Culture & Change * It’s ALWAYS about the People

We all face change in the workplace. Whether it’s a major change (merger or acquisition) or a more minor change (to shift schedules, team make up, reporting lines), the impact can be the polar opposite of what was desired when the change was instituted. So what’s the best way to manage that change?

I believe it’s through your company culture. As this IndustryWeek article notes:
“Culture is all about people. Importantly, research has shown that it’s the people component that makes mergers work … or fail dismally! Make no mistake: culture counts, but not only In M&A deals, joint ventures, and outsourcing partnerships. Culture management is also critical to maximize the everyday output of work teams and to minimize productivity-killing conflict that's so prevalent in many companies' day-to-day operations.”

Okay, that’s pretty straightforward. I think most of us can agree on that. But what kind of culture is most supportive of change, which seems to be coming ever faster in today’s world – new competitors, new customer wants, new employee needs/demands, new economic challenges? This Strategy+Business article argues for a systems approach:

“The speed and complexity of the global business environment calls for a new appreciation of a systems-focused view of the world... The intellectual roots of systems understanding are very diverse, but they converge around three interrelated assumptions.
1) Because many of today’s organizations are complex and ever-changing, static solutions that try to lock in any ongoing management solution are likely to become new sources of destabilization themselves. …
2) Organizations must have a capacity for widespread experimentation and trial-and-error learning if they are to be self-correcting.
3) Although a systems view requires an understanding of how all the parts fit together as a whole, it also depends on an intimate understanding of the parts themselves. This is because change in any part of the system or in its outside environment — including the other systems to which it is connected — can produce profound ripple effects.”
That’s great on a theoretical level, but HOW do you do this? How do you successfully execute change with highly willful, often stubborn, and usually less informed people – the employees upon whom you rely for the change to be successful? Steve Roesler relates one successful approach:

“After calling the group of 9 people [affected by the change] together and announcing the upcoming work changes, I made this statement: ‘The changes themselves aren’t negotiable (I explained why). However, you can decide how best to organize and execute them. You are considered the experts when it comes to this function. Before we do anything, I want to have a discussion about your initial reaction. What do you see as immediately positive and why, what’s lousy and why, and how will this impact your life.’ …

“They had to be allowed to have real conversations, regardless of the feelings involved. The process isn't linear, clean, or filled with smiley faces because it involves telling, and listening to, the truth.

Outcome: The company saw its intent and meaning for this project realized; the team members did the same. The overall result created a new meaning in the depth of relationship between the corporate entity and the people involved.”

And that’s the rub. If you do not involve your people – not just communicate at them, but rather have an ongoing conversation with them – I can almost guarantee your change initiative will fall. Prepare for inevitable change now. Start fostering a culture centered on your people.

What’s your culture like today? Can it handle change?

We're Blogging Everywhere * Read Us in HBR & Compensation Cafe

Last week was a great week for Globoforce in the HR Blogosphere.

Eric Mosley, Globoforce's CEO, blogged for Harvard Business Review on why bonuses don't work. In "You're Getting a Bonus! So Why Aren't You Motivated?", Eric explains the downside of bonuses and offers an alternative solution that better delivers the desired improvements in productivity and strategic alignment.

Then read up on how that could work in practice in my post on Compensation Cafe: Appreciating the Runners as Well as the Winners. I tell the story of Tom, an avid if unskilled athlete, who was nevertheless voted team captain for his consistent demonstration of leadership, encouragement and wisdom among his teammates.

Click through to see how this relates to employee recognition.

Putting Strategic Objectives to Work

In an article on the importance of morale and engagement, what intrigued me most was a statement on execution that applies to far more than just efforts to improve morale or increase engagement:
“It’s not your plans that are important; it’s whether you can implement them. A good strategy is a fine thing, but it is useless unless you can make it happen. Making it happen depends to a large degree on your people, and therein lies the power of morale.” (emphasis original)

This is the inextricability of strategy from execution. You cannot consider one without the other.

A highlight in HR Magazine outlined the characteristics of good strategic objectives. Two thirds of clarifying questions offered dealt with action – what are you doing or what will be done by others to make the objectives a reality. For example:
“Do employees throughout the company understand how these objectives affect them and how they contribute independently and collectively to the defined objectives?”

