Webinar * Expert Roundtable: HR as Catalyst for Positive Change in a Recession

I’m thrilled to be hosting a round-table webinar with some of the sharpest experts in the employee engagement, compensation and human capital management field.

On Thursday, 14 May, I will be leading “Ask the Experts: Using Recognition, Compensation and Human Capital Management as a Catalyst for Positive Change in a Recession” with:

* Jon Ingham, expert in Human Capital and Talent Management and author of the Strategic HCM blog and the book Strategic Human Capital Management: Creating Value through People. Jon helps businesses that already have sound approaches to people management gain further improvements in the capabilities and engagement of their people, and the effectiveness of their organisations. He also speaks, leads workshops and lectures on strategic management, change management and human resources as part of executive MBA programmes.

* Ann Bares, expert in Compensation and Total Rewards and author of the Compensation Force blog. Ann is the Managing Partner of Altura Consulting Group. She has more than 20 years of experience consulting with organizations in the areas of compensation and performance management.

This webinar will address will also feature a unique Question and Answer opportunity that will allow you to address any pressing concerns directly to the experts. You will be able to submit these questions before the webinar, or anytime throughout the presentation. You can also submit questions via comments to this blog entry or via my “Ask Derek” section at the bottom of my blog (email subscribers, click through for access).

Join us at 8:30am Pacific/11:30am Eastern/4:30pm GMT on 14 May. You can register here.

BusinessWeek, Gucci & Insight into Employee Engagement

In this excellent BusinessWeek article on employee engagement in a recession, Robert Polet, CEO of Gucci, made the statement:
"Employees need to understand both current and long-term direction, as well their role in it, to remain motivated and engaged."
I couldn't resist commenting to the article:
"In fact, this is a best practice we encourage through strategic recognition - tie every employee recognition directly to a strategic goal contributed to, or company value demonstrated. In this way, employees begin to understand how they, in their specific function, are contributing to the company's success. And since you are educating in this way positively - by saying thank you - employees want to repeat those behaviors you most need to succeed. Much more on this topic here."
Apparently, BusinessWeek thought it was a worthwhile comment as they picked it up to feature on the homepage today and for the long-term here.

The employee engagement conversation has never been more important or more dynamic. Join in via comments!

Recognition Gone Wrong * There’s Nobody Here but Me

Continuing the announcements our prize winners in the Recognition Gone Wrong contest, here’s our second place finisher with her story of wrecked recognition:
“I work for freight forwarder for the past 15 years. When I took over, there were Cargo Correction Advices (CCAs) dating back to 10 years ago. It was so out of control and no one was addressing it, so I took it upon myself to sit down with the carriers and laid down some rules of timely submissions. In the end I was able to have them waive 80% of the total CCAs still open, thus saving the company thousands of dollars. The remaining 20% we were able to work out a plan to split the difference, thus saving the company some more dollars.

To this day, my manager never acknowledged what I did. Today, I am still handling the same things, rate changes, surcharges that the carriers impose that up and down with different rates and dates of affectivity. I am on top of everything and to this date, there is no open weight or rate discrepancies. I tackle these issues right on as no one will.

When my manager has visitors from the carriers, he never brings them to the staff to introduce them. It is like we are nobody. Especially on Carrier parties, he never extends the invitation to us. I think it is important that immediate managers recognize that it is not only him but me and all the staff that work with him and for him that make him and the company successful. Making us feel that we matter is key to trust and loyalty.”
Notice in this story, the person isn’t asking for anything more than simple acknowledgment. And therein lies a powerful lesson for all managers. Often, people only want to know that you see them, you see what they do and you appreciate it. It’s like the Zulu greeting for hello, literally, “I see you.”

