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.

1 comment(s):

At February 09, 2009 2:16 PM, C. Tetley said...

Cost should be considered part of development because of the front line opportunity to create new products or services. Because front line team membera are the closest to customers, they know what works and what does not. If we survey them more often and offer empowerment employees we can save thousands, reducing consultant fees for suggestions. The best R&D is one that combines front line mind power within our own companies with market research. Employee recognition is more important during a recession than any other time.