already using or would consider using crowdsourced feedback/recognition across the organization. Another 74 percent of those same employees say their company is already using or would consider mapping recognition against performance reviews/rankings.

Employees are acutely aware that a key purpose of performance management is their development, with 70 percent citing “help to develop and grow” as the top reason for annual reviews. (Figure 18) Yet inaccurate reviews often deflate these employees, with 69 percent reporting no motivation to improve.

Enter recognition data, which provides the positive, timely and crowdsourced feedback employees crave (see Findings 2 and 3), and uses it to enhance performance reviews and increase their relevance and accuracy as employee development tools.

fIGURE 18

EMPlOYEES SEE DEVElOPMENT AS TOP GOAl fOR PERfORMANcE MANAGEMENT

Q: In your opinion, what is the most important point of the performance reviews you receive?

fIGURE 19

EMPlOYEES WHO ARE REcOGNIZED ARE MORE lIKElY TO ENJOY REVIEWS

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Recently recognized via strategic recognition

Not recognized recently

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conclUsion In the Summer 2013 Workforce Mood Tracker, we examined the growing intersection between recognition and employee performance. Our goal was to understand not only what is happening, but also to offer a picture of what employees find most rewarding and motivating—and what their vision might be for the ideal annual performance review.

We asked workers to consider their attitudes toward performance reviews, to assess their efficacy, to offer their insight into their future, and to consider the role of recognition in their own performance and job satisfaction. From the 708 respondents, we uncovered the following five findings:

1. Employees feelings about reviews are a good barometer for their overall happiness.

2. Employees are ready for a shift to a more crowdsourced feedback paradigm.

3. Employees have a strong sense of what feedback they respond best to: identifying timely, positive, inspired, and peer-inclusive input as most likely to drive results.

4. The process of recognizing and being recognized has a positive impact on key business results.

5. Companies who are using recognition in performance reviews are already seeing a positive impact in employees’ satisfaction with the review process.

NEXT STEPSLearn more about social recognition and how it can drive business results for you by visiting us at www.globoforce.com, emailing info@globoforce.com or calling 1-888-743-6723.

SURVEY DEMOGRAPHIcS

AGE

18-35 20%

36-45 19%

46-55 34%

56+ 27%

GENDER

Male 25%

female 75%

REGION

Northeast 23%

Midwest 23%

South 29%

West 24%

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© 2013 Globoforce Limited. All rights reserved.

Learn more about social recognition and how it can drive business results for you. CALL US:

+1 888 7-GfORcE

EMAIL US:

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