How could this recognition have been made right?
* First, the manager should thank the person for their efforts to save the company what seems to be significant money while instituting a simple process to ensure that money is not wasted. Praise them for taking on a task no one else seems to want to do.
* Second, the manager should be sure his manager also knows of this significant achievement. Passing praise up the chain is equally important.<
* Third, involve caring and committed employees such as this person in the activities of the company, especially those that impact on or are a result of their work. Clearly, the manager should introduce the employee to the people she works with.
* Finally, this employee is obviously a hard worker. But the company could benefit even more from her work if she were deeply engaged. Such praise, acknowledgment and inclusion could significantly raise her engagement levels.

What else would you do to make it right? Tell me in comments.

"Motivating without Money" * See Us in BusinessWeek

In the last several months, I’ve spoken with the leaders of quite a few organizations who realize the importance of implementing an Employee Stimulus Package to keep employees motivated, producing against needed objectives, and committed to the future of the company.

A recent article in Business Week, Motivating without Money, illustrates this approach well.
“These days, with layoffs rampant and companies slashing budgets across the board to weather the economic downturn, motivating employees to bring their "A" game to the office every day is harder than ever. According to a survey of nearly 80,000 employees by the Corporate Executive Board, one in every five employees now consider themselves disengaged from their job, compared with one out of ten last summer. What's more, two out of three companies surveyed in late 2008 by market research firm Quantum Workplace had lower overall employee engagement scores compared with a year earlier.

“Small gestures can go a long way during difficult times, so many firms have recently turned to an Irish outfit called Globoforce, which designs corporate recognition programs for clients like Intuit, Procter & Gamble (PG), and Dow Chemical. Globoforce's programs allow employees to choose a reward they want rather than co-workers or managers making the choice for them. A music lover in accounts receivable, for example, might choose tickets to a concert, while a foodie in sales might choose a $50 gift card to Whole Foods. Such freedom of choice can be much more effective than the scattershot, ad hoc recognition (think: pizza parties) that normally takes place in corporations.

“Such programs are more valuable than ever in a recession, according to a study conducted last fall by Towers Perrin that polled more than 10,000 respondents in 13 countries. (Globoforce, whose U.S. headquarters is in Boston, has closed several deals in the first quarter of 2009.) Nearly half (49%) of U.S. companies have recognition programs, according to a May 2008, study from Watson Wyatt. But those programs only target 10% of employees in the U.S., compared with 36% at European firms, the survey found, so there's an opportunity to enlarge their scope and effectiveness.”

Do you have an effective, strategic employee recognition program
in place? If so, are you optimizing the scope and effectiveness to reach all employees in every location globally?

Recognition Gone Wrong * What’s Your Name Again?

The results of our “Recognition Gone Wrong” contest are in! I’ll be blogging this week on our first, second and third place “winners” and offering comments on how the recognition moment could have gone right.

Without further ado, here’s the story of wrecked recognition from our third-place winner:
“While working for a former employer, I won a Sales Manager of the Year Award. Out of the entire company’s sales force, approximately 130 individual managers & directors, I had the highest sales and several other major achievements that year. At the award ceremony, our company President announced the award and called me to the stage, as follows: “…and the winner is…ohhh...it’s Mr. Bill (no last name…as in Mr. Bill the Saturday Night Live cartoon character)” and he presented me with a logo windshirt and a plaque made of brass, faux wood, and felt. My last name was not spelled correctly on the plaque. I went to hang the plaque and the frame fell apart at the corners. The next year, the recipient of the same award but with lower total sales volume received $2,500 in cash, an extra week’s vacation, a trip, and a logo windshirt.”
Ouch. Let’s count the ways that went wrong:
1) Didn’t actually recognize the person as the wrong name was announced
2) Insulted the person by spelling their name incorrectly
3) Didn’t seek to know enough about the person to learn what would really be motivating and a sign of true appreciation to them

So what should have happened?
* First, be sure the recipient even wants public acknowledgement. To some, this is actually demotivating.
* Second, get the person’s name right! Two seconds of copy editing can save years of hurt.
* Third, present a reward the recipient cares about. Better yet, let him choose a personal, meaningful and relevant reward for himself from millions of options.
* Finally, make sure awards for the same achievements are fair and equitable or you will only foster resentment.

