Strengths, Weaknesses, Ignored: How Are You Recognized at Work?

I think we all generally agree that engaged employees are a powerful force for delivering company success. I think we all also agree that you cannot force employees to engage. You can, however, create work environments and cultures in which employees want to engage and give their best.

So what can you to create such an engaging culture or environment? Gallup research released earlier this month found one simple factor – direct manager style – can profoundly impact employee engagement. To summarize:

• Managers who focus on employee strengths have 61% engaged employees and 1% actively disengaged

• Managers who focus on employee weaknesses have 45% engaged employees and 22% actively disengaged

• Managers who ignore their employees have 2% engaged employees and 40% actively disengaged

What’s the moral of this story? Employees crave any feedback from managers – any indication that what they do matters – but too many managers prefer to simply ignore the most basic of managerial duties. How many? According to Gallup, 25% of employees place themselves in the “ignored” category – not surprising when considered along with results from an Adecco survey (reported in Human Resource Executive) in which 76% of employees say the boss is lacking in motivational skills.

Some managers think they’ve effectively recognized employees by throwing money at them. Another recent survey from McKinsey proves the lie in this belief:

“Nonfinancial motivators are more effective than cash in building long-term employee engagement in most sectors, job functions and business contexts. … Respondents view three non-cash motivators – praise from immediate managers, leadership attention (for example, one-on-one conversations), and a chance to lead projects or task forces – as no less or even more effective motivators than the three highest-rated financial incentives: cash bonuses, increased base pay, and stock or stock options.”

Once again, praise and leadership attention are cited as most desired by employees and most effective at fostering employee engagement. Are you one of ignored? Are you recognized for your strengths or called out for your weaknesses? How does this impact your attitude, effort and commitment at work?

Systems of Engagement

Last month the Hay Group issued guidelines for “Engaging and Enabling Employees for Company Success” in Workspan magazine, the publication of WorldatWork.

“Retaining top talent is a key concern in good times and bad, given the importance of these employees to a company’s success and competitive edge. Unfortunately, many organizations rely too heavily on compensation as the answer. … Instead of zeroing in on compensation, organizations should focus on two key areas to keep and motivate their talent: increasing employee engagement and developing systems that provide better support for employees’ success.”

The authors expand on these two key areas as follows:

“To foster high levels of engagement, companies must make greater use of nonmonetary rewards, such as career growth opportunities, meaningful job designs and recognition programs. …

“Organizations must ensure that employees understand what they are being asked to do … and that their individual goals are connected to what the organization needs to succeed in the future. Organizations that build better “line of sight” between business results and job accountabilities tend to have higher levels of organizational clarity and employee engagement.”

Why are non-monetary rewards critical for successful recognition? Because cash compensates, it doesn’t motivate. When rewards are given as cash (bonuses or incentives), it quickly gets lost in the recipient’s paycheck. The actual recognition for effort that encourages engagement is lost.

As for “developing systems to support employee success”, strategic recognition is a powerful system that, when deployed properly, gives employees that necessary “line of sight.” By following strategic recognition best practice of linking every recognition to a company value or strategic objective, you are strongly and positively reinforcing precisely those behaviors or actions that demonstrate the company values in achievement of those objectives.

What systems do you recommend for encouraging employee engagement? (Note, I'm not suggesting a system OF engagement, but a system for ENCOURAGING engagement.)

Employee Engagement Call to Action (courtesy of David Zinger)

In my last post, I mentioned what I think of as David Zinger’s call to action on employee engagement:

“Employee engagement is an experience to be lived not a problem to be solved.”

So what does living employee engagement look like from David’s point of view? He has outlined that vision well in his 14 Keys of Employee Engagement.

This link includes David’s definition of engagement (quoted below), an image of his model of engagement for results, and a short description of each of his 14 elements of engagement.

“Employee engagement is the art and science of engaging people in authentic and recognized connections to strategy, roles, performance, organization, community, relationship, customers, development, energy, and happiness to leverage, sustain, and transform work into results.”

I encourage you to read David’s treatise on employee engagement and also this link on his 22 Awful Employee Engagement Mistakes. My favorite is number 20:

“Drop that carrot. Don’t use the image or word carrot in reference to employees. We are not horses and even horses probably aren’t too fond of the carrot and stick. So stick your carrot and find a better more respectful metaphor for motivation and employees.”