It doesn’t matter if you spend mere hours or long weeks crafting strategic objectives that you believe will lead your organization to the top of your industry if you do not consider how you will communicate those objectives to your employees. Even more important is helping employees understand, through the work, how their efforts and behaviors contribute to achieving those objectives.

The most positive and reinforcing way to do that is through strategic recognition that intentionally acknowledges and praises those efforts that reflect your company values in contribution to achieving your objectives. This makes your objectives real and meaningful for every employee.

What are you doing to make your objectives come alive, from the shop floor to the executive suite?

Results Last Philosophy for Greatest Success

What’s your philosophy of leadership? Hands off? Micro-management? Numbers-based (just deliver the results)? People-based (keep employees happy)? Some combination of the above?

When asked that question in a recent New York Times “Corner Office” column, the CEO and chairman of Saks, Stephen Sadove, had this to say:
“I have a very simple model to run a company. It starts with leadership at the top, which drives a culture. Culture drives innovation and whatever else you’re trying to drive within a company — innovation, execution, whatever it’s going to be. And that then drives results.

“When I talk to Wall Street, people really want to know your results, what are your strategies, what are the issues, what it is that you’re doing to drive your business. They’re focused on the bottom line. Never do you get people asking about the culture, about leadership, about the people in the organization. Yet, it’s the reverse, because it’s the people, the leadership, the culture and the ideas that are ultimately driving the numbers and the results. So it’s a flip.

“What I try to teach people is, don’t ask the first question in terms of numbers. Let’s talk about the people, let’s talk about the culture, let’s talk about the ideas and the innovation.”

I greatly appreciate Mr. Sadove’s philosophy, summarized as:

Leadership --> Culture --> Strategic Objectives --> People --> Results

When you focus first on your leadership, what kind of culture they are passively allowing or actively encouraging to develop, the strategic objectives you’ve identified for your organization, the people executing on those objectives within that culture, THEN you will get the results you need – and perhaps more. But if you focus first and most intently on the results, as Wall Street tends to, you may achieve a short-term objective but lose any sustainability to continue those trends in the long-term.

I wrote a couple of years ago about a finding from the Forum for People Performance Management and Measurement 85% of a company’s assets are in “intangibles.” If, as is standard, Wall Street firms are valuing companies based only on tangibles, then much of the picture is being ignored.

What’s your philosophy?

Join Me at SHRM * 2 Sessions on CEO Role & Measuring Recognition

Join me at SHRM's 2010 Annual Conference and Exposition in San Diego, June 27-30, 2010. I'll be leading two sessions:

In “The CEO’s New Role in Recognition,” Monday, 28 June, from 4:00-5:15, I will demonstrate to HR leaders how strategic employee recognition — when championed by the CEO — can transform a company’s culture, ignite motivation, and positively impact an organization’s workforce and business performance.

I will also discuss:

* Why today’s employee recognition programs require the support and attention of CEOs to be truly strategic and effective.
* How to generate executive support for employee recognition programs by demonstrating the short and long-term impact on employee and business performance.
* What actionable steps every HR leader should take today to foster a culture of appreciation across their company.

In Wednesday's Mega Session, “Measuring Recognition for Maximum Business Success,” 30 June, from 10:00-11:15 a.m., I'll share best practices for measuring recognition for maximum business success. This session will help HR leaders build a business case for strategic recognition by demonstrating how the program can be measured against corporate goals.

I will also discuss:

* Why employee recognition is on the path to become the must-have HR program of the 21st century due to its measurable impact on key employee and business metrics.
* How forward-thinking HR leaders are applying best practices to measure recognition by reaching the vast majority of their workforce with awards tied to core values and strategic objectives.
* What new technologies and trends are elevating employee recognition and how HR leaders can leverage them to make a quantifiable impact on employee engagement.

If you're at SHRM, please do introduce yourself. I look forward to meeting you.

Corporate Culture * Myth or Reality?

A Bnet post titled “Why ‘Corporate Culture’ Is a Myth” caught my attention. The author makes imprecise distinctions between “culture” and “values”:

“The values of a group might be honorable — or not. Unlike the mushier name culture, with its connotation of a cozy melting pot or a delightfully harmonious salad bowl, values includes more than what is outwardly professed, endlessly parroted and tritely canonized on T-shirts and coffee mugs. It also encompasses what is implicit, often deliberately buried and denied. People may talk your ear off about their culture, but values can be seen in real-time … as evidenced by real actions.”

