What’s the Future of HR Post Recession?

In the wake of governance issues, executive compensation blow-back, so-called “recognition junkets” and other negative news, HR cannot remain functionally the same as the market and economy recover.

I see HR changing fundamentally at both the executive and employee level in these ways:

Executive Level

• HR will have a seat at the executive table, possibly as a CEO of a Fortune 100 company. If not in the chief executive seat, then definitely as a chief officer whose opinion is valued and desired.

• HR will take a more prominent role in corporate governance, possible as a chief integrity officer, enforcing the exercise of proper control over compensation and bonus packages and use of corporate funds in other appropriate ways.

• HR will become a trusted coach to senior executives – perhaps the sole voice willing to tell the CEO when he’s going in the wrong direction.

Employee Level

• HR will drive the effort for global team building and collaboration, ensuring unique cultural differences are honored and respected.

• HR will take full ownership of directing talent organization and distribution to create high performance workforces for strategic success.

• HR will adjust to generational change requirements as Generation Y becomes ever more prominent (e.g., changing annual performance review to ongoing feedback format with 360 degree elements).

Difficult times are often the seeding bed for innovation and positive change – the explosion of the PC in the early 1980s, the explosion of the internet in the mid 1990s. I believe this recession will weed out the bad habits, complacency and ignorance that has kept HR from achieving its true purpose in guiding and directing a company in the most powerful way – directly through its people.

Am I off base? Do you see these changes on the horizon as well? Other changes I’m missing? Tell me in comments.

Research Roundup: What the Experts Say about Gaining Competitive Advantage in a Recession

The recognition management industry analysts around the world have been burning the midnight oil on this topic of competitive advantage in a recession.

Quantum Workplace, the research firm behind the US Best Places to Work contests, issued this report on Beating the Bear Market with Engaged Employees, with key items that were responsible for a disproportionate share of the variation among winners and losers, including these two factors:

“Setting a clear, compelling direction that empowers each employee: Our studies tell us that in the best of times employees are more highly engaged when they see where the company is going and understand their roles in helping the company go there. This is largely a function of senior leaders and line managers clearly and frequently communicating where the company is headed and how each person makes a contribution. In more difficult times, this charge becomes even more important.

“Recognizing and rewarding high performance: Now more than ever employers need to actively seek opportunities to reward employees who are making outstanding contributions to the success of the enterprise. Non-monetary recognition can go a long way to helping employees feel appreciated. You can be sure that employees are carefully watching the actions of leadership regarding recognition.”

The Chartered Institute of Personnel and Development (CIPD) out of the UK recently put Employee Engagement in Context, finding:

“Engagement is about creating opportunities for employees to connect with their colleagues, managers and wider organisation. It is also about creating an environment where employees are motivated to want to connect with their work and really care about doing a good job. ... Common themes in organisations where engagement is high:
• fair and consistent HR practices, such as rewards and appraisals
• core focus on traditional management practices such as clarity of objectives, clear performance measurement and trust
• showing employees that they are valued through well-designed and consistent involvement initiatives,
• having a friendly and supportive work environment can give employees the confidence to become engaged in their work.”

Mercer’s head of Executive Remuneration Business in Asia, Wei Zhang, offered this perspective:

“The environment is very uncertain, so we need to step back and re-examine the key talent we need to retain. That talent can go anywhere it wants. … For starters, they should make sure the rewards are aligned with a significant focus on performance. Further, there should be a specific performance that you want. Also, communication is very important — people have to know what is expected of them and what they can expect. There is a strong linkage between the two. … I would think that companies in this particular environment should take a holistic view to examine their overall rewards approach on both monetary and non-monetary payments.”

Hewitt’s Best Employers in Canada study found:

“Highly-engaged employees speak positively of their employer, want to remain with the organization, and are willing to do all they can to help achieve corporate success.”

Elsewhere in British news, a government-funded review of employee engagement is underway to examine how to improve the quality of work. According to David MacLeod, a non-executive director of the Ministry of justice, “The fact that only about 12% of the UK workforce can be considered as highly engaged shows that there is potential for huge gains for the economy if we can improve in this area.” (Review results are expected in the Spring; I’ll keep you posted on findings.)

A clear theme through all of these research reports is the need for clear communication and recognition. Both efforts are strengthened when used together with recognition as a tool for greater communication on key objectives and then using appropriate communication mechanisms to reinforce the value you place in your employees as evidenced through recognition.

The two cannot and should not be separated. Are you using recognition and communication strategically? Share your techniques in comments.

Communicate & Recognize to Engage Employees

If you’ve been following my blog for the last couple of weeks or so, you may have noticed “communicate and recognize” have cropped up repeatedly as tips for boosting employee morale, increasing engagement and productivity, and gaining competitive advantage. It’s not just me. The same two recommendations are popping up in outlets across North America and the UK.

