Motivating and Recognizing More Employees with Less Budget Spend

Julien Dionne recently had a thought-provoking post on the LeapComp blog including the statement: “In a strong economy, one of the major arguments in favor of incentive compensation is employee retention. During a recession, the main argument is to keep employees motivated.”

I would argue keeping employees motivated to produce at their highest level of effort — be fully engaged employees, if you will — should be a priority in any economy, strong or slow. Company leaders always need employees delivering their best effort, particularly when that effort is fully aligned with company goals, objectives and values as well. A recession only amplifies the need as leaders now need to overcome employee fear, anger and resentment in addition to the rumor mill to get that best level of effort.

Strategic employee recognition programs are a key tool to ensure employee effort is maximized, aligned with company objectives, and reflective of company values. These programs of course are useful for sales incentive and similar initiatives, but strategic recognition is far more effective when applied to the entire employee population. All employees need recognition for their efforts and validation that their work is appreciated — now more than ever. If those recognitions are tied to a company value demonstrated or strategic objective achieved (or contributed to), then employees begin to see how their individual efforts contribute to company success. This is by far the most positive and effective way of encouraging repetition of precisely those actions company leaders need from every employee to succeed in this recession.

Another important point for companies who may have recognition initiatives in place, but no true knowledge of what is happening for recognition in every office, every division and even at every manager’s desk. Most companies, especially large global organizations — have multiple, disparate and largely untracked recognition efforts in place. Simply by consolidating all of these programs into one consistent, governable and compliant program, companies can save up to 50% of their current investment in recognition.

Before cutting programs, company leaders should audit what they already have in place and find efficiencies through consolidation. We’ve done this multiple times for clients, saving them 50-70% of their pre-existing investment in recognition while also helping them recognize far more employees for no extra budget spend. Just one example is highlighted in this webinar.

What’s the status of your recognition efforts? What are you doing to ensure employees are motivated, engaged and productive in ways that matter to achieving your company objectives. Tell me about it in comments.

Applying the 5 Tenets of Strategic Employee Recognition in a Recession

It’s been interesting to me to see our five tenets of global strategic recognition come up time and again in the news and on HR blog sites as the effects of the recession continue to unfold.

For example, in another Ask Christi article in Incentive Magazine, Christi addresses a reader question on how to justify a strong recognition program in the midst of a recession. Christi hits precisely on two of our tenets with her answer:

Tenet 1: Align with Company Values and Objectives
“Recognition professionals must align their recognition programs to their organization's business goals and initiatives. By doing this, executives will see their objectives being accomplished.”

Tenet 2: Executive Sponsorship with Clearly Defined Goals
“Metrics need to be developed and shared regularly with executives that show the tie of return on investment to specific recognition initiatives. With solid figures in hand showing your recognition programs are meeting business objectives, these programs are less likely to be reduced or eliminated. Executives will see the link between employee satisfaction, customer satisfaction and stockholder value. The most fortunate organizations are those that have managers and executives at all levels who appreciate the value that employee recognition and employee engagement brings to the table.”

Monica Ginsberg in an article on managing global teams in Workforce Management highlighted two more tenets when she emphasizes the importance of keeping people motivated and recognizing talent worldwide while remaining sensitive to cultural differences.

Tenet 3: A Clear Global Strategy
“Like all things global, cultural preferences vary when it comes to motivating employees. In the U.S., people generally like to be recognized individually for their successes, while Europeans tend to reward teams for a job well done. Working in Germany, Hewitt’s Peterson singled out an employee for praise. ‘It was not welcome,’ she says. But she finds her recruiting team in India responds well to a combination of both styles. She uses regular monthly conference calls to praise the group and encourages individuals to share best practices.”

Tenet 4: Power of Individual Choice
“Managing employees who work in the same office is challenging enough. But in today’s global economy, it’s often necessary to work with and for people thousands of miles away. So how can an executive keep a global workforce motivated and avoid slipping up at the same time. … Jill Smart, chief human resources officer at Accenture, says that ‘managing with awareness’ generates good will.”