I don’t know about you, but I’ve seen plenty of company values “endlessly parroted and tritely canonized” on wall plaques, coffee mugs, ID badges and wallet cards. These lists had no more impact on employee behaviors and actions than the “culture” the Bnet author is so quick to deride.

The missing, but critical, point to understand is that values and culture are inextricably intertwined. The problem arises when a company has its STATED values (on a plaque on the wall, coffee mugs, ID badges) that are entirely different from the demonstrated and TOLERATED values. Regardless of the STATED values, it's the TOLERATED values around which the culture is formed.

Think of it this way -- ENRON had several stated vales, included integrity. But they sure didn't demonstrate integrity in their work. The company culture was very much one that encouraged deceit and profit at all costs.

So how do you merge your STATED values come alive to contribute to and create the company culture you want? The most effective way is also the most positive -- through strategic recognition. This is "after the fact" recognition that catches employees behaving in the right way, and then specifically calls them out for it. In a formal recognition program, we strongly recommend using your company values as the reasons for recognition and then allow anyone in the organization to formally recognize anyone else. What would this look like?

"John, thank you for the INTEGRITY you demonstrated when dealing with customer X. It was a difficult situation for reasons ABC, but you consistently held to our standards as a company while still responding to X's needs in the most appropriate way as well. Well done."

If you allow anyone to notice and appreciate behaviors of colleagues that reflect your values, and you encourage such recognition frequently, employees begin to understand how to live out the values in their daily work -- taking the values off the wall and making them real. This then creates the culture you wanted -- one built on recognition.

Precarious Culture * Achieving the Proper “Balance” with Recognition

Have you ever heard the aphorism to truly understand something you have to look at it another way? Well, sometimes you have to turn it upside down.

Paul Hebert, a blogger I always learn from and author of the i2i blog, recently posted an interesting perspective on corporate culture. In discussing corporate culture, Paul presents the usual pyramid of a broad employee base on the bottom, a smaller layer of middle management, and the smallest group – senior executives – at the point on top. The problem with this view, Paul argues, is the appearance that senior execs are less important to driving company culture.

To fix the perspective, Paul turns the entire pyramid upside down, with the broad base of employees at the top, middle managers in between, and the small point of senior execs on the bottom. Paul’s point:

When I see this image I think – wow – that thing could tip over at any time if the bottom level (now the senior managers) ever crumbled or if it moved in any direction. The entire culture is now supported by a fine point at the top (now the bottom) of the pyramid.

From my point of view this communicates much better how important the senior levels are with respect to defining and driving culture in an organization. Flipping the pyramid truly highlights the precariousness of culture in an organization.

It won’t take much to tip that inverted pyramid over. And we’ve seen it happen time and time again. One or two bad apples can really affect the organizations culture.

This is a wise observation from Paul. While it’s true that a company’s culture is more of an ethos than a malleable “thing” that can be influenced by anyone, it’s also true that the senior executives wield much greater power in their ability to change a company culture – for the better or for the worse.

I’ve commented before on targeted examples of culture destruction at Home Depot and Delta Airlines that happened in a relatively short period of time and were the direct result of the actions and attitudes of new chief executives. On the positive side is the classic example of Tony Hsieh at Zappos and his commitment as CEO to only hire those employees who not only fit within the culture but will actively live and promote the values and behaviors that create the culture.

This is why it’s critical for the CEO to actively desire and promote strategic recognition as a powerful mechanism for promoting desired values and behaviors through the work of all employees. With such influence and direction, the CEO can make the foundation of the culture much more stable and less likely to crumble.

Learning from Xerox: Changing Culture to Make a Positive Even Better

Ursula Burns has been much in the news lately, it seems. One article on her that particularly caught my eye appeared in Fortune magazine a couple of months ago. The article opened with this:
“Being bold has never been a challenge for Burns, 52, a mechanical engineer who got noticed at Xerox (XRX, Fortune 500) because she often spoke up bluntly in a famously -- and overly -- genteel culture. She becomes the first African-American woman to run a Fortune 500 company and succeeds Mulcahy as chairman in May.”

She got noticed for speaking bluntly in a genteel culture. Yet that’s something she wants to change in the Xerox culture under her tenure. Later in the article, Burns says:

“Some of those things can become a hindrance, especially when you need to move quickly, which is just about every day. This niceness sometimes leads to lack of motion, lack of decision. We have great operators in our company all around the globe, and we haven't quite given them comfort in operating independently. They can do it. So I want them to actually start doing it. Walk in here and use your brain, take chances. Not being reckless. But they know what to do. They don't have to call me to do it.”