What else would you have done to make this recognition gone wrong go right? Tell me in comments.

Employee Recognition * Who Do You Involve?

If you’re intent on creating a successful employee recognition program, then who do you need to involve in the program? The answer is simple – everyone – during the planning of the program and in the program itself.

As Deborah Hildebrand said in The Best Way to Reward Employees:
“Allow employees to participate on the front-end development of the program and the associated rewards. Once the program is ready for implementation, communicate the details to all employees. Involving employees from the start creates buy-in and empowers employees with a sense of control, making it more likely that they will respond positively.”

We strongly recommend companies create a task force representative of employees from all levels across all geographic regions and divisions to ensure every voice is heard. Once the program is launched, you again want to involve 80-90% of employees so you can measure and effect culture change based on what matters to you most – seeing how your employees demonstrate your company values and achieve strategic objectives.

The research supporting this is clear:
• “Invest in the core. The key to driving productivity gains is increasing engagement among core contributors, who represent 60 percent of the typical workforce. 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.” – Watson Wyatt Worldwide, 2008/2009 WorkUSA Report

• “The middle 70 percent are managed differently. This group of people is enormously valuable to any company; you simply cannot function without their skills, energy, and commitment. After all, they are the majority of your employees. But everyone in the middle 70 needs to be motivated, and made to feel as if they truly belong. You do not want to lose the vast majority of your middle 70 – you want to improve them.” – Jack Welch, Winning

Who are you involving in your recognition efforts? Is your program truly strategic, or simply elitist with no true cultural impact? Join the discussion in comments.

What Type of Recognition Do YOU Need?

Have you considered the different forms of employee recognition? I don’t mean incentives vs. rewards, etc. I mean the different types of recognition employees (at all levels) need. Gallup recently released a report on Building Engagement in This Economic Crisis. James K. Harter, Ph.D, Gallup’s chief scientist of workplace management and well-being, put it this way:
"In good times, employee engagement is the difference between being good and being great. In bad times, it's the difference between surviving and not. In good times and bad, low engagement reduces performance and profit. And under the current circumstances, many companies can't afford to let those drop."

So what are these different types of recognition employees need? From Gallup’s “tips to help managers keep employees focused and engaged,” I see five types of recognition:

1) Recognition of effort – what we commonly understand as recognition for employees who go above and beyond expectations.
2) Recognition of skills and talents – noticing what each employee is good at and prefers to do, then giving them the opportunity to do it.
3) Recognition of the need for focus and direction – helping employees overcome the rampant rumors and focus on what you need them to do.
4) Recognition of personal needs – showing your employees you care about their well being by taking the time to understand them and their unique needs.
5) Recognition of the need to grow and develop – understanding employee needs to continue to learn something new and follow a career path in your company.

Engauge, an employee engagement consultancy in the U.K., gives us one more type:

6) Recognition of the need to let off steam – realizing your most engaged employees are also the ones who care the most. When things don’t go as they planned, they need to let off steam and sometimes will do so in an enthusiastic if not politic manner.

What other types of recognition are there? What type of recognition do you need? Be sure to take our weekly poll.

Globoforce in the News * Global Recognition in a Recession

Globoforce and our CEO, Eric Mosley, have been much in the news lately as companies seek ways to motivate employees in this recession.

Just yesterday, The New York Post cited Eric and our client Thompson Reuters in Tools of Engagement: Employers Seek Ways to Motivate Workers Drained by the Downturn:
“Such recognition programs raise morale by simply spreading goodwill from one employee to another, says Eric Mosley, president of Globoforce, which hosts the rewards programs for Thompson Reuters, Procter & Gamble, and a rapidly growing number of others.