From the Los Angeles Times (California, USA):

“Set goals based on the new economic reality and share them with your staff. Talk to your employees every day, even if it's just to say hello and thank them for working hard. Recognition from leaders will make all the difference in your company morale. All you need to stay viable is to gain an edge: You don't have to outrun the economy, you just have to outrun your competition."

From the Calgary Herald (Alberta, Canada):

"The best strategy is to develop the employees they have to meet current and future needs so they can respond quickly to changing market demands and remain competitive. Businesses that invest in employees and have high employee engagement have a competitive advantage in their ability to make it through a recession. A leader's ability to communicate effectively is critical so that employees don't get sidetracked with assumptions and speculation.”

From the Kansas City Star (Missouri, USA):

“Companies that kept employees energized despite these troubled times:
* Set clear directions for personal success and let each employee know how he or she figured into the plan for the organization.
* Had open and honest communication about the company’s financial situation and the steps needed to get out of the woods.
* Recognized and rewarded individual high performance and made good performers feel valued.”

From the Financial Times (London, UK):

“There are two routes you can go down to win your employees’ goodwill. You can splurge cash on them, as Wells Fargo, the rescued US bank, proposed to do, by taking colleagues on “employee recognition outings” to fancy hotels in Las Vegas. This idea has now been dropped. Or you could try telling the unvarnished truth.”

Well, the Financial Times got it partially correct. “Splurging them with cash” is one way of recognizing employees, if a completely wrong way. Yes, share the unvarnished truth about the situation, but also share your appreciation for them and their efforts. People need and want both -- clear communication AND praise. The latter does not have to cost thousands or millions, but it does have to be sincere, direct, frequent and soon after the event deserving of recognition for there to be any lasting impact. If you're trying to encourage employees to repeat specific behaviors or actions that will help your company achieve its strategic objectives during this recession, then be sure to loudly and opportunistically recognize them for precisely those behaviors.

Are you communicating and recognizing? Are you using recognition as a powerful tool for communicating critical messages, and then measuring their reach and impact? Be sure to take our weekly poll.

Symantec * Making the Business Case for Employee Recognition in a Recession

Earlier this month, Symantec’s Senior Director of Global Compensation, Jennifer Reimert, joined me for a webinar on the business case for strategic recognition in a recession. I encourage you to watch the webinar and learn how Symantec went from determining business requirements for the program to go-live globally in just three months and quantifiable culture change in just six months!

Why is strategic employee recognition important? As Jennifer said: “Employee loyalty drives customer loyalty, which drives revenue – making recognition a business proposition at Symantec.”

Jennifer gives a detailed explanation of how Symantec measured employee satisfaction and quantified program success, and some additional highlights from the webinar follow.

Symantec’s goals for strategic employee recognition included:
• One platform, one brand, one executive dashboard
• Simple, global recognition to support and promote company values and desired behaviors
• Consistent and timely recognition with no additional burden on HR, managers or employees

Key rules for the program include:
• Make all employees eligible – anyone can nominate anyone else for an award
• Empower people to recognize a manager or members of a cross-functional team
• Simplify approvals with two award options with no approvals required and the remaining four awards with only one level of approval.

Major wins Jennifer highlighted in the webinar include:
• Enormous recognition reach with high frequency/low cost awards globally
• People can and do brag about their recognition and share their stories
• A guilt-free reward experience for recipients
• Cost-neutral program with far more reach and accountability
• Corporate governance over recognition investment everywhere in the world

Watch the webinar, then tell me in comments what your goals for strategic employee recognition would be.

Competitive Advantage in a Recession * Thoughts from Watson Wyatt

In this recession, are you holding on by your fingernails or are you trying to grow your market share and increase your competitive advantage? I started to talk about this last week in connection with retention. This week, I’ll examine the connection between competitive advantage and employee engagement more deeply.

Watson Wyatt’s 2008/2009 Work USA Report really dug into this, finding:

“When employees are highly engaged, their companies enjoy 26 percent higher employee productivity, have lower turnover risk and are more likely to attract top talent. Their companies have also earned 13 percent greater total returns to shareholders over the last five years.

“According to the survey findings, highly engaged employees are twice as likely as their less engaged peers to be top performers. They also miss 20 percent fewer days of work and three-quarters of them exceed or far exceed expectations in their most recent performance review. Additionally, highly engaged workers tend to be more supportive of organizational change initiatives and resilient in the face of change.”