I would add to this point: Break that Stick! Using manipulation and fear as a means of “motivation” is a sign of cowardice and poor management, especially when a simple, heartfelt “thank you” is so much more meaningful, personal and yes, motivating!

I liked the way Harry Levinson put it in The Jackass Fallacy:

“When the first image that comes to mind when one thinks ‘carrot-and-stick’ is a jackass, obviously the unconscious assumption behind the reward-punishment model is that one is dealing with jackasses, that people are jackasses to be manipulated and controlled. Thus, unconsciously, the boss is the manipulator and controller, and the subordinate is the jackass.”

Tell me your one sentence employee engagement call to action. What would you add to David’s list of awful engagement mistakes?

100+ Years of Employee Engagement

In the last few months, employee engagement has been derided by some as nothing more than the latest industry buzzword or HR bandwagon that everyone is rushing to jump on as the savior of employee loyalty and productivity from the recession. What these pundits miss is two truisms about employee engagement summarized well in this Personnel Today article:

1) Employee engagement is not new and hasn’t been for more than 100 years. Beginning with an example in 1864 and continuing through the 1920s, the article highlights several companies that implemented what we would now define as employee engagement with the aim of “making employees feel secure, loyal and engaged.”

2) The benefits of engagement are real, but the motivation behind working toward an engaging culture must be sincere. As the article says:

“Employee engagement is such a hot topic because after ruthless cost-cutting, knee-jerk decisions and general short-term panic during a difficult economic downturn, company leaders want to sweeten up their staff so they don't run away to other employers once the recession has ended. If you are thinking about launching an employee engagement programme to make up for the pain and suffering staff have been through during the downturn, you are already too late.”

David Zinger, a widely respected guru of employee engagement, made this statement the first of his 15 Employee Engagement Beliefs:

“Employee engagement is an experience to be lived, not a problem to be solved.”

If you are sincerely interested in employee engagement, then your primary concern should be to create culture in which employees want to engage. Be sure to catch my next post on Wednesday when I will discuss David’s latest vision of an employee engagement model.

Retention vs. Loyalty * What’s Your Goal?

I recently read an intriguing post on Bnet on the difference between customer loyalty and customer retention:

“In this economy, customer retention is a great objective. But customer loyalty is even better. Why? Retention programs are often built on a financial transaction. Problem is, your value add to the customer is now about lower prices. Competitors can start to pick away your clientele simply by offering a better deal. Much better is the day when you have loyal customers. These folks have formed an emotional bond with your business that is not going to be broken when the store down the street offers a bigger discount on canned peas.”

The same logic applies to employee retention and loyalty as well. Are you simply trying to retain employees (relying on pay and benefits as your key factors)? Or are you working to foster employee loyalty among those who are “emotionally bonded” to your organization?

Am I just splitting hairs? Why does this matter? Look to a recent article in the Economist citing this research:

“A survey by the Centre for Work-Life Policy, an American consultancy, found that between June 2007 and December 2008 the proportion of employees who professed loyalty to their employers slumped from 95% to 39%; the number voicing trust in them fell from 79% to 22%. A more recent survey by DDI, another American consultancy, found that more than half of respondents described their job as ‘stagnant’, meaning that they had nothing interesting to do and little hope of promotion. Half of these ‘stagnators’ planned to look for another job as soon as the economy improved. People are both clinging on to their current jobs, however much they dislike them, and dreaming of moving when the economy improves. This is taking a toll on both short-term productivity and long-term competitiveness: the people most likely to move when things look up are high-flyers who feel that their talents are being ignored.”

If you’re not working to create loyal employees, then you might as well kiss your best competitive advantage goodbye. How do you help foster loyalty? Give employees a stake in the outcome – ask their opinions, really listen to them, implement what you can. In their daily jobs, take the time to specifically, authentically appreciate what they do that helps make your organization a success.

What are your suggestions for making loyal employees, not just retaining them?

Overcoming Effects of the Recession Disconnect

As we emerge from the recession, Aberdeen Group’s findings in its 2009 State of the Market Mid-Year Insights report have me scratching my head.

On the one hand, execution of strategy and shortage of labor/talent dropped from first and second place, respectively, to third and fourth on the “Top Three Challenges of 2009” query. This is not very surprising, as economic conditions and market volatility moved into first and second place, respectively, for 2009. The importance of execution of strategy dropped by only 7% (52% to 45%) from 2008 to 2009 – especially in a recession, executing strategy is critical, and management seems to recognize this by keeping shortage of talent as its next most important challenge.