“Unlike bonuses and raises, which come once a year and are generally awarded by supervisors, recognition rewards can come at any time and are usually awarded by co-workers. Thomson Reuters has its program set up to reward employees when they go above and beyond the call of duty or model company values, says Robert Talmas, who runs the program. Although his company gave out both raises and bonuses in 2008, it wants employees focused on their work goals rather than all the uncertainty in the air, he says. And the rewards foster direct engagement as well -- winners are handed their recognition certificates by senior managers."

Premium Incentives Products also reported on our advice for creating effective global recognition programs in Charting a Course: Navigate Your Way to Global Employee Engagement.
“Traveling down the road to global program development can be a bumpy, complicated and huge undertaking. That's why many global program experts believe that, first and foremost, the beginning step requires an overall vision: to create a global recognition culture, not just another recognition program or platform.

“Creating such a culture begins with what one recognition expert calls a key best practice: ‘Remembering that people are people, no matter where they are all over the world,’ said Eric Mosley, CEO of Globoforce, a provider of global strategic recognition solutions. ‘Successful global programs start from the premise that a company wants to treat its employees equally and to have one single goal for penetration of recognition around the world,’ he explained. ‘That culture of recognition builds on the traction of an equal number of thank you's and rewards happening in each country—multiplying them—and links them to things that are meaningful to constituents around the world.’

“But that's just the starting point. From here, you need to cater your program to each individual cultural nuance. ‘If you start at this point, the global program issues to be resolved predominantly revolve around understanding the culture of all these different employees, where they live, what's important to them, what would motivate them, and how you interact with them,’ Mosley explained.”

What are you doing to raise morale and productivity among your global teams during this recession? Tell me in comments.

Employee Recognition Best Practices

Last Fall, Ascent Group released their “Reward & Recognition Program Profiles & Best Practices 2008” report. (Available for purchase here.)

Covering respondents from across industries and around the world, the report comes to many of the same conclusions Globoforce has defined as best practices based on our work with some of the world’s largest and most diverse companies.
“Recognition is about acknowledgement and appreciation for a contribution, improvement, innovation, or excellence—a message to employees that they are valued. The act of recognizing an employee affirms the values and spirit underlying the achievement. It’s also about reinforcing desired behaviors and increasing their occurrence. Attitude and performance are closely linked; the appropriate recognition at the appropriate moment will create a positive attitude that, in turn, will lead to improved performance.”

A few of Ascent’s key findings from the report include those below, with my comments to each.

“Reinforce behaviors and reward results.” This is in agreement with what I said last week that recognition is about encouraging, acknowledging and appreciating desired behaviors, then rewarding results.

“Be timely, specific and communicate!” We advocate recognizing employees in the moment – as soon after the even worthy of recognition as possible so it is clear in the mind of the employee why they are being recognized.

“Match the reward to the person and the achievement.”
We’ve heard nightmare stories of recognition gone wrong. Let employees choose for themselves a personally meaningful and culturally relevant reward.

“Measure the effectiveness and impact of your reward programs.”
Ascent found nearly ¼ of respondents do not measure program success. This aligns with our own findings that 42% are not measuring their recognition program’s results in any way, leaving CEOs in the dark on the metrics of success they care about.

What are some of your best practices for effective employee recognition? Tell me in comments.

Communicating Employee Recognition to Maximize Motivation

How effectively do you communicate your recognition philosophy and strategy to your employees?

According to a recent Hay Group Study:
“Only 33% of companies believe they communicate their reward philosophy and strategy effectively to employees - yet 80% believe reward communication has an effective or very effective impact on the organization's performance, employee satisfaction, retention and employee engagement. Few companies formally evaluate the effectiveness of their rewards communications. In fact, 39% of respondents conduct no evaluation.”

These findings remarkably mirror or own beliefs about successful communications of recognition and reward. We advocate strongly for a “Pull” vs “Push” strategy of communications as well as training for our strategic employee recognition programs.