Three strong take-aways from the Watson Wyatt research are:

1) Communicate New Directions – The research reiterates our best practice recommendation to clearly communicate changed strategic objectives or company plans and “directly connect employees to the purpose of the organization.” We’ve found the best way to accomplish both is through a strategic recognition program that ties frequent and timely employee recognition directly to strategic objectives and company values. In this way you not only communicate strategic objectives to employees, but you show them how their specific actions help accomplish those objectives.

2) Recognize and Reward Equitably – “Employees who indicate their organization effectively delivers on the employment deal are 20 times as likely to be highly engaged and 50 percent more likely to be top performers.” Your employees know you could not meet your goals without them and their efforts. Acknowledge that simple fact. Tell them “thank you.” Reward them appropriately, even in lean times. As long as awards are equitable across recipients, reduced values will be accepted.

3) Include the Middle Tier – Another Globoforce best practice is to offer all the opportunity to participate. Watson Wyatt calls this “investing in the core” (60% of the typical workforce). Why is this important? I can’t put it better than Watson Wyatt’s researchers: “Highly engaged employees are already working at or near their peak but are often limited by their less engaged co-workers. Focusing on engaging core contributors can improve both groups' productivity.

Have your strategic objectives changed due to the recession? How are you communicating those changes? Are you confident all employees “get it” and are working together as productively as possible to achieve them? What are you doing proactively to encourage that? Do you agree with Watson Wyatt’s findings? Join the conversation in comments.

Are You Taking Your Employees for Granted?

A common theme running through media reports, blog posts, industry research and even my interactions with companies evaluating strategic recognition programs is the tendency to take employees for granted during a recession. Of course, such an attitude also leads to retention and engagement issues as well.

A survey by Robert Half International is particularly telling. Senior executives were asked why top-performing employees left with unhappiness with management being the top reason at 35%, limited opportunities for advancement as second and lack of recognition as third. This is close to separate survey results I cited in a post earlier this week.

Do you want to retain or even increase your competitive advantage? Then you must not take your employees for granted. Here are three ways to show your employees you appreciate them and their efforts.

1. Demonstrably value your employees – Show them you know what their strengths are. Put them in roles or give them assignments that let them flex their muscles. Give them opportunities in your strategically important functions. Then don’t forget to tell them why you are doing this – because you recognize their talents and need their contributions to succeed.
   
   
2. Communicate and recognize – Be accessible, address concerns openly, and recognize effort frequently and appropriately. There is much fodder for the rumor mill in most organizations today. Pre-empt the rumors by giving regular status updates. Say thank you. Let people know their efforts are valid, worthy, noticed and above all, appreciated. More on this common theme next week.
   
   
3. Prevent poaching of top talent – Companies that manage to get the above points right stand a better chance of retaining their top talent. Or put another way, keep their competitors from poaching their top performers. The entire state of California is facing a retention challenge of mega proportions as surrounding states aggressively campaign to poach individual talent and even entire companies. Keep your competitors away from what makes you better than the rest – your people.
   

Don’t just take my word for it. See what Towers Perrin’s engagement gurus had to say on the topic here and here.

Are you taking your employees for granted? If not, what are you doing to show your employees you don’t take them for granted and keep them from being poached by the competition? Tell me in comments.

"In Good Company" * The Mark of an Engaging Workplace

I arrived in Boston last weekend to spend some time in our Massachusetts office and happened to catch this episode (video embedded below - email subscribers, click through for viewing) on CBS Sunday Morning -- “In Good Company: Imagine Coming to Work at a Company Where Trust, Collaboration, and Communication Are Equally as Valued as the Bottom Line.”


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Based on the latest Fortune magazine Best Companies to Work For list, the show focused on W.L. Gore and Associates (makers of GoreTex fabric and numerous other manufactured goods) and NetApp (No. 1 on the Best Companies’ list).

The reporter, Rita Braver, calls out the marks of a good place to work throughout the story, highlighting:

* People want to come to work everyday.
* The company cares about its people.
* People are friendly with each other.
* Having fun and a life outside of work is encouraged.

I encourage you to watch this brief six minute clip as the two CEOs strongly endorse, support and foster cultures of appreciation in their organizations. Just look at this one quote from NetApp CEO Dan Warmenhoven:

“When someone is motivated, when they’re engaged, they’ll do five times as much. When they understand where the company is going and they feel good about it, magic happens.”

Terri Kelly, CEO of W.L. Gore (No. 15 on the list), agrees with the sentiment, but also recognizes “Having a strong culture for culture’s sake will not ensure success. We need to create products customers value as well.”

Watch the video and tell me what you think. Do you believe, as I do, that companies must continue to invest in their people in this way to not only survive the recession, but to come out on top of their markets? Or do you believe it’s throwing money away in a down economy? Tell me in comments.

Wrecking Recognition * Tell Us Your Stories

On his Employee Engagement Zingers blog, David Zinger posted today on "Wrecked Recognition," encouraging folks to enter our contest for the worst stories of employee recognition gone wrong.