So how do you do that? How help them get comfortable in operating independently when you know this is something they can do? You can’t just tell them to “operate independently.” You have to directly, consistently and frequently recognize and reward employees when they do just that. Call them out specifically – “Jane, thank you for operating independently when you made the decision to do XYZ. You clearly understood our challenges in Project X and took the necessary steps to alleviate those challenges and please the customer extraordinarily. Well done.”

But this isn’t something that Burns or anyone on her team should have to figure out how to do  operationally. Just as she explains Xerox takes that burden of detail off of their clients:

“What we do is manage document-intensive business processes for our clients around the world so that they can focus on what they really do.

“We do that by applying technology. We do it in a global way, so that if you have locations around the world and you want to communicate with your people in a fairly consistent way, I can do that for you. It will look the same, feel the same, be delivered in the same time and the same format. All the information you want present will be there; anything you want redacted will be gone. You shouldn't have to worry about that.”
Globoforce does the same. Too many companies spend too many hours and too much budget trying to manage disparate recognition programs, some home grown, some outsourced, all around the world. Similar to Xerox, we manage recognition business process for our clients around the world so they can focus on the business. We do this by applying strategic recognition technology and solutions to make recognition fun and easy. We are the only truly global provider to make sure all employees can participate equally and experience the same opportunity for recognition. We give everyone the same access to uniquely personal, culturally appropriate and meaningful rewards. Our clients don’t worry about this. We make it happen for them.

Globoforce Joins Compensation Cafe Bloggers: Debut Post on Employee Economic Reality

What’s your personal “blog roll?” What sites fill up your reader or do you find yourself regularly visiting throughout the week to keep you finger on the pulse of your industry?

My blog roll is quite long. Just a few I follow are listed in the footer of this blog. But one I’ve found to offer consistently valuable insight on the varied aspects of compensation is Compensation Café. A round-up of industry experts from around the world, the Café prides itself on “serving up straight talk, original thinking and caffeinated discussion on everything compensation.”

I’m pleased and honored to have been recently added as a regular contributor to Compensation Café. My debut post appeared today, in which I discuss the bi-polar nature of the economic news in the last month and the impact that’s having on your employees. As I note in the post:
“Company leaders cannot predict when we will pull out of the recession sufficiently for employees to decide to jump ship. We do know, however, that half of employees are disaffected in the workplace and even those who are engaged (high-potentials) will leave for a more fulfilling or appreciative work environment as soon as they are able.”

Hop over to the Café to read the news and research backing up this conclusion or to check out the insights from the blogging team. A few of my recent favorites:

From Margaret O’Hanlon on Performance Management: Pop Quiz: Can You Use "Mid-Year Review" & "Business Investment" in the Same Sentence?
“Instead of using your performance appraisal process as the context for mid-year reviews, dig deep into the business issues your company is facing with products, services, customers, technology. Check out how your stock has trended and learn why. Work with leadership to build an accurate, insightful business case that will educate managers and employees.”

From Laura Schroeder on Engagement: Strings Attached
“At the end of the day, it’s a complex mix of factors that keep people in a job or lead them to move on so I think we need a better word than engagement. My suggestion is connection because people who feel personally and professionally connected to a company, to a manager, to a group of colleagues, or to a particular job, are more likely to give more of themselves and less likely to go elsewhere.”

From Chuck Csizmar on Global Recognition & Reward: The Risk of Global Standardization
“You might think that the positive aspects of employee recognition programs are a universally accepted principle, but that's only partially correct. Important difference exist when something can be viewed from multiple perspectives. In some cultures / national identities the role of the team is such a core element of employee identification that seeking out an individual contributor for recognition is not an accepted practice. Some employees might be reluctant to step forward, or be pushed into the spotlight.”

Pour a cup of coffee and settle in for some good discussion at the Compensation Café. I hope you enjoy the conversation and learn as much as I do.

Employer Brand * Likely More Misunderstood than You Think

Here’s a startling statistic I ran across recently:
“70% of senior leadership understand and 49% value the employer brand, compared with 10% and 20% of employees/potential employees, respectively.”
That’s from a CIPD/Mercer report published a couple of months ago. Consider your own organization – your leadership gets “it”, but your employees, the people who execute “it” don’t. And don’t assume your “employer brand” isn’t important. This is another way of identifying your company culture, the ethos that others see you as that is largely beyond your control.