And a Society for Human Resource Management (SHRM) article on the importance of peer-to-peer recognition hit our last tenet perfectly. Our CEO, Eric Mosley is quoted in that article on the importance of recognition in a recession:

Tenet 5: Opportunity for All to Participate
“During times of crises and uncertainty, recognition, appreciation and support for friends and colleagues increases dramatically and unlocks something inside us that wants to give and be thankful for each other. Globoforce reported record levels of peer-to-peer employee awards issued in the Fortune 500 companies that use Globoforce recognition programs during the worst part of the downturn in Q4 2008. Caring and concerned people turned to their company's peer-to-peer recognition program as a way to make a connection and appreciate someone around them for their efforts.”

We’ve established these five tenets – our best practice recommendations – based on our work with some the world’s largest and most diverse global organizations. It’s exciting to see the proof of these tenets playing out in these third party sources as well.

What are your best practices for strategic recognition? Share them in comments.

Motivating Employees When Merit Increases Are Cut

In this economy, many companies are trying anything to cut costs before turning to layoffs. We’re seeing variable pay and incentives components put under increasing budget pressure. Indeed, for many companies it may be a no-bonus year. And for other companies, even merit increases are under pressure with plans for small merit increases, no merit increases, pay freezes, and even reductions in pay.

Jeffrey Pfeffer, Organizational Behavior Professor at Stanford’s Graduate School of Business, was recently quoted in Workforce Management saying:
“Typical pay increases are not enough to motivate employees, but they are enough to irritate them. … Even when companies create seemingly significant pay differentiation between low and high performers, the actual cash increase is insufficient to sustain performance – or it drives the wrong behaviors. … Effective management is a system, not a pay plan. The mistake is that companies try to solve all their problems with pay.”

In this recession, HR and company leaders need to urgently rescue employee morale and productivity. This rescue is necessary due to the cutting of awards, incentives and bonuses that leaves a gap with nothing meeting the higher-tier needs (not nice to haves) in Maslow’s Hierarchy. In a recession, this gap is filled with Fear, Uncertainty, Panic, and Mental Paralysis. This is precisely where a recognition program can help you come to the rescue of employees’ psychic income needs among all of the pressures on core compensation.

And the returns for such an investment in recognition are proven. McKinsey published a study last year showing a $1,000 payment had a 10 times higher return on investment when it was given as recognition than when it was given as an increase in base pay. So that’s a 10 times higher return on investment through a recognition program. There was also another study by a UK firm, White Water Strategies, who found the impact of a 1% pay increase could be gained simply as the result of frequent appreciation.

Moreover, a meritocracy-based performance and reward culture is enhanced through such strategic recognition. Our client Biogen Idec, for example, sees recognition as a vital part of the company’s culture of meritocracy. Company leadership wanted a recognition program that would allow anyone to show colleagues appreciation for their contribution and hard work, believing such an effort would motivate employees to deliver the same kind of desired results on an ongoing basis for the benefit of colleagues, patients and shareholders. Globoforce delivered this with the Applause program.

One thing that should be clarified (and resolves many of the problems of linking reward to performance) is the "currency" used for reward. By their very nature, cash recognition (or bonuses) are a problem as cash quickly becomes an entitlement and is easily confused with (or subsumed by) compensation. If the goal is to recognize above and beyond efforts of employees then recognition with a different “currency” than the cash used in compensation must be applied. That’s where strategic recognition comes in — giving a different currency for recognition with clearly defined and oft-repeated reasons deserving of recognition — to ensure employees know when they are being PAID vs. being REWARDED.

Strategic recognition accomplishes these additional critical goals not fully possible through compensation:
• Telling employees how their efforts matter – how they are not just working for the company, but with it.
• Encouraging cooperation and teamwork
• Encouraging people to notice and acknowledge stellar efforts of their peers
• Offering a “360° review” performance mechanism
• Offering a means for constant feedback throughout the year
• Making the rate of reward equivalent to rate of effort, employee by employee

What’s the status of merit increases in your organization? Are you going forward? Limiting them? Eliminating them? What’s the reaction of employees? How are you counteracting any potential negative effects? Share your thoughts in comments.