David shared some of his favorite stories of wrecked recognition:

Instilling disengagement. Perhaps you were given a hat and you hate wearing hats or you got a company pen that leaked all over your purse. Perhaps you were given a box of donuts and you were dieting. The wrong type of recognition does not foster employee engagement, it instills disengagement.

How long can you last? Years ago most recognition events seemed focused on how long you worked there. It seemed if you had been there 30 years the organization would finally recognize you.

Public recognition or humiliation. At one organization I worked with, they called in the work crews to publicly acknowledge them and it was painful. These guys would have preferred never to be singled out in front of their peers and asked to come up to receive a plague and a gift. If the workplace really saw these gentleman they would have done it quietly in the lunch room or run it out to them where they were driving heavy equipment. I believe some of the men experienced the recognition as humiliation or punishment not as reinforcement for good work. We must recognize the impact or our recognition.

Dying for recognition. One organization somehow failed to recognize that someone had died and the person who had died two weeks earlier was called up to receive their award.

What about you? Tell us your stories, and enter to win $500, $200, or $100. Contest ends March 31, so submit now!

The Link between Retention, Employee Engagement and Recognition

As I’ve been digging into this issue of retention in recession, I’ve been particularly struck by the strong bond between retention, employee engagement and recognition. I’m seeing the same results reported in news sources in both the US and UK press.

This article called the TUC (Trade Unions Congress) in the UK to task for missing the point of workers putting in unpaid overtime. Bridget Biggar, managing director of Management Intelligence Consulting, had this to say in HR Magazine:

"Many employees work longer hours because they are playing to their strengths in a job which they enjoy, which is highly motivating and personally rewarding. Engaged employees offer discretionary time without it being a quid pro quo because they feel greater loyalty to the company and ownership of their responsibilities to deliver.

"If somebody is enjoying their role, are stimulated and energised by the stretch of the challenge that uses their personal skills and strengths, they will work longer hours without even realising -and certainly not begrudge it.”

Aside from that last paragraph being one of the best definitions of employee engagement I’ve seen, Bridget summarizes well the importance of having the right person, in the right job with the right attitude. If you let people work in roles designed to their skills and talents, they will perform better and with greater effort.

In this recession, we are seeing many employees taking on the tasks of laid off co-workers, essentially doing double duty in multiple roles. While employees taking on more work may be necessary, managers must be diligent in working to ensure tasks are apportioned in line with individual employee preferences and skills. After layoffs, employee engagement levels typically drop. Keep them from dropping further by ensuring people are doing tasks they enjoy doing.

In other news, AchieveGlobal recently reported the results of a study showing 23% of US workers expect to leave their current positions – a shockingly high number considering many short-sighted managers think their employees will just sit tight out of recession fears. AchieveGlobal CEO Sharon Daniels had this to say:

"Attrition among high-performing employees is largely catalyzed by insufficient compensation, lack of growth opportunities, and employee contributions not being recognized. The effects of high performers vacating job positions can ripple throughout many levels of a company, resulting in low employee morale or deteriorating quality of products or services. While overall turnover rates may decrease in the current economy, keeping top performers will still be a competitive advantage. It’s understood that compensation benefits are not always feasible with smaller budgets, but human resources can focus on other talent management aspects, such as ensuring employee recognition, having career development strategies, and allowing flexibility for a healthy work-life balance."

Insufficient compensation may be difficult to address in today’s economy. Growth opportunities may not be any easier, but managers should certainly clearly communicate opportunities that will come available when the market turns. Recognition of contributions, however, is easily addressed.

What are you doing to retain your top performing employees? How are you recognizing their contributions? A simple thank you? Meaningful acknowledgement of how their efforts are helping the company survive during this recession? Other means? If not, you are missing out on an easy opportunity to increase employee engagement, retain needed staff and, indeed, impact the bottom line. Be sure to take our weekly poll on strategies for recognition.

Why Should You Care about Retention in a Recession?

Are you adapting your HR strategy and approach to the changing needs dictated by the recession? I was somewhat surprised to see these recent findings:

“A survey of 336 senior HR practitioners by consultancy TalentDrain found just a third (31%) were adapting their approach and putting a renewed focus on existing employees. Organisations which had changed their HR strategy were concentrating efforts on existing staff, with 72% giving increased priority to organisational management, 67% to communication, and 54% to employee engagement and retention.”

However, it is encouraging to see that those organizations that do understand the need for change are focusing on the critical areas of communication, engagement and retention in such high numbers.

Salary.com reported even higher numbers with 63% of employees admitting to looking for a new job. Bosses have little concept of this, believing only 41% are looking.