Steve Jobs and the Apple brand do this exceptionally well. Not only do his leadership and employees get "it," but so do consumers.

Three key tips from the research on how to increase understanding among your employees/potential employees of your employer brand – and, critically, align that understanding with what senior leadership intended.

Align Employer Brand with Reward

“Branding and rewards should be mutually supportive, emphasizing the need to get the initial alignment correct and ensuring authenticity within the organization. Aligning employer brand with reward can help companies meet employee expectations, from attracting them into the company to developing trust and commitment during their careers.”

While this report focuses largely on external brand and the total rewards package, it also links employee value proposition to rewards strategy, a desire we’re seeing more if in many of the more ambitious, direct consumer-facing companies we work with.

Use Company Values as Strategic Link

This report strongly supports using the company’s values as a common link in the company culture and the basis of reward – one of Globoforce’s 5 tenets of strategic recognition.

“The most effective way rewards can support employer branding is through rewarding desired behaviors. Often defined in a company’s values, these behaviors can create a clear identify for employees and support a positive customer experience that together reinforces the company culture.”

Just as the report strongly advocates using company values and recognition based on them as a means of performance management, so too does Globoforce strongly recommend using strategic recognition as a faster, easier and more cost effective means of performance management in an organization – a 360° ongoing performance review based on what companies most need to succeed, which is consistent demonstration of the company values.

Getting this right will ensure that new and existing employees are strongly linked with the company ethos and remain more loyal over the long-term, drastically reducing retention and replacement budgets.

Lead from the Top
Agreeing with and working to achieve the above is great in principle, but to truly succeed, you need the CEO to not just buy-in and promote the program, but to preside over it as one of his/her projects seen as critical to company success:

“Often the most successful strategies are those that are presided over by a CEO who is visible and active in the process.”

Employer brand is near and dear to every CEO’s heart. What are you doing to show him how you can proactively contribute to the understanding of this brand at every employee level – and measure and report on the results?

Forget Your Top Performers. Worry about Your Second Tier Instead.

What’s keeping you up at night? In Silicon Valley it’s the same as it’s always been – retention and recruiting. The recession made no impression on the talent market here in top tech industries. One SVP of HR reports “he still has to pay top dollar for hard-to-find talent, and he has to work creatively to keep the necessary mix of skills in-house. It’s a reality that keeps him awake at night and makes him wary of the eventual recovery.”

But it’s not your top performers you really need to worry about. BlessingWhite tells us:

“The 29% of employees who are engaged in the typical organization, while not immune, are less likely to respond to competitive overtures. However, the 27% who are 'almost engaged' are strong performers — and they'll take the call from a search firm.”

All the buzz seems to be around “what to do about retaining your top performers.” Have you been concerned about these second-tier employees? They have just as much knowledge about your workplace and competitive differentiators, just as much desire to work hard, and have likely been a powerful force behind the success of your top performers.

So why would they consider leaving? For the same reasons as any others in your workforce – overworked and underappreciated. It’s just these employees who can do something about it. Deloitte’s research says up to 44% of employees actively looking will take action on their turnover intentions. Can your workforce handle that large of a shake-up – especially in your top two tiers of performers?

ERE brings it all back into perspective in an article on “Where Should HR Be Spending Its Budget Right Now.”

“Overworked and underappreciated could be the mantra of many members of the workforce. Even if budgets do not allow for raises, bonuses, or even increased staff levels, budgets should allow for employee recognition programs to increase morale and reward those for taking on added responsibilities.”

When considering your retention efforts, is your focus broad enough to consider the second tier?

Retain, Develop, Plan, Innovate * Talent Management & Recognition

I’ve read more articles, reports and blog posts than I can count about employee turnover and retention in the economic recovery (most recently in the WSJ: "More Workers Start to Quit"). I’m sure you have, too – the crux of all them is that employees will soon have a choice of employment and those employers who spent the last 1-2 years believing they could do what they want to employees who will take it just to “have a job” will end up holding the short end of the competitive advantage stick very soon.

Recent Deloitte research comes to much the same conclusion, but there are a couple of interesting points to highlight:

“When asked to rank their top three retention tactics, in every instance, employees chose different non-financial incentives than the executives.”