Are You Creating a Culture of Entitlement and Competition?

In an earlier post this week, I talked about a major problem with cash bonuses - they are often used to fulfill the wrong needs. In this post, I’ll cover two additional serious problems with using a cash-based award structure – entitlement and competition.

Entitlement – Bloomberg News recently reported the results of a survey showing, “More Wall Street employees received bonuses for 2008 than were expecting to, though many remained unhappy with them.” This screams of the entitlement attitude that soon follows when one comes to expect a bonus as part of a basic compensation package. As the survey author says, “What this shows is the bonus culture is very deep set in the securities industry. There’s an entitlement culture amongst a number of people in the industry, which I think in the current industry is very misplaced.”

I think many average workers would put that far more strongly. “Main Street” workers would likely say they are equally entitled to their hard-earned retirement funds, to their taxpayer dollars going to rebuild roads and schools instead of a corporate bailout, to retaining their jobs.

Unfortunately, that entitlement has been removed from them by those very Wall Street employees who are “not happy” with the bonuses they received for one of the worst market failures in history. There can be no sounder reason not to use cash-based bonuses as rewards.

Competition — The inventor of the Internet firewall, David Pensak, credits cash bonuses as killing the innovative spirit of employees (and thus companies’ competitive edge). David says in a recent article:
“Most people in corporations don't know when they're doing well. The only feedback [employees] get is cash bonuses. Cash bonuses help employees pay for things they have already bought. The money is immediately forgotten by the recipients, but not by their colleagues. Word spreads. One would ask, ‘I got only $500. Shouldn't I have gotten $1,500?’ When you need teams, this makes employees into competitors and undermines teamwork.”

Now more than ever leaders need their employees to pull together as a team. Unfortunately, the recession makes this more difficult as employees are afraid for their own jobs and angry over layoffs. But leaders certainly shouldn’t throw divisive cash bonuses into the mix. Strategic recognition of team efforts that ensures team members, whether located in Miami or Mumbai, receive the same value of award overcomes these competitive issues as well as allowing the recipient to choose a personally meaningful reward from millions of options.

Realize more return for your investment in recognition by kicking cash bonuses to the curb. As I explained extensively in this post, cash rewards also do not deliver the performance boost of non-cash rewards, as proven by numerous studies. Get more for your money while also creating an atmosphere of cooperation and a reason to keep performing at a high level.

Have you seen the fallout form cash rewards in your business? Tell us about it.

What’s All the Recognition Fuss About?

Quite a lot, actually. The news headlines around the world in the last couple of weeks have been nailing bailed-out banks to the wall for trying to continue with traditional employee recognition junkets, senior executive bonuses and other schemes that are ill-conceived in the best of times but in this economy show how truly out of touch these executives have become.

A quick listing of just some of the latest headlines:

• Major U.S. bank Wells Fargo CEO John Stumpf actually took out a full-page advert in several major U.S. newspapers (text available here) to justify its since cancelled Las Vegas junket
• A bank in Wisconsin, USA, planned a trip (since cancelled) for 100 employees to a Puerto Rican resort after receiving half a billion dollar in federal stimulus funds.
• The Royal Bank of Scotland “bowing to government demands” to reduce investment banker bonuses from £1 billion to £175 million and cancel future bonus schemes.

Do hard working, dedicated and productive employees deserve to be recognized for their efforts? Of course, but firms must be more judicious in their use of recognition. Massive junkets offered in the name of recognition, regardless of tradition, are not wise in the current environment and, I would argue, are not wise at any time. For truly effective recognition, employees should be recognized when they do something worthy of recognition, not months later. This is critically important to driving home fundamentals such as company values or strategic objectives that you need to reinforce through recognition of behaviors that reflect those values and objectives. This must be done in the moment for full impact.