While the “push” of communications materials and training is very important, our experience has taught us the far greater value of creating a “pull” environment in which managers and employees want to learn more about recognition and want to use a recognition program. The keys to achieving this pull momentum are:
* Gaining high-level executive sponsorship throughout the organization
* Making the program intuitive and easy to use
* Incorporating the program goals into annual personal goals and MBOs

How do you communicate recognition and reward to employees? Do they understand the full invest you are making in them and your commitment to their well-being? If not, you are missing out on a tremendous opportunity to convey to your top performers their value to your organization, retaining them for greater competitive advantage today and when the market turns. Tell me in comments.

Retain Employees with Cost-Effective Recognition

Our CEO, Eric Mosley was cited in the Wall Street Journal this week in an article on tips for retaining top employees in a recession.
“Recognition builds loyalty and lets managers reinforce good behavior immediately. On the other hand, performance-based bonuses typically are given out just once a year (if that) and are far more costly.

One warning: Make sure all employees, from top to bottom, have the opportunity to participate in the recognition program, says Eric Mosley, CEO of Globoforce, a designer of employee-recognition programs. Otherwise, you'll risk playing favorites.”

Also, do you not have the time to read the latest research or tips on recognition? Globoforce offers podcasts for listening on your commute or at your convenience.

Our latest podcast is now available for download - “Making Your Employee Recognition Programs Strategic: Defining and Developing a Program that Provides Bottom Line Benefits without Additional Spend.” You’ll learn how to maximize the impact of your recognition programs to achieve greater measurable results with no additional budget investment.

Listen now or download it to your iPod for later.

How Much Is 5 Years Worth to You?

Can you place a value on five years’ loyal service? Think about employees in your organization who are at or near that mark? Did John deliver the same level of commitment and value to your organization as Sally?

Look at this example:
“When surveyed, employees consistently will ask for cash, but research shows that it is the least effective form of recognition – How come? Steve is – the model employee. He was surprised when his 10-year service award package offered him cash as an option. That his employer was able to put a price tag on ten years of his life, left him feeling a little cold and confused. …

“You can give a gift valued at 1% of an employee’s salary, and if done enthusiastically, they’ll feel the love. But, give them a 1% bonus or raise and they’re looking at the classifieds. Same dollars, totally different result – it’s all about perception!”

The research backs this up. McKinsey found that $1,000 given as recognition had 10 times the impact of that same $1,000 given as base compensation.

Letting the employee know very clearly their value to the organization in clearly non-monetary terms is equally as important. As Scott Jeffrey, a professor of management at the University of Waterloo, has pointed out:
"People just want to feel valued. Employees want to be paid fairly - but what really spurs a willingness to go the extra mile is acknowledging contributions, saying thank you and showing recognition."

To be meaningful, employee recognition must be fair (in line with performance and used appropriately) and personal (catering to each employee’s unique preferences and desires). Globoforce’s strategic recognition programs are uniquely designed to cater to every employee’s personal preferences to ensure meaningful, relevant rewards everywhere in the world.

How do you “value” your employees at their major anniversary marks? How do you show them you appreciate their efforts every day? Do you do so in a way that tells them, “I know you. I know what you like and don’t like. And I appreciate those differences in you?” Tell me in comments.

Why Incentives Fail

An odd topic for a blog on employee recognition. But it’s true. Incentives fail. Recognition for effort works. What's the difference?

The answer lies in understanding the fundamental difference between incentives and recognition. I liked very much a client's definition of incentive as "push the button, get the pellet." You are told in advance "if you do this, you get that." You are pre-directing effort in a way that eliminates the need for creativity and can actually discourage innovation and the desire to give additional discretionary effort - often with unintended consequences. Incentives are all about the stuff – the reward.