Why is retention so important in a recession? Three reasons:

1) Keep your top players engaged in your organization and focused on your priorities (and, of course, away from your competitors)

2) Engage your middle tier of employees to create networks of success – foster teamwork up and down the chain. After all, your top performers can’t deliver the results you need in a vacuum.

3) Ensure you are staffed appropriately for when the upturn comes.

Appropriate staffing is a delicate balance, expressed best by Fred Crandall of Watson Wyatt Worldwide: “The biggest issue our clients face right now is regaining momentum when business picks up, while having to hire the fewest number of new people.”

The company best poised to take advantage of the eventual upturn is the one that does not have to seek out new talent, train them, incorporate them into the company culture, steep them in the strategic priorities, and only then begin to see results. This ties into the point I made last week about the fallacy of across-the-board, indiscriminate layoffs. A recent article in the Boston Globe highlighted this point well:

“Make cuts and freezes based solely on employee performance and future opportunities. While this approach is logical and appears obvious, too many organizations take the misguided approach of spreading the pain around the organization, "to be fair" (i.e. 10% layoff for each division, one person cut per manager, company wide hiring freeze, etc.). Think about the company that instituted a company-wide hiring freeze so that all managers felt treated the same: if one division is shrinking and one is growing, it does not make sense to treat these divisions the same; yet this is the approach many companies take.”

Where does retention rank in level of importance for you or your organization now? What are you doing to ensure your top performers stay, your middle tier are engaged and working well as team, and your staffing levels are appropriate for today and when the upturn comes? Share your techniques in comments.

The Layoff Exodus Conundrum & Investing Now

Companies may get more than they bargained for with layoffs, losing far more employees than planned in addition to the accompanying morale and productivity issues common with the psychological after-effects of layoffs. The Academy of Management Journal published the results of a very interesting study on layoffs and exodus that often follows:

“Downsizing can set off an exodus among retained employees that in some cases is much greater than the reduction achieved through the layoffs.

"’The downsizing-turnover relationship suggests a sad irony in that employees are laid off by companies that may subsequently find themselves understaffed,’ write the study's authors, Charlie O. Trevor and Anthony J. Nyberg of the University of Wisconsin - Madison. ‘Moreover, to the extent that turnover rates hinder organizational performance, the performance of downsizing companies may well suffer further through the leaving behavior that the layoffs generate.’

"Perhaps the most striking finding in this study of quitting rates in some 200 companies was the considerable exodus that even a small downsizing could set off. For example, companies that laid off a mere 0.5% of their workforce sustained, on average, a turnover rate of 13%, a rate that was 2.6 percentage points higher than the average turnover rate of non-downsizing firms. In other words, an extra 2.6% of the workforce left of their own accord, more than five times more workers than were laid off. … The amount of quitting in all these instances substantially exceeds the average 10.4% turnover rate for companies that do not impose layoffs.”

So what should leaders do? Well, Intel’s recently retired CEO Craig Barrett is encouraging investment. In fact, in this Newsweek article, several chief officers are advocating caution in layoffs and continued investment in their people. See these telling statements:

Craig Barrett, Intel
“But companies that cut back on research and new product development do so at their peril. In the high-tech marketplace, for instance, companies that cut deep into R&D will probably fall behind competitors who continue to invest. You cannot save your way out of a recession, you can only invest your way out. … CEOs must screw up their courage and invest through the downturn. It's time for long-term thinking in an environment that has too often been dominated by quarterly statements.”

Jim O’Neill, Goldman Sachs
“If the slump turns out to be severe but only short-term, companies that reduce inventory and cut back staff too aggressively will suddenly have to restock and rehire just as aggressively.”

Diane Swonk, Mesirow Financial
“So many CEOs are so focused on defense that they may be missing real opportunities. If you only play defense, you will not be on the right side as the economy bottoms, let alone turns. For us, for instance, there was an opportunity to attract talent and clients as our Wall Street counterparts imploded. The new blood is helping to buoy profits today and will put us in a whole new position on the other side of the crisis.”

Next week I intend to examine this issue of retention in recession more deeply. Some assume erroneously that retention is not currently a problem for senior executives. Quite the contrary, retention of key talent is always an issue and even more so in this recession.

In the meantime, if you’ve had to conduct layoffs, are you seeing the “exodus effect?” What are you doing to counteract it? Are you continuing to invest? Tell me about it in comments.

Tell Me * How Is the Recession Changing YOUR Company?

During the last few months in this blog, I’ve examined the impact of the recession on employees, managers, and industry at large. I’ve commented on the seemingly vast research on this topic and on news reports surrounding the recession and the impact to workplace morale and productivity. Of course, I’ve also illustrated the power of recognition to overcome or address many of these challenges.

Now it’s your turn.