And employees should be given a choice of how they want to be rewarded for that recognition. Public acknowledgment is anathema to some, desired by others. Some may prefer to choose a vacation with family over a glorified business trip with colleagues. Others may not choose travel at all. My point is, to be meaningful, recognition should be personal.

And in regards to bonuses for bankers and financiers who oversaw mass failure in 2008, I like how John Hollon, editor at Workforce Management, put it:
"Regular Americans believe that Wall Street bankers are largely responsible for the financial mess the country is in right now. Whether that perception is right or wrong, Stumpf and his CEO friends need to buck up, shut up and be more sensitive to how their business practices might be perceived by the folks on Main Street. This is hardly the time to defend business as usual, no matter how legitimate it might ultimately be."

Let’s look at a couple of examples of those who got it right.

First, there’s the Miami banker that gave $60 million of his own money to his employees and even former employees. “After selling a majority stake in Miami-based City National Bancshares last November, all [Leonard Abess Jr.] did was take $60 million of the proceeds -- $60 million out of his own pocket -- and hand it to his tellers, bookkeepers, clerks, everyone on the payroll. All 399 workers on the staff received bonuses, and he even tracked down 72 former employees so they could share in the windfall.”

While I typically advocate against cash-based bonuses, this is entirely different. This is a man who looked at the profits of his business and realized he could have never realized that value without the effort of all his employees. This is more a profit-sharing plan, albeit a surprise, than a cash bonus. And it’s that surprise factor – a reward in recognition of years of dedication, loyalty and hard work – that sets this story of banking bonuses far apart from those I discussed above and elsewhere.

And second, there’s our client, Nortel Networks, who fought in bankruptcy court to keep its strategic recognition program for its employees. As reported in the Globe and Mail:
“The company has asked for court permission to keep the recognition program, known as Excellence@Nortel. In court filings, Nortel argues that these programs are critical to boosting morale and making sure its 26,000 employees don't spend their time looking for work elsewhere. Nortel and its subsidiaries ‘believe that in this difficult time it is essential that they be permitted to continue their practice of providing limited awards in recognition of the exceptional and outstanding work of their employees,’ the company said in a filing in the Delaware bankruptcy court last week.”

Employee recognition has proven to be so strategic to Nortel, it is specifically requesting funding to continue the program. This shows beyond a doubt Nortel understands it can recover under bankruptcy protection and emerge to again lead its industry, but it cannot do so without the commitment and hard work of its employees. This is also true for many companies struggling in today’s tough economy.

Our CEO at Globoforce, Eric Mosley, recently wrote an article in Chief Executive magazine that concluded with this observation and challenge:
“In today’s challenging economy, companies are looking for new and creative ways to enhance performance within the organization. Realizing employee engagement through strategic recognition efforts holds the potential to be the next significant ROI opportunity. These programs empower companies to create a unified, global workforce, aligning employees from multiple generations and multiple cultures around the very essence of the company, its core goals and values. What was once relegated to a tactical task that usually sat at the bottom of a priority list now sits squarely on the desk of the CEO. Are you ready to heed the call?”

I ask you, the readers of this blog – are you ready? Are you ready to get recognition right? What steps are you taking to keeping your employees engaged, motivated, and focused on your critical tasks? Join the discussion.

Don’t Waste Your Time or Money on Unwanted Employee Rewards

If you’ve been reading my blog for any length of time, you know how important I believe frequent, timely and appropriate recognition of employee efforts is to increasing employee engagement, morale and productivity. However, these two examples I recently came across strike me as demotivators, time wasters and a complete drain on productivity.

First, a writer into the Ask Christi column in Incentive Magazine, authored by Christi Gibson of Recognition Professionals International, asked Christi’s opinion of the CEO’s idea of the “ultimate recognition” – the opportunity to present an efficiency improvement idea to the Board of Directors. Apparently, every employee must do this at least once year – a tremendous cause for anxiety among most employees.