Recognition, however, is a more intensive effort that delivers the positive results companies are looking for when they think about these programs. Recognition is based on fostering an environment in which employees WANT to perform, then letting managers and even colleagues acknowledge exceptional effort and praise deserving employees for it. It is more intensive because it requires people to actually notice and then demonstrably appreciate the efforts of those around them. But that effort is well worth the result -- a true culture of appreciation.

The confusion arises because recognition can include a reward, but it is not about the "stuff." Recognition is about encouraging, acknowledging and appreciating desired BEHAVIORS. This is a critical difference to understand by any company desiring to influence employee behavior without stifling innovation, action and creativity.

Don’t misunderstand me. Globoforce offers incentives plans as part of our strategic offering. Incentives can have their place in a strategic recognition and reward strategy – for example in a sales incentive campaign or a call center initiative. But such usually short-term, end-goal campaigns cannot be confused with the overarching, long-term and ultimately cultural goals of recognition.

What is your experience with incentives v. recognition? Do you think I’m splitting hairs or do you agree with the very real difference between “incenting” and “recognizing”? Be sure to take our weekly poll.

From Boomers to GenY: Managing Generational Reactions to the Recession

While I’ve blogged extensively on the effects of the recession on employees, it’s interesting to look at how the generations at each end of the spectrum are reacting specifically.

Chief Learning Officer recently reported on two Deloitte Consulting studies showing:
“In both industrialized and emerging countries, employees between the ages of 50 and 59 were less engaged and less optimistic than employees between the ages of 20 and 26. And they may become even less engaged with the current recession, as they will need to continue working in organizations that may see them as outdated.”

“As for the younger generation, 45% of Gen Y employees surveyed said the economy will have either a ‘positive impact’ or ‘no impact’ on their marketability in the workforce. In the research, what comes out loud and clear are development opportunities — what we [might see as] audacious opportunities to take risks [and] learn new things. That’s really to a large degree what they’re clamoring for.”

Companies need both generations fully engaged. Boomers have the institutional and customer knowledge and experience critical to the continued success of the company. Gen Yers bring the spirit of innovation and risk-taking that will be necessary in the new world (business) order that will emerge from this recession.

What are you doing to cater to these unique needs of Boomers to GenY? You are also dealing with entirely different expectations for acknowledgment of effort in the workplace, praise and appreciation. For multi-national corporations, the additional layer of varied cultural expectations only adds to the confusion.

I addressed many of the needs of all generations in the workplace from vastly different cultural needs for recognition. Read more on engaging multigenerational and multicultural teams, including a link to our white paper on the topic.

You Asked * Bottom Line Value of Engagement & How to Onboard Well

I recently received a couple question from Tom G. through my box at the bottom of the Globoblog (feel free to send your questions to me directly, too). I think his questions warrant an answer directly on the blog. Tom asked:

“I was recently at a large firm where there was a big employee engagement effort over a couple of years. There was an engagement problem and it improved by some measures, although one question I have is whether it paid off on the bottom line. How do you help client companies prove the bottom-line benefit beyond just customer satisfaction and loyalty metrics?”

This is an excellent question with no simple answer. To track engagement improvements and the impact on the bottom line, companies must first establish a clear baseline of current engagement levels and then set goals for improvement, define how the recognition program is expected to impact those scores, and set metrics to measure improvement against those goals and definitions.

The statistics from the industry analysts are also powerful:

• Towers Perrin calculates: “A 15% improvement in levels of engagement correlates with a 2% improvement in operating margin.”

• WorldatWork calculates: “For the typical S&P 500 organization a significant improvement in employee engagement is associated with a $95 million increase in revenue.

It’s important to keep in mind that these statistics are derived from surveys of many companies, so to figure this out for your own company, you will need your own data (as discussed above) to track what changes historically. That way you start to see the patterns of impact employee engagement will have on the bottom line.