How is the recession affecting your organization’s benefits and compensation programs? Are your current programs under close scrutiny to find extraneous costs to trim? Is your company cutting or increasing budgets for your HR programs and benefits? Has your company been forced to consider layoffs? How have these cuts or layoffs affected the overall morale of the company?

Tell us what you think in our latest market research survey. We would like your views on the adjustments your organization may be making to core compensation options including recognition in an effort to streamline expenses and stay competitive. To see how your organization ranks against others in your industry, take our Managing Expectations Survey now.

This short survey will take only five minutes to complete. In return you will receive a complimentary copy of the “Managing Expectations: HR’s Adjustments during the Recession & Employee Opinion on its Effects” white paper. If you are one of the first 100 respondents to complete this survey, you will also receive a $10 gift card redeemable at Barnes & Noble, Starbucks or Amazon.com.

Our previous market research studies are also available on our website. There you can download “Engaging the Global Workforce: Bridging the Gap between Finance and Talent Management” or “Great Expectations: Building the Employee Recognition Program Your CEO Wants.”

Thank you for your participation. Let your voice be heard!

Counteract the Negative Impact of Layoffs

After seeing the tremendous number of layoffs in January and February, I was struck by the many reports showing the negative impact layoffs have, not just on employees and morale, but on actual company financial performance. Just look at this one example cited recently in Bnet:

“One of the most documented issues is that mass layoffs often leave companies worse off financially than they were. For example, between the summers of 2000 and 2001, Bain & Company studied layoffs at S&P 500 companies. A bulk came from the tech sector, with telecom, computers, semiconductor equipment, office electronics, and electronics accounting for at least 44 percent of the layoffs. The findings ran counter to what many executives believe:

• Just over 25 percent of the companies announced layoffs — certainly a significant portion, but far from a universal reaction.
• The best performing stocks were for companies that did the fewest layoffs. Companies that laid off between 3 and 10 percent of employees had, on average, flat share prices. Those that laid off more than 10 percent saw shares drop by 38 percent.
• Adjusted for sales growth rates, companies that don’t downsize outperformed those that did.
• Unless positions can be eliminated for long enough — at least six to 12 months, and possibly as long as 18 months for knowledge-based businesses — there is no financial payback to the company because it typically has to hire replacement workers as conditions are getting better.

“[The Bain Report concluded]: ‘Big job cuts can also affect the employees who stay. Declining morale means lower productivity — many will spend time looking for new jobs. Employees will tend to be less innovative, and less willing to take bold steps to solve problems.’”

The Globe and Mail (access requires subscription) also wrote on “workers worrying about cuts…to almost everything that makes them feel valued and enables them to do their jobs with a degree of satisfaction and a measure of accomplishment.” This article made three excellent observations:

“You heighten stress and undermine performance when you tell people they are lucky to be employed.”

“You can’t get blood from a stone. And if you treat people like disposable units of productivity, you will generate even more cynicism and erode any existing shred of loyalty.”

“Understand worker psychology. In tough times, people want to be comforted, not terrified. They also want to feel part of something bigger than themselves.”

Reduce stress and increase performance by telling people you appreciate them and their efforts.

Reduce cynicism and increase loyalty by fostering a company culture employees want to be a part of, contribute to and help ensure stays around

Communicate clearly the needs of your company (your strategic objectives) and, more importantly, show employees how their individual, specific efforts and tasks help the company achieve those objectives. Do so in the most positive way possible – with strategic recognition. Let them be a visible, knowledgeable part of your efforts to retain your competitive advantage and market share.

What about you? What are your suggestions? Be sure to take our weekly poll.

Layoffs, Pay Freezes, Pay Cuts, Furloughs * What to Do to Keep Your Best Workers

I can’t seem to read any news outlet now without seeing multiple stories about cutting costs, especially managing employee costs. It seems companies are trying anything to avoid layoffs – furloughs, pay freezes, even pay cuts (which, according to this New Yorker article, just results in adverse selection where your best workers start looking for another job while your least productive hunker down and settle in.)

In this recent Forbes article, Dr. John Sullivan, a workforce planner, discussed why layoffs and their alternatives are nearly always done incorrectly. Three key points from the article leapt out at me:

1) These Actions Encourage Top Performers to Leave.

“If you go for voluntary early retirements or buyouts, you're letting your workers decide who stays and who leaves. Top performers will always feel confident they can find a job elsewhere, while poor employees won't. So the good employees will be the ones to exit. You're paying them to walk out the door. … And don't forget how layoffs can feed talent to the competition, especially if the competition is creative and aggressive about it. …”

Your best people will always have options. If you do not offer them a culture they want to be a part of - a culture of appreciation that shows how individual efforts support company objectives - they will leave. If not now, then when the economy turns.