While I certainly agree with Christi that this is no way to recognize employees, let’s look a little deeper. The letter writer comments the employee next on the dock “frets for days” about the meeting. Think what that must do to the productivity of that employee as they worry about what to present, how it will be perceived, even what to wear. Carry that a step further to that employee’s teammates and friends in the office. Surely this person is worrying aloud with these people, expanding the web of lost productivity even wider. And every employee is subjected to this every year?

Let’s step outside this particular example for a minute and consider a common form of recognition in many offices – the public presentation or acknowledgment of effort in a team meeting or similar. While many may relish this public recognition, I know many who do not like to be “put in the spotlight.” Many a well-meaning manager has actually damaged their relationship with an employee, and even hurt that employee’s desire to perform well enough to end up with a public recognition moment again – a clearly negative impact on productivity.

Strategic recognition requires those giving recognition to understand intimately what employees want for recognition, how they want to be acknowledged and then honor those wishes. Globoforce’s consultative approach walks our clients through consideration of these important issues to determine and implement multiple ways to acknowledge deserving employees in ways that caters to all personality types.

This second example left me dumbfounded. There is now a company whose idea of recognition is to let employees play games online during work. Apparently, employees earn playing time on random “point-yielding” games and then those points are redeemable on a debit card.

I’m simply floored by this. If the idea is to reward desired behavior, why would you want to do that with an activity that, by definition, reduces employee productivity, and then give them a “reward” that can be easily spent on necessities such as gas or groceries? As I’ve repeatedly blogged before, such cash-based rewards have no lasting or memorable psychic income value to recipients.

A far better solution is to immediately reward desired behaviors through a strategic program that tells employees precisely why that behavior or action was demonstrative of a company value or goal achieved and then to let the employee pick from millions of rewards of choice that will serve as a lasting reminder of the company’s appreciation for and investment in the employee.

Now is not the time or the economy to be playing games. Employee recognition can deliver significant bottom-line returns, but only if deployed strategically.

What are some of the worst recognition ideas you’ve heard or experienced? Share your stories in comments or, better yet, visit our new Facebook fan page and tell us your worst recognition stories in the discussion boards.

Have You Been Wasting Your Money on Cash Rewards?

Yes, budgets are slashed to the bone for many companies. And the US and UK news is thick with headlines on the misappropriation of bailout funds to pay billions of dollars in bonuses to banking and financial institution executives.

Lori Kletzer in a New York Times blog on Bonuses v. Bailout summarized some of my thinking on this topic saying, “The point of employee bonuses is to tie compensation to results. … Hence, workers get bonuses in good times, and get their ‘guaranteed’ salary in bad times. … But shouldn’t those workers get appropriately sized salaries without depending on bonuses?”

Precisely. From all I’ve been reading, a fundamental problem with the bonus culture on Wall Street is the morphing of the ratio of base salary to bonus in the last few decades. Employees are paid at a very low, relatively, base compensation rate, work the expected 70-100 hour weeks, and expect to see the compensation for those efforts in the annual bonus. This is completely out of whack.

Base pay should be equal to compensating for the expected workload, whether that is the standard 40-hour week or the ridiculous 100 hour week. Bonus should be just that – above and beyond compensation for those who go above and beyond their colleagues in effort. When nearly every employee receives significant bonuses, this differentiation is clearly lost.

In terms of Maslow’s Hierarchy of Needs and how Total Rewards aligns with it, base compensation is used to fulfill physiological needs (hunger, thirst) and safety needs (home, security, protection). Variable pay and bonuses then begin to address the higher order social needs with true non-cash, strategic recognition addressing the highest needs for self esteem and self actualization.

In the Financial Times, Lucy Kellaway recently addressed the need to help employees recover that sense of belonging, self esteem and self actualization at the top of Maslow’s pyramid of needs when companies are cutting the budgets that would typically address those areas. Lucy said:
“The easiest and cheapest way of cheering up demoralised workers is to tell them that they are doing a great job. It is one of the great mysteries of office life why most managers are so resistant to this when it does not cost one penny. Here is all they have to do: pick people off one by one (to do it in groups is lazy and quite spoils the impact) and say thank you and well done, and look as if they mean it.”