“What employees are saying is quite simple: Money is important, but greater compensation alone is not enough to keep them satisfied in their jobs. This is particularly true during tough economic times when companies are trying to squeeze more out of their workforces and employees have reached the limit of their ability to take on more work.”
It’s the questions for talent leaders highlighted in the report that set this study apart from so many similar ones. The final key question really drives the point home:
“Do you know what it takes to stay ahead of your competitors in retaining critical talent, developing new leaders, implementing workforce planning, and driving innovation?”

Did you notice the first three items in that list are classic talent management concerns, but the final one – driving innovation – hits the bottom line of every business, every organization. If you can’t innovate to stay ahead of your competitors and lead the market, you will die. All the other points serve to drive that final one – the need to innovate.

Strategic recognition is a unique solution for encouraging, tracking and measuring all four elements:

Retaining critical talent – Through a culture of recognition, employees know they are appreciated and valued for their contributions, creating a unique employment value proposition and contributing to lower employee turnover.

Developing new leaders – Strategic recognition, properly applied with 80-90% of employees participating, uncovers hidden power players and true leaders through the wisdom of crowds , helping to target a broader spectrum of strong leaders and contributors for additional training & development.

Implementing workforce planning – Recognition uncovers both strong and weak areas of performance at the individual, team, group, division and company level to allow for very targeted intervention or reinforcement.

Driving innovation – By making “innovation” a reason for recognition, you can begin to understand where innovation may be lagging for targeted intervention, training and other appropriate steps.

How do you measure innovation in your organization?

Free Webinar: REBOOTING LEADERSHIP - Back to Basics in Today's Workplace

Join me this Thursday, 10 June 2010, (8:30am Pacific/11:30am Eastern/4:30pm GMT) as I host a free webinar with Bill Catlette and Richard Hadden, the authors of the Contented Cows books, as they discuss what makes today's workplace different and how frontline leaders must adjust to the changes.

We'll discuss:
• How to reboot and rebuild trust
• Connecting in today's plugged in society
• The role of reward and recognition in engaging this workforce
• Building productive relationships at work

Be sure to register for the webinar and I'll see you on Thursday.

More on Rebooting Leadership from their website:
"Emerging from the ashes of an eight year period that witnessed the outright collapse or systemic failure of Enron, Worldcom, Lehman Brothers, AIG, your bank, my airline, and who knows which auto companies, are a new set of realities and expectations that profoundly impact the way people conduct their lives, their relationships, and their work.

"Rebooting Leadership reflects upon the attendant new dimensions of the workplace, examines how the practice of leadership is, by necessity evolving, and provides actionable insight and guidance for levels 1, 2, and emerging leaders from each current generational cohort. Moreover, that insight and guidance are provided in the vernacular, context, and mode most associated with each cohort (Generations X, Y, and Baby Boomers)."

Part 5: Catalog Providers Hate Gift Cards because Your Employees Love Them!

In my final look at why employees love gift cards in a reward program, we saw how, with the introduction of gift cards into an old catalog selection – within weeks 90-99% of employees will select the gift cards! That’s exactly why catalog providers hate them, because your employees love them!

Let’s look at one more of the reasons employees play back to us as to why they love gift cards. Employees tell us…

“I love that gift cards are GREEN and SOCIALLY RESPONSIBLE, too.”

Yes, you read that right – employees do play back to us they like that gift cards have an environmental and socially responsible dimension, too. How is that?

Consider this. A merchandise catalog company – Incentive Boulevard, Inc – is based in the heart of the US with another office in the UK. As a rewarded employee in, say, China, I select my reward – let’s say it’s a portable BBQ Grill. What’s the classic journey of that grill?

1. Item Manufactured in China
2. Shipped to the Incentive Boulevard Warehouse in the USA or UK
3. Item Shipped from the USA or UK back to employee in China!

Compare that to gift cards:

1. Item manufactured in China
2. Shipped to local department store close to employee in China. Employee collects locally.

I know there are thousands of permutations of how this could play out, but the basic premise is that a second shipping trip is always required to get the item from Incentive Boulevard warehouses – even sometimes back to the very country where the item was manufactured to begin with. This creates a lot of carbon footprint! Or think of it this way. When the price of oil went through the roof in Summer 2008, the surge in shipping costs was the equivalent of a 9% tariff on trade. If you cut the costs of shipping merchandise around the world, you not only cut your costs, you spend more of your recognition and reward budget where you intended – on your people – and you eliminate the eco-expense as well.