However, and this is what leaves me a bit perplexed, when asked to list their top three strategies for 2009, respondents list “improve business execution” as first at 57%, with “staff development/expansion” dead last at 24%. While I understand that expansion is not in the cards for many right now, development should always be. After all, how do you expect to improve business execution if you are not developing your staff to deliver precisely that needed improvement?

If you’re going to improve your business results, then you must get all of your employees aligned with your changing/changed business strategies. This is a job for the CEO and his/her immediate team, not HR. As I’ve said before, one of the most effective and positive methods for creating alignment is through strategic recognition. These highly structured programs encourage employees to notice, acknowledge and praise the exceptional efforts and behaviors of colleagues that reflect the company values in achievement of the strategic objectives.

What do you think of the Aberdeen findings? What are your top priorities for 2009 and how do you plan to achieve them?

Master Change, Master Engagement

What are the key factors for employee engagement? I and others have written at length on this topic. I believe one key factor for employee engagement is creating an environment in which employees want to engage through strategic appreciation of employee efforts. But there are many factors that feed a truly engaging environment.

Recent research completed by Right Management shows how well change is managed in an organization is also a significant contributing factor. In fact 94% of employees who say change is not handled well in their organizations also report being disengaged. On the other hand, of those who believe leadership manage change well, only 40% are disengaged.

Among other key findings in the report, best performing organizations were reported to manage change nearly four times more effectively, while organizations that do not manage change well are four times more likely to lose talent.

Clearly, change is a powerful force within any organization. Lack of or unclear communication of objectives and expectations is one major reason for change to fail within in organizations. Employees need to know where you’re headed and how they contribute. Such simple messages are often lost in all the other talking points around any change initiative.

Strategic recognition is a powerful communication mechanism in a change management process, serving as a tool to positively and clearly communicate what is expected and desired from employees and then encouraging them to repeat those behaviors. Recognition of effort also conveys to employees how much they are valued and appreciated, especially during a potentially confusing and frightening change.

What are other key factors you see contributing to employee engagement? Do you agree with the findings of this research (of nearly 30,000 employees in 10 industries in 15 countries) that failure to implement change well is a significant contributing factor to disengagement? Have you recently gone through a major change in your organization? What was your experience?

Specific, Actionable and Authentic Praise

Continuing on the theme of my last post, giving praise is not only necessary and critical to employee performance and company success, it is also truly an art as Steven DeMaio discussed in a post to his Harvard Business Blog.

Steven offers solid advice in his post, particularly around what I call specific, actionable and authentic praise.

Specific praise goes far beyond a generic “great job” to make recognition truly meaningful. With specific praise, you tell the recipient what they did, how that behavior/effort reflected the company values, and why it was important to the team/department/company or contributed to achieving strategic objectives. Such specific praise makes it…

Actionable and repeatable. By giving employees such specific recognition, you clearly communicate what is important and encourage them to repeat those actions in the future. For employees to want to repeat such desired behaviors, however, your praise and recognition must be …

Authentic. Don’t fall into the compliment sandwich trap – “Great job on that task, but you forgot this one critical step. I know you you’ll get it next time as you are so conscientious!” This is a confusing message to employees. Did they really do a good job if an important step was missed? Offer constructive criticism, which is itself desired by employees, separate from praise for work well done.

What other tips do you have for effective and powerful praise or recognition?

Tenet of Strategic Recognition * Opportunity for All

Do you want to make your employee recognition efforts strategic? Then you need to be sure all employees have the opportunity to participate. I’ve written frequently before on this topic, but largely in the sense of performance levels. Instead of catering in elitist programs to the top 10% of performers, also open up the opportunity for recognition to the large middle tier of employees who are a large reason for the top tier being successful.

But when thinking of “opportunity for all to participate,” we must also talk about people at all levels of the organization being allowed to participate as well. Applied Materials CEO Mike Splinter says it best: “If I think someone has really done a good job, I’ll send a personal note to say it’s appreciated. It doesn’t matter to me what layer in the company they are.”