2) Be Careful to Not Devalue Corporate Culture.

“The corporate culture should be a major consideration in workforce planning, according to Steve Miranda. He's the strategic planning officer for the Society for Human Resource Management. Companies that have a history of weathering tough times should stick to their own track records. Consistency matters. …”

Most of your top talent understand the need for some cutbacks and even layoffs due to the recession. It is how you treat your employees before, during and after those actions that will have the most impact on their attitudes now and in the future. They may forgive you for necessary layoffs, but they may not forgive lack of appreciation for their extra effort after such actions. Make sure they know you value them and their efforts and the company culture itself is solid, positive, and appreciative - even during this recession.

3) Across-the-Board Actions Indiscriminately Punish Your Best.

“Whatever you choose to do, layoffs or their alternatives, you need to do it more carefully than is common. Across-the-board anything is a bad idea. It shuts down innovative and reliable producers, indiscriminately punishes top performers and cuts back in areas that could help keep the company profitable.”

The same is true for indiscriminate cutting of recognition efforts. Perks, which have no intrinsic value and no proof of lasting value, can be cut with no consequence, at least to your top performers. But strategic recognition that encourages repetition of actions and behaviors that help achieve company objectives and reflect company values cannot be so indiscriminately cut. You need your performers (at all levels) delivering the right results at a high level of productivity. Encouraging them in those efforts and praising them for success is necessary for all employees.

What actions have you taken? What are the lessons learned? Are you holding on at all costs? Join the discussion in comments.

Let Globoforce Give You the Recognition You Deserve (and never got)

I’ve asked periodically in this blog to hear your “stupid recognition” stories – stories of recognition gone seriously wrong through a muffed recognition moment, a ridiculous or inappropriate reward, or even no recognition at all for a momentous contribution. Some of the stories have been outrageous, some funny, some sad (and some are posted on our Facebook Fan page).

Now’s your chance to get the recognition you deserve. Miffed about that mug you got after 10 years of hard work (and no other recognition)? Annoyed by the lazy, lying co-worker who got praise while you were ignored for saving the company millions? Want to tell the world about it (and earn a reward you REALLY want)?

Starting today, so-called Employee Appreciation Day, through Tuesday, 31 March, send us your stories of “recognition gone wrong in the workplace.” We’ll right the wrongs of bad recognition by picking the top three most horrible stories, suggesting how the recognition should have been handled for a positive memorable experience, and giving those winners the reward they deserve.

What are the rewards? Globoforce GloboCertificates that the winners can use to select their Reward of Choice from more than 2,000 retailers around the world.

* First Place – $500 GloboCertificate
* Second Place – $250 GloboCertificate
* Third Place – $100 GloboCertificate

And now for The Rules:

• Send us your story be email (contest@globoforce.com) or fax (+1 508 357 8964), including your full name, mailing address, date of birth (no contestants under 18 years of age), telephone number and email address.
• Keep your story to 250 words or less.
• Do not name or include disparaging remarks about the employer or manager specifically.
• Only one submission per person.
• No Globoforce employees can participate.
• Agree your submissions can be publicized on the Globoforce website, Globoblog, and Facebook Fan page.
• Winning entries will be chosen by 15 April 2009, and winners will be notified by 17 April 2009.
• Read the official contest rules for complete guidelines. Note that by entering this contest, contestants agree to these Official Rules in full.

If you’re under 18 years of age or have multiple stories you’d like to get off your chest, share them on our Facebook Fan page or in comments.!

Get Every Employee Working on Your Strategic Objectives

How well is your organization performing against strategic objectives? Have those objectives changed since the recession kicked into high gear? Can your employees articulate those objectives? Do they have any idea how their daily work impacts the achievement of those objectives?

In my experience, very few line employees can even cite the company’s objectives, much less articulate how their work helps in achieving them. But it has never been more urgent for every employee to understand precisely this connection. As I recently said in an HRO Today article on Boosting Engagement in Difficult Economic Times:

“Forward-thinking organizations should refocus, inspire, and encourage their workforces through cost-effective strategic recognition. These programs must go far beyond annual cash bonuses or performance increases to include frequent, ongoing rewards given throughout the year for a job well done. During a down economy when companies need employees to give more discretionary effort to achieve critical objectives, strategic recognition specifically rewards actions and behaviors that align with company values and help to achieve those objectives, encouraging employees to repeat precisely those behaviors needed for the organization to succeed. Rewards can also be given peer to peer so that everyone can share in the process of noticing, celebrating, and encouraging good work.”

Hewitt Associates’ Scott Cohen agreed in last month’s Human Resources Executive:

“Rewards are often clear in many caring professions, where professionals see the results of their work. But rewards can be harder to distinguish in large organizations unless management focuses on communicating goals and showing employees how their work adds value, both to the company and to others' lives.

