The Reality of Recognition in a Recession

We’re often asked, “What can I do to encourage, motivate and engage my employees in this recession when my budgets are being cut?” Our CEO, Eric Mosley, answered this question well in “Hands Off the R&R Programs!” in last month’s issue of Human Resource Executive.

Some companies are also downsizing their rewards, migrating from big-ticket items to lower-priced rewards, but rewarding more employees.

Eric Mosley says, "Five years ago, the average reward value in recognition programs was about $1,000 and their penetration was 10 percent to 20 percent of the workforce. Now, the average is $100 and strategic companies, progressive companies, want 80 percent to 90 percent penetration in their workforce."

According to Mosley, large companies can't change employee behaviors or attitudes by touching only 10 percent of their staff. They need to touch at least 90 percent and frequently, which is causing a general trend toward the development of reward and recognition programs that cost less to launch, yet engage the majority of the employee base.

"Ten years ago, HR would have been very uneducated about the science behind this," he says. "We've just seen an awakening of what it actually takes to change a culture. Sometimes a recession or slowdown can accelerate this movement."

As Eric says, actually changing a culture requires recognizing far more employees – what Watson Wyatt calls “investing in the core” and Jack Welch refers to as “rewarding the middle 70%.”

What changes are you making to your reward and recognition structure in this recession? What’s the business benefit behind your programs? How are you measuring that? Are you seeing your recognition program change your company culture or are you simply reinforcing the elitist ethos of the same 10 percent continually recognized with high rewards?