Now let’s consider the social impact too. I am that employee in China – yes by picking an item of merchandise made in China – I support local manufacturers, but I am also supporting employees in Incentive Boulevard warehouse thousands of miles away in the US or UK. What would I prefer? How about spending my reward, yes, on a locally manufactured item, but also purchased from a local merchant, with local employees who understand my specific needs.

Or how about spending my reward at a local spa, or in a local restaurant or cinema chain, or giving my reward to a local charity. All of these are possible when local gift cards are used – I get to enjoy and use my reward while also making an economically progressive decision to support my local economy and the local employees who are my neighbors. Don’t get me wrong – I am 100% for international trade; however, the gift card route allows many thousands of local economies to benefit from your program, not just the one of two where Incentive Boulevard has their warehouse.

More food for thought – do you think your employees care that your reward options are Green and Socially Responsible?

For those just joining the GloboBlog community today, these are the links for the past related posts in this series:

Part 1: Catalog Providers Hate Gift Cards because Your Employees Love Them

Part 2: “I love REAL CHOICE, not pretend choice.”

Part 3: “I love that they are LOCAL to where I live, not one size fits all."

Part 4: “I love BEST VALUE for my money, not being price cheated.”

Engagement Down but Factors of Engagement Remain the Same

Nearly a year ago, David MacLeod and Nita Clarke were commissioned by the Department for Business (BIS) to take an in-depth look at employee engagement in the UK and to report on its potential benefits for organizations and employees. Mr. MacLeod summarizes the main findings of the report well in this 2.5 minute video.

In brief, Mr. MacLeod reiterates the strong correlation between engaged employees and strong organizational results as well as the need for strong engagement coming out of recession to face stiff competition from BRIC. He also reiterated the four things that reoccur in organizations with high engagement levels:

1) Employees have a clear sense of where the organization is going and how their role fits within it
2) Managers are engaging in that they offer employees clarity on expectations, lots of reinforcing feedback, how to organize work effectively, and individual treatment and respect
3) Employees have a real voice and open communication of both the bad and the good is common
4) Stated values and behaviors are brought together

But now Kenexa research is showing that UK employees are engaged less now than they were at the height of the recession (currently 51% engaged, compared with 54% in 2009). And yet:

“The report shows high levels of employee engagement are linked to business leaders who inspire confidence in the future; managers who recognize employees and emphasize improvement as top priorities; exciting work and the opportunity to develop; and organizations that demonstrate a genuine responsibility to their employees and communities.”
These 2010 Kenexa findings on factors that contribute to employees choosing to engage is very similar to MacLeod’s 2009 report – even with the drop in engagement. This leads me to believe the factors for engagement aren’t changing, just the company’s ability to support those factors.

The important questions for you to consider are:

1) What are you doing to clearly communicate to your employees your organization’s changing strategic objectives and how they can/do help achieve them?
2) How are you encouraging managers to treat their employees as individuals with lots of positive, reinforcing feedback?
3) What are you doing to give employees a voice?
4) How are you linking company values to employee behaviors in a meaningful, honest way?

Don’t Kill Health & Wellness * Leverage Engagement & Recognition

Do you have a health and wellness program in your organization? What about an employee engagement initiative? If you have both, do you look for correlation between the two? How about causation?

Causation, of course, is harder to prove than correlation, but Gallup recently released interesting research on the effects of employee engagement on employee health.

“Engaged people feel less stress, and the stress they do feel is offset by a lot more happiness and enjoyment and interest. …

“Not only do anxiety and depression take a personal toll on workers, but they also result in significant direct costs to businesses in medical expenses -- and indirect costs, including lost productivity. In 2000, for example, the economic burden of depression in the United States was estimated at $83.1 billion, which included $26.1 billion in direct treatment costs and $51.5 billion in indirect workplace costs from absenteeism and "presenteeism," or reduced productivity while at work due to depression. And a 2003 study found that workers with depression reported an average of 5.6 hours of lost productive time at work each week, compared with an expected 1.5 hours of lost productive time among workers without depression.

“A recent Gallup study into the effects of disengagement on mental health -- conducted February 2008 through April 2009 -- studied U.S. workers as the country moved through the recession. … actively disengaged employees were 1.7 times as likely as engaged employees to report being diagnosed with anxiety for the first time in the next year. And actively disengaged employees were almost twice as likely as engaged employees to report being diagnosed with depression for the first time in the next year.”