Best Buy did exactly this for significant results, as Human Resources Executive reported last year:
"Best Buy says they're able to track their survey scores to profits. If a store's engagement score increases by a tenth of a point (on a five-point scale), that store's profits will increase $100,000 for the year, says Joe Kalkman, the company's vice president of human resource capabilities."

We also recommend companies use recognition as another form of performance measurement. Consider that strategic recognition, especially when opened up for peer-to-peer recognition as well as manager-to-employee recognition, is a powerful indicator of performance specifically in those areas the company has defined as necessary for success – the company values and strategic objectives. For example, you can track recognitions against individual employee performance or division/group/company productivity rates, which would give a direct correlation of recognition to productivity and therefore bottom line results.

Tom also asked: “One of my ‘ah hahs’ from working with several employers is that the first couple of months on the job in a new company, the ‘on-boarding,’ are often not well managed, yet it's probably a critical time to develop the new employee's engagement. Do you offer a lifecycle approach to employee engagement which addresses this initial phase with a specific reward strategy for new employees?”

Establishing your company culture with a new hire is critical to their sustaining their engagement levels with your company. Company leaders need to honestly evaluate what a new hire perceives as the culture when they walk through the door – is it the culture you really want to have? It is more important now than ever to establish a company culture that will drive the employee productivity and company performance levels to carry you through the recession and prepare you for a solid start out of the blocks when the economy turns. We advocate a culture of appreciation in which employees are recognized for their efforts and they also understand why those efforts are critical to the company achieving its strategic objectives.

I’ve blogged before on this topic of onboarding, recognition and engagement here and here.

Regarding including recognition in onboarding, we strongly encourage clients to include training on our recognition program as part of the onboarding process, perhaps including a small value reward as a way for employees to experience the site for the first time. We also encourage sharing stories of appreciation garnered from the program both in onboarding training sessions and throughout the company on an regular basis.

I’d like to thank Tom again for his questions. If you’d like to submit a question, just send it to me through the “Ask Derek” section below. (email subscribers, click through for access.)

Leading from the Top with Recognition * Lessons from the CEO & CFO

I write often about the need to make recognition strategic. One of our key tenets for doing so is securing executive sponsorship of your recognition plans and programs. Unless your senior leaders buy into and actively promote employee recognition as a strategic initiative of the company, then you will not realize the positive culture change possible through simple, but measured appreciation of effort.

Chief Learning Officer magazine recently reported on a national CEO survey, showing CEOs are refocusing on “strengthening business by building stronger relationships” with employees and customers.
“Surprisingly, almost 70% of these company leaders are motivating staff with simple, yet effective, non-financial rewards, such as verbal and written recognition.”

Chief financial officers (CFOs) are following suit as well. Accountemps recently released a survey of 1,400 U.S. CFOs, showing:
68% of CFOs said they are implementing strategies to boost the moods of their teams. The survey found that the most common way businesses are attempting to raise workplace morale is through increased and improved communication (37%); while 15% enhanced employee recognition programs. In a period of economic uncertainty, managers need to invest even more time and effort into maintaining team morale.”

These survey findings reinforce earlier results counseling communication and recognition as the most powerful means of motivation during this recession. Using a strategic employee recognition program as a tool for communication of key messages gets you there that much faster. Then you are also clearly communicating your appreciation for the value your employees bring.

What are your executives doing? Do you know how to deliver the recognition program your CEO wants? Download our market research on just that to learn more: Great Expectations: Building the Employee Recognition Program Your CEO Wants.

Need to join in partnership with your CFO to deliver strategic employee recognition as a benefit you know your employees need right now? Read our market research for tips: Engaging the Global Workforce - Bridging the Gap between Finance and Talent Management.

Are Your Employees First in Importance?

In an era when post-survivor layoff disorder is discussed in Fortune magazine (March 2, 2009 issue), where do your employees fall in your priority list? Are they at the top where they should be?