Individual, personal and meaningful appreciation – it’s amazing how far it will go.

What’s your take on the bonus culture? What would you do to fix it? What compensation and recognition changes are you seeing in your company? Tell me about it in comments.

Making the Most of Your Employee Recognition Investment

Terry Weaver, CEO of Chief Executive Boards International and author of the Chief Executive Boards blog recently wrote about his surprise at How Much Employee Motivation You Can Buy for $10.
“I had an extended conversation about employee recognition with two Gen-X'ers and learned something that totally amazed me. Both of these people have MBA's from prestigious schools and work in large NYSE companies at great salaries. Both have traveled and lived internationally.

“And both were talking about their respective companies' practice of handing out small-denomination gift cards to employees as part of their "spot" recognition programs. In these cases, "small" is REALLY small -- $5, $10 and $15 dollar gift cards -- amounts that could get lost in the roundoff error of their respective W-2's.

“I apologized in advance, and asked "Would someone who came in on a Saturday to get an important project done by Monday actually be happy with a $10 bonus?" "You mean they're not offended by such a trivial amount?"

“Well, I learned, there's something wildly different about a $10 gift card and a $10 bill. I still don't know exactly what. Perhaps it's the "indulgence" element. The hottest gift cards going are Starbucks and I-Tunes, plus, believe it or not, Target. Somehow spending $5 apiece for two coffees feels great if it's the shareholders who are buying. One of these people had received a $50 gift card for something a bit more meaningful, and used it at Target to buy Christmas decorations -- something she might have been too frugal to spend "real" money on.”

What Terry discovered is particularly important for CEOs everywhere to understand – tremendous value can be gained from a relatively small investment in strategic recognition. One simple way to make your investment in your employees go farther today, especially in this recessionary economy, is to give employees frequent, appropriate and timely recognition for performance, personal achievement and team successes.

Our clients have saved millions by eliminating or dramatically reducing cash rewards in favor of gift cards, which is a far more effective reward. This is because cash-based recognition programs do not maintain program consistency on a global scale and do not ensure local participants feel motivated and involved in the organization. Additionally, people become habituated to cash no matter how much you give them, viewing it as an entitlement – a problem now making headlines worldwide with bonuses paid out to Wall Street executives who have taken US government rescue funds.

The small amount of rewards Terry highlights is also critical as it allows for more frequent recognition. Frequent recognition of small amounts does far more good in boosting morale, and reinforcing desired actions than a yearly bonus. Taking this a step further, if each recognition is specifically tied to a company value demonstrated or strategic objective achieved (or contributed to), company leaders can begin to track which values and objectives are less understood by every employee and how those values and objectives apply to his or her specific job. Executives can use the recognition program as lagging indicators to target these areas of low recognition for additional training or reinforcement.

Globoforce’s strategic recognition programs save money by reducing manual intervention and eliminating the paper chase while also creating a positive work environment where employees see that best practices, strong ethics and exceptional performance are recognized and rewarded consistently, openly and fairly – an environment that encourages loyalty, commitment and honesty of effort.

What are your recognition methods? How has the recession impacted those efforts? What’s been the ultimate impact on your employees of your program modifications? Tell me about it in comments.

What Are Your Recession Resolutions for Employee Engagement?

CC Holland recently wrote in Bnet of "4 Recession Resolutions for Leaders" originally espoused by Jack and Suzy Welch.

1. Stay on the offensive.
2. Pledge to support and enforce integrity.
3. Address the Employee Free Choice Act. (a loosening of requirements to establish a union in U.S. workforces)
4. Finally, remember to celebrate.

I see many ways strategic employee recognition reinforces or addresses this four critical issues brought up by the Welchs.