Obviously, the recession and its effects on the workforce has caused employees to react in a variety of ways, including with physical and mental symptoms of illness. How they will choose to handle that reaction is an even more important question.

The Chief Happiness Officer blogger, Alexander Kjerulf, recently posted the story of a reader of his book, Happy Hour is 9 to 5. The reader tells of his decision to change careers into one that paid much better but required him to leave the field he loved. After gaining 100 lbs. and suffering several other physical ailments, the reader completed an exercise in Kjerulf’s book. The main lesson he learned:
“I used to take better care of myself when my work was more in line with my personal values.”

The main take away – you may not be able to alleviate the stress of layoffs, pay reductions or other challenges faced by your team. But you can help them see how their personal values are reflected by your company values. You can give them a greater sense of personal meaning and purpose in their work.

*image credit: Flickr

Part 4: Catalog Providers Hate Gift Cards because Your Employees Love Them!

Continuing my look at why employees love gift cards in a reward program, we saw how, with the introduction of gift cards into an old catalog selection – within weeks 90-99% of employees will select the gift cards! That’s exactly why catalog providers hate them, because your employees love them!

Let’s look at one more of the reasons employees play back to us as to why they love gift cards. Employees tell us…

“I love BEST VALUE for my money, not being price cheated.”

Let’s face it. We’ve all had this experience of selecting an item from an “Incentive Boulevard” catalog. I spotted a portable BBQ last summer in my bank card’s loyalty program catalog. Great! At least it was something I liked and needed, a portable gas grill, for 30,000 points or, as I calculated, $300 in real value. I took it! Only later that night, a simple price search online revealed at least 10 major stores that retail the exact same BBQ from $199 to a maximum of $260. What’s up? Am I a sucker? I felt cheated –exactly the opposite feeling to what the designers of the bank’s loyalty program were trying to encourage.

Is this how you want your employees to feel when they get your company recognition award? Of course it’s not! Yet this is exactly what continues to perpetuate today through the old school practice of using points interlinked with hyper marked up items that is rampant among catalog providers.

Why is this the case?

Here’s how it goes. You want an employee recognition program with a rewards budget of about $100 per head. The catalog companies say great, we’ll do that for exactly your $100 budget. Perfect … but then the games begin! You need to know how to play the shell game now. Before you know it, between operating fees, fulfillment fees, shipping costs, communications, customer service costs, technology support fees and “a little margin” are built in, your employee is only going to end up with $69 of that $100 you had in mind.

Not a problem the catalog companies will tell you, because it’s all about “perceived value pricing” to the employee – so long as the employee thinks the item is worth $100, everyone is happy and your employee essentially pays for your program costs. We’re both winners! Right?

Wrong! This approach worked pretty well for decades, from about 1901 to 2001. But now “perceived value pricing” has a real, substantial problem that is not going away soon – the internet – and the possibility for the “perfect information” it brings to your employees. Your employees are savvy shoppers, and they will check the price of every item they select from any catalog. If, like me, they feel cheated and over-charged, you will create exactly the opposite motivational effect to what you were hoping for.

But you might say, our catalog company offers a price guarantee! We are assured we get all the items at MRSP or less. This is the shell game again my friends! Ask the wrong question, and you shall get the wrong answer. Perhaps you asked the cost to your company of certain items – yes, it’s $69 cost, same as Amazon sells the item for. This sounds good. But hold on. You should have asked: what’s the cost to my employee, after all of the fees and charges have been factored in? Ah, well that’s 10,000 points or $100 of cost to your employee, for an item that they soon know is only worth $69. That’s why employees tell us using catalogs leaves them feeling price cheated. More especially, they feel your company is being cheated too. That’s also exactly why they love gift cards – a $100 value is clear and transparent, I go shopping myself, and I get exactly my $100 in value.

Beware my friends, the old tried and tested techniques from 1901 to 2001 need a rethink, unless you plan on training your HR support team in taking employee price complaints.

For those just joining the GloboBlog community today, these are the links for the past related posts in this series:

Part 1: Catalog Providers Hate Gift Cards because Your Employees Love Them

Part 2: “I love REAL CHOICE, not pretend choice.”

Part 3: “I love that they are LOCAL to where I live, not one size fits all."