It’s not shocking, however, to hear of those at the top recognizing those in the lower ranks. Too often, the lower ranks are discouraged (intentionally or just by cultural reaction) from recognizing those above them out of fear of being viewed as currying favor. But those in leadership need recognition, too. In his KnowHr blog (and reprinted in Fall 2009 issue of the Conference Board Review), Frank Roche spoke succinctly and brilliantly on this point:

“I don’t remember what age I was when I noticed that people no longer told me that I was doing a great job. It’s not like I stopped doing good work — it’s that people think that once you get to a certain age or certain place in life that you don’t need praise anymore. … But what I do realize is that people need praise throughout their careers. Senior managers like to hear that they’re doing well as much as they did when they were junior functionaries. It applies to everyone — the price of praise is free. Tell someone today.”

An even better reason for ensuring all employees, at all ranks and levels, are included in a strategic recognition program that is based on your company values? Research shows it’s critical to employee engagement:

“The factor that has the strongest correlation with engagement is Leadership. There is a 51% difference between engaged and disengaged employees for the statement ‘senior managers truly live the values of this organisation.’”

If you want your leaders to live the values of the organization and be sure your rank and file employees notice that these values are being lived and demonstrated, then you’d better involve everyone – at every rank – in a strategic recognition program that links every recognition to a company value.

Governance over Global Recognition

Do you know where your recognition budget is going? Most multinational companies have multiple disparate recognition programs operating in different departments, plants and countries, contributing to increased risk, costs and confusion among the workforce. The full level of investment in these programs is often not fully understood as the funds are buried in dozens of different line items not visible at the corporate level, not compliant with corporate governance standards or local taxation laws, and not man-aged consistently everywhere.

Governing recognition programs is an exercise is getting the most out of your investment. In a recent article in The Conference Board Review (read the entire article as it is truly excellent), Carol Pletcher describes the problem well:

“No one, presumably, needs convincing that showing appreciation and thanks to employees is a good thing. But few top executives have taken the time to really think about recognition and make it a priority, and it shows. Studies demonstrate a strong link between recognition and enhanced financial performance, yet companies often delegate these programs to an HR staff person to run with little executive oversight. Some 90 percent of large U.S. organizations have recognition programs, but in surveys, relatively few employees say they feel recognized. The problem isn’t lack of funding, since companies spend more than you might realize on these programs—4 to 6 percent of salary per employee.

“So most likely, your recognition program is simply ineffective in its stated purpose. Worse, it’s a wasted opportunity to gather key information and ideas, and to drive home strategic thinking in the organization. For most companies, recognition is an underutilized asset, one that you can—and should—set on the right track. Your recognition programs telegraph what you value and what you want to happen; recognition is how your employees perceive what they are supposed to do. So if you’re unsure of whether your message—or strategic plan, or shift in culture—is getting through, a well-run recognition program can tell you.”

A recent article in Human Resources Executive on “A Global Response” addresses the same problem of governance on a global scale as a fundamental challenge of “gaining a clear picture of what what’s actually going on in their far flung overseas subsidiaries.” Cisco Systems’ global benefits design manager, Jeremy Hollister, put it this way: “Understanding who’s responsible for what, and how things get done, setup up that governance structure and putting in place accountability.”

Keying off just one point in Pletcher’s article – companies are already spending 4-6% of salary per employee, but they don’t always know where it’s going or if it’s being used to its full effectiveness. Globoforce’s In*form service guides companies through the process of uncovering all recognition initiatives and investments, from corporate sponsored loyalty programs to local manager efforts usually reimbursed through expense accounts.

Do you know where your recognition budget is going? What more could you do if you could consolidate globally scattered and ungoverned programs into a single, compliant platform?

Soul-Crushing Bonus Structure * What Would You Do?

A recent question in the “Dear Lucy” column of the Financial Times nearly made me fall out of my chair in shock, but it highlights perfectly the way most cash bonus programs are structured.

The letter writer, a female vice president, tells of a very low bonus she received after a very high evaluation from her boss, which the boss justified by saying she had gotten as much as possible and more than people senior to her. The letter writer then found out “others with worse performance got far more money.” The writer was very upset by this and wrote to Dear Lucy to find out if she had any recourse.

Lucy’s response, in part:

“You think a bonus is a reward for doing a good job. In fact, it is a prize you get for playing a game that is complicated, skilful and highly political. The boss controls the money and information, and the players lobby to get the biggest slice.