"Make sure everybody understands, especially in the challenging times we're in right now, the direction that [the company is] taking. There's a difference between the value statement from the plaque on the wall versus translating that to the employee level and what that means to you.”

Suzanne Bates, author of the new book Motivate Like a CEO: Communicate Your Strategic Vision and Inspire People to Act, truly gets it as well. Her suggestions to praise and recognize your people while communicating constantly and consistently are central to motivation in this economy. As she has said:

“Managers and executives must find non-monetary ways to keep their teams motivated, and to inspire them to achieve goals and objectives with fewer people and less funding. This makes it even more important for leaders to be out in front of employees as much as possible, continually communicating and making personal connections with them.”

What are you communicating most consistently with your employees? What you need them to do to make the company successful or what you don’t need them to do with no bigger picture connotation? How are you communicating that – positively or negatively? How successful are your efforts? And back to my original questions -- Can your employees articulate those objectives? Do they have any idea how their daily work impacts the achievement of those objectives? Be sure to take our weekly quiz on this and share your observations in comments.

Globoforce/Symantec Webinar & Recognition Podcasts

This Thursday I’m hosting a webinar with Jennifer Reimert, senior director of global compensation at Symantec, discussing how and why Symantec overhauled their legacy recognition program to improve processes, save money, involve more participants and change their very business culture to achieve better results. Offered in conjunction with HR.com, the “Delivering a 21st Century Recognition Program during a Down Economy” webinar will also address the importance of recognition during this recession and how to measure and report on the ROI.

Join Jennifer and me on 5 March (Thursday) at 11:00 Eastern time by registering here.

Also, just a reminder that Globoforce is now offering podcasts on hot topics including recognition, motivation, morale and productivity to make it easier for you to follow these conversations in your busy schedule. The Globoforce Podcast Series are available for free download via subscription.

I hope you will join Symantec and me for our webinar this Thursday, 5 March, at 11:00 Eastern. I also look forward to receiving your feedback on our podcasts and suggestions for future topics. Help make sure we stay on top of our recognition game – tell me what other resources you need to make the case for strategic recognition in a recession.

Staying Aware of Employee Needs in a Recession

March is supposedly Employee Appreciation Month, with emphasis placed on March 7 as Employee Appreciation Day. More of my thoughts on the travesty of limiting employee appreciation to a single day in an upcoming post, but in honor of Employee Appreciation Month, I’ll be blogging throughout March about the employee devastation that’s been happening across companies and industries around the world. I also plan to hit on what you can do about it through consistent communication and recognition to regain competitive advantage and employee engagement, even during this worsening recession.

With the pressures mounting on managers from all directions, it becomes harder to notice the good but so much easier to punish the bad. Conversely, because of increased pressure, employees need to know their efforts are appreciated all the more, especially if you want them to keep delivering at a high level of performance. Stephen Friedman recently wrote on this topic of catching your staff doing something good in the Financial Post:

“When asked to provide feedback about their manager, employees often say they can do a hundred things well and hear very little from their boss. But when they mess up, they certainly hear about it. On the other hand, managers don't focus their effort or attention on what employees do well, largely because they believe success requires no action on their part, but mistakes do. This is itself a mistake. Recognition is a fundamental part of employee satisfaction, and it is associated with high performance. Any praise or recognition acts to reinforce success, increasing the likelihood it will be repeated. It can also bring about a much needed balance in the energy expended in the workplace. The concept is quite simple - be as outwardly happy when things go well as you are angry, annoyed and disappointed when things go poorly.”

This approach of consistency in demonstration of emotion, praise and criticism contributes significantly to the culture of your company. In his most recent book, The Outliers, Malcolm Gladwell examines the impact of our cultural experiences and differences on influencing our tolerance for the behavior of others and how much we value and respect authority and hierarchy. What kind of culture are your creating within your organization or team and how is it impacting these same areas – which are all critical to company success?

In the same vein, when recognizing employees for their efforts, you must consider the larger culture in which you are rewarding. Individual praise is welcome in the US, but less so in cultures more focused on the team and community, such as in Japan. To paraphrase Gladwell, an employee’s actions are not based on his or her personality and initiative alone, but also on the “tendencies and assumptions and reflexes handed down” in the community in which the employee grew up. These cultural legacies matter and powerfully persist “long after their usefulness has passed.”

How aware are you of the needs of your team members? Of your peers? Are you feeding those needs in a culturally appropriate way? Or are you contributing to the lowering of individual performance by ignoring or thwarting their needs or, worse yet, trying to address needs in a thoroughly inappropriate way? Has this happened to you? Join the conversation in comments and share your story of recognition gone wrong on our Facebook Fan page.