1) Stay on the offensive -- Yes, employees are afraid, angry, resentful and distracted by rumors due to the recession. Strategic recognition reaffirms employees in the value of their contributions, acknowledges the additional work and effort they are being asked to perform, and allays rumors.

2) Pledge to support and enforce integrity -- Making integrity a reason for recognition in a strategic program gives employees and managers the ability to acknowledge and appreciate that aspect in their colleagues. Executives can also track areas where integrity may not be recognized at all or very infrequently and target that group or division for specific intervention.

3) Address the Employee Free Choice Act -- Employees who are well cared for and appreciated by their company, even in a recession, will generally act in the best interest of the company. By using strategic recognition principles to frequently recognize and encourage team members in a stressful time, company leaders communicate clearly their commitment to the well-being and future of the employees.

4) Remember to celebrate
– Jack Welch, former CEO of GE commented on this topic specifically: “(T)his year — because of its severe challenges — is sure to be filled with remarkable small victories and heroic efforts. What a lost opportunity to build morale it would be, then, not to recognize and reward the people who are overdelivering.”

Of course heroic efforts should be recognized as well as those "people who are overdelivering" as the Welch's say. However, Jack Welch also said in Winning: "But everyone in the middle 70% needs to be motivated and made to feel as if they truly belong."

In this recession when companies need to the most productivity out of all employees, then encouraging, motivating, appreciating and recognizing ALL employees for their sincere, diligent efforts that support the company goals and values is critical.

What are your recession resolutions? What would you add to this list? Be sure to take our weekly poll.

Manage Costs of Employee Recognition in 2009

Research firm Watson Wyatt recently released “Ten Principles for Managing Employee Reward in 2009.” While I don’t agree with all elements of the list, I do strongly agree with a comment by Carole Hathaway, head of strategic reward consulting at Watson Wyatt: "Stressed organisations could be in danger of making employee reward decisions that they come to regret if they abandon too readily the principles that underpin their people strategies."

A couple of points I would like to highlight from the list follow.
Don't abandon bonuses: Don't abandon performance pay and bonuses but instead target them on your top performers and refocus them on realistic but stretching targets that will promote the right behaviours in this new environment.”

I’ve blogged in detail on this topic of what do when bonuses disappear. Essentially, employers must consider how they will address the higher order needs of employees for recognition and esteem as described in Maslow’s Hierarchy of Needs when the past method of bonuses are no longer an option. As I’ve said, a strategic recognition program helps overcome the gap created by the elimination of bonuses. During these recessionary times, employees are full of fear and uncertainty. Strategic recognition bridges the no-bonus gap by feeding your employees’ needs for psychic income -- social acceptance, increased self-esteem and self realization that can never be met through compensation.

To “promote the right behaviors in this new environment,” wise leaders rely on frequent and timely recognition, not bonuses. Recognition gives you the flexibility to specifically call out a desired behavior soon after the event to reinforce the need for repetition of that behavior.
Don't damage your employer brand: Don't harm your employer brand by not delivering on your employee value proposition the moment things get tough. Live it through tough times and you will maintain an engaged and productive workforce.”

Maintaining your company culture is essential during this recession so employees can rest confident in the knowledge that they and their efforts are important, needed, and appreciated. If you’ve succeeded in creating a culture of appreciation, it is now more important than ever to maintain that culture. Cost savings can be found through program consolidation and more efficient use of resources, but showing appreciation for hard effort to deliver against company strategic goals and resiliency in this time is critical to riding out the recession to a position of competitive advantage.

How is your employer brand withstanding the recession? Are you seeing any changes to how employees perceive you as a company? What are the potential impacts to you of those changes when the economy does turn? Join the conversation in comments.

Globoforce Podcasts on Employee Recognition & Engagement Now Available!

I’m thrilled to announce Globoforce now has podcasts available to make it more convenient to lean about the value of strategic recognition programs in this recession.

Two are currently available on our website with more to come regularly:

In “The Competitive Advantage of Strategic Employee Recognition during a Recession” I discuss the impact the declining state of the global economy, layoffs, bankruptcies, foreclosures and the credit crunch are having on employees and how strategic employee recognition can boost morale, increase productivity, and save your company money by eliminating the waste common in tactical, ad-hoc recognition initiatives many companies have in place today.