“The winners are the people who get the biggest bonuses, but neither the winners nor the losers will know for certain whether they have won or lost because the boss will tell everyone they have won, even if they haven’t. The result is mass dissatisfaction and paranoia. Secrecy and disinformation abound.”

I know many people reading this post have experienced such soul-crushing bonus programs themselves. And this answer is why I advocate so strongly against cash-based bonuses. Recognition and appreciation of excellent work is not a competitive game in which a prize can be won. Recognition and appreciation should never be political. Recognition and appreciation should never be secret. Structuring bonus programs in the manner as the one described only serves to breed dissatisfaction, disengagement and an extreme lack of trust.

True, successful recognition, rather, is transparent, public or at least published (to account for those who may not enjoy being called out in front of colleagues, even for praise), and above all else, sincere. In this way, everyone knows the score – appreciation and recognition is shown to those who live the values and achieve the strategic objectives. Nothing is hidden and a culture of appreciation can begin to grow in a company – instead of a culture of in which your top performers, like this letter writer, are advised to go find another job.

Problems with Debit Cards in Recognition

I’m often asked why debit cards aren’t a good option as part of a reward mix when planning a strategic employee recognition program. The primary reason is debit cards are essentially equivalent to cash. As I’ve said before, cash doesn’t motivate. It compensates. Each element of a total rewards package must have its own “currency.” Cash is the currency of compensation, not motivation or recognition. Sincere appreciation of effort will motivate far better than cash that only becomes an expectation and entitlement.

Aside from the cash aspect, debit cards just don’t work in global recognition programs for three key reasons:

1) Don’t translate globally – complicated usage requirements, intentional breakage and little to no global availability in all local currencies

2) Exorbitant and often hidden fees – currency conversion, overseas redemption, taxes, and usage fees (as discussed in this New York Times article) make debit cards actually worse than cash

3) Lack of transparency – difficult for recipients to track balance, actual balance in local currency, and places where the card can actually be used

By pre-selecting gift cards in the local currency from local merchants, recipients are guaranteed to have a hassle free, enjoyable shopping, dining, entertainment or adventure experience of their choosing with no hidden fees, extra taxes or intentional breakage. Employers are assured of a predictable, explicit budget line item to plan for taxation gross-up and program budgeting. Debit cards simply offer too many opportunities to confuse, distort and mismanage the recognition experience.

Blinded by Science * Can Recognition Really Be Tested in the Lab?

In the last month, two reports hit the news on intrinsic vs. extrinsic rewards and why non-cash incentives are preferable to cash. While both research reports ultimately support our position of the value non-cash, intrinsic rewards, I couldn’t help but find fault with the research.

In the first case, Psyblog reported research on How Rewards Can Backfire and Reduce Motivation. Using children between ages three and four who all enjoyed drawing, the research proved that those children who did not expect a reward for drawing but received a surprise reward for their efforts actually spent more time drawing and enjoyed it more. “Those who had previously liked drawing were less motivated once they expected to be rewarded for the activity. In fact the expected reward reduced the amount of spontaneous drawing the children did by half.”

In the second case, Incentive magazine reported research due out next year that examined people’s propensity to say they prefer cash awards but then in fact actually want non-cash incentives more. The reason lies justifiability – with non-cash rewards people can choose a guilt-free luxury experience that they cannot justify when given cash. In the study, “those imagining receiving non-cash awards reported that they would be significantly more satisfied than those folks who had to imagine receiving a cash bonus. But when asked to choose explicitly, those with a choice overwhelming chose cash.”

So what’s wrong with the research? The same two aspects that are often the problem when recognition is tested in the lab:

1) Limited – In the Psyblog example, the subjects are very young children – not exactly the sophisticated individuals we work with everyday. While the research does show that intrinsic desires are better motivators, which is supported by a great deal of other research, I prefer to look to our many customers and their experiences as proof of the value of unexpected recognition of desired behaviors as more powerful motivators.

2) Limiting – In the Incentive example, a major fallacy of some portions of the research was dramatically limiting the choices presented to research participants. In a lab setting for control purposes, these limits are necessary but are certainly not realistic in the real world. Once again, our customers tell us one of the primary benefits of our program structure is the ability for their globally scattered employees to be able to choose a culturally relevant and personally meaningful reward, from thousands of options, without that burden of selection being on the administrator’s shoulders.

How do you read and filter the numerous research reports in this area? What’s your “lens” you read through?