Even Jack Welch, the titular father of the shareholder value movement, has recently denounced putting the shareholder ahead of employees and customers as a “dumb idea” in a recent issue of the Financial Times, saying: “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy …Your main constituencies are your employees, your customers and your products.”

Valuing your employees is now more important than ever as employee health falters due to the psychological impact of the recession. Workforce Management pointed out:
"Employers realize that margins are tight, and know they need a fully engaged and productive workforce. The economy is becoming a real motivator for employers to start paying attention to absenteeism in a way they never really did before.

“[According to Hewitt Associates], when we conduct engagement surveys and see high levels of engagement, we also see lower levels of absenteeism. Correspondingly, high levels of absenteeism usually reflect poor levels of engagement.”

Employee loyalty, employee value, employee engagement – all critical to achieving your goals, but often lacking as people fall under more and more pressure. The returns to getting it right are enormous, even to shareholders but, as Welch said, only when shareholder value is treated as a result and not a strategy.

What are you doing to make valuing your employees your strategy? Are you actively telling and showing them how much you appreciate their efforts? What simple acts of recognition are you making to foster employee loyalty? Tell me in comments.

Why Talent Should Be a Strategic Priority

Monday I looked at how HR will change post recession, and Wednesday I looked at how companies and CEOs will change due to the influences of the recession. But these changes do not happen separate from each other, of course.

McKinsey recently described well where changes to HR and the company critically converge – prioritization of talent and talent management.
“Companies like to promote the idea that employees are their biggest source of competitive advantage. Yet the astonishing reality is that most of them are as unprepared for the challenge of finding, motivating, and retaining capable workers as they were a decade ago. Since investments in talent intangibles are expensed rather than capitalized, managers may try to raise short-term earnings by cutting discretionary expenditures on people development. This tendency may turn into a vicious circle: a lack of talent blocks corporate growth, creating additional performance pressures that further divert the attention and thinking of executives toward the short term."

As discussed on Wednesday, short-term decisions to satisfy shareholder wants have been a key contributor to the poor long-term effects leading us into this current economic mess. Managing the talent you have is equally important. You must invest in employee needs for self actualization and self esteem as seen in the upper levels Maslow’s Hierarchy of Needs.

Consider that 85% of a company's assets are tied up in intangibles – people. What are you doing to ensure you are getting the most value out that very significant investment? Join the discussion in comments.

How Companies and CEOs Will Change Post Recession

Continuing on the thoughts from my Monday post this week, HR is not the only group that will change dramatically due to the influences of this recession and the causes of it. The company as an entity will itself change.

As the Washington Post pointed out, “Since roughly the mid-1980s, the American public corporation has been run primarily for the purpose of creating vast wealth for its senior executives.”

This is a fundamental problem that led ultimately to the situation we’re in today. Focusing on shareholder (short-term) goals has led to bad decisions with terrible long-term impacts. When only the shareholder is considered to be a worthy stakeholder, then the promise of the capitalist market is lost.

In the same vein, Harvard Business School recently published a Q&A with the authors of High Commitment, High Performance: How to Build a Resilient Organization for Sustained Advantage. Key observations in the interview include:
“CEOs of HCHP (High Commitment, High Performance) companies think very differently about their employees. They see them as an asset and care about them as people. As a result they manage downturns differently from the norm, too. They had a multi-stakeholder view of the firm as opposed as a shareholder view. The purpose was to add value to employees, customers, community, and society—not just shareholders. Their purpose is to leave a legacy of a great firm. "
I am looking forward to this change. We already work with visionary “HCHP” CEOs such as this at numerous clients of ours, including Intuit, Dow, and Thompson Reuters. These leaders truly understand valuing employees, who in turn value customers, who are ultimately responsible for keeping your company in business. It’s not the shareholders you should be focusing on – it’s your entire community of stakeholders.

Who does your executive team serve? The shareholders primarily or your entire spectrum of stakeholders, leading with employees? Be sure to take our weekly poll.