In “Great Expectations: Building the Employee Recognition Program Your CEO Wants” I highlight the results of a recent survey we recently conducted with middle- and senior-level HR and HR-related personnel about CEO perceptions of recognition programs as they relate to corporate objectives within their organization. I also offer best practices based on our work with some of the world’s largest organizations for improving existing recognition efforts.

Stay tuned for more podcasts! I’ll post here when new downloads are available.

Tell me what you think of these podcasts in comments. Also, let me know any topics you’d like to have me cover in future podcasts.

Recognition for Offline Employees with Fairmont Hotels & Resorts

Kyla Deveraux, manager of learning and development at Fairmont Hotels & Resorts, joined me last week for a webinar: “Turn Moments into Memories with Strategic Recognition.”

Built on Fairmont’s mission to turn moments into memories for their guests and on the company’s brand promise and values, the Serviceplus employee recognition program acknowledges employee behavior that delivers on these goals. Kyla discusses in the webinar how Fairmont uses Serviceplus to “turn moments into memories” for their colleagues who go above and beyond.

Since the majority of Fairmont’s employees are offline, Kyla also shows unique aspects of their program to address the needs of offline workers as well as continually communicate the program appropriately to all employees.

Serviceplus has been a resounding success for Fairmont, who has seen significant improvement in the recognition factor on the company’s employee engagement survey since launch of Serviceplus more than two years ago. As Kyla says, “Serviceplus is not an incentive, but a means to celebrate in a way that enhances our culture.”

I also discuss in the webinar the urgent need for HR to rescue employee morale and productivity in this recession and how strategic recognition programs can help.

I encourage you to download the webinar to learn more. Then tell me what you think in comments.

Are You Wasting Your Investment in Employee Recognition: Part 2?

Early last week, Globoforce released the results of a survey showing, in part, HR leaders feel their programs fall short in driving bottom-line results. A staggering 42% of all organizations surveyed are not measuring their program’s results in any way, leaving CEOs in the dark on the effectiveness and true value of their recognition programs and effectively wasting the money invested.

Late last week, the Chartered Institute of Personnel and Development (CIPD) issued similar findings in its Annual Reward Management Survey:

• 46% of employers were not aware of total remuneration spend (benefits, base pay, variable pay and insurance)
• An astonishing 68% of organizations do not assess the impact of their reward practices
• Of those that do measure remuneration spend, 83% cannot break it down into categories of salary, variable pay and benefits.

Charles Cotton, reward advisor at the CIPD, had this to say:
“If organisations do not have a complete handle on where their staff spending goes, it makes it far more difficult to prioritise investment in the measures that will retain and motivate talented individuals. Reward, if implemented correctly, can engage staff at a time when pay freezes and redundancies are prevalent, boosting the chances of the organisations coming out of the recession in good shape to benefit from the recovery."

A hallmark of strategic recognition is saving organizations money by carefully targeting the funds invested in recognition to boost morale and productivity. How important is this? Accountemps, a US recruiting firm, recently conducted a survey of senior executives, finding “failure to recognize employee achievements” ranked second only to communication as the thing that had the most negative impact on employee morale. Similarly, senior executives recognized recognition as a best remedy for low morale, again second only to communication.

What this all tells me is senior executives acknowledge the importance of recognition to boost morale and performance. Yet they are also unaware of their investment in the means to recognize employees and have no measurement or proof of success of those investments against goals.

Now is not the time for companies to spend good money after bad on investments they are not even fully aware of. To realize the full return on your investment in recognition, you must have a program that aligns with and reinforces your corporate goals and objectives, reports on progress against predetermined metrics, and meets employee needs for recognition of their efforts in this stressed time.

Are you investing in recognition programs today? What is your current level of investment? Are you seeing the return you need? Tell us in our weekly poll.