CEO Values Critical to Employee Loyalty and Motivation

Let me ask you a question. How well do your senior leaders model the behaviors they request of their teams?

SmartBrief on Leadership recently asked just that question in a poll on their site (results at right). Sadly, less than 10% answered, “all the time.” The greatest percentage, 40%, said, “most of the time, but have their moments when they don’t.” And the next greatest answer at 32% said, “sometimes, when it’s easy to walk the talk.”

It’s that slippage – those “moments when they don’t,” those “when it’s easy” efforts – that’s killing employee loyalty and motivation according to research reported in Knowledge@W.P.Carey (the School of Business at Arizona State University):

“Mid-level managers are likely to rally around their company only if their CEO truly values the interests of the organization and is not motivated primarily by self-interest, according to the study by W. P. Carey School of Business Management Professor Anne S. Tsui, Ping Ping Fu of the Chinese University of Hong Kong, Jun Liu of Renmin University of China, and Lan Li of Chinese Entrepreneur Survey System. …

“In companies in which chief executives with transformational leadership behaviors valued above all the interests of the company and people -- both inside and outside -- middle managers demonstrated strong commitment to the companies and said they were unlikely to look for jobs elsewhere. But where transformational CEOs placed the highest values on personal fulfillment, the middle managers below them were less committed to the firm and more likely to seek positions outside the company.”

I’ve written before about the need to help employees align their personal values with the company values, and this never more true or necessary than in the CEO spot. A CEO who leads the company from a place of transparency, directed by his or her own personal values to the extent that those values permeate the organization to guide and direct its success as well, is the CEO whose team will remain the most loyal, most motivated and most productive in delivering what the CEO expects and needs for company success.

I’m lucky enough to have spent the last 10 years of my career working for such a CEO, Eric Mosley, who is also the co-author of our recent book, Winning with a Culture of Recognition. Eric built Globoforce on the same principles and best practices we share with our clients – frequently, timely, specific and meaningful recognition and appreciation of people when they demonstrate our company values and contribute to our success.

What about you? Does your CEO lead from a place of honest, consistent alignment of personal values with the values of your organization? How does that affect your loyalty to the organization?

Free Webinar: Recognition the KPMG Way: Driving Employee Engagement and Success

Happy Thanksgiving, everyone!

Do you need to unify your culture? If you want to hear tips and strategies for doing just that from a peer, join me and Sara Turner, the head of employee benefits and wellbeing for KPMG UK, Tuesday next week, November 30, 8:00am PT/11:00am ET/4:00pm GMT.

During this live, interactive webinar, Sara will be sharing how she led the implementation of a strategic recognition program that helped KPMG reduce costs while providing employees with a proven tool to recognize the positive work around the company.

Key topics we'll be sure to cover include:
• How KPMG increased recognition without increasing their recognition budget
• Why KPMG selected strategic recognition to help foster stronger employee engagement and performance
• How KPMG generated internal excitement and increased employee participation

Register for the webinar today! Feel free to send me your questions early, if you like.

A Culture of Recognition and Loyalty

In my last post I wrote about the different kind of cultures that can arise in an organization.

So, what kind of culture works best? That depends on your goal. If all you care about is cranking out widgets and aren’t particularly concerned about the high-turnover of employees who perhaps are not passionate about widgets, need some challenge in their work, or can’t abide another day of “meaningless” work, then worrying about your corporate culture is probably not high on your priority list.

But if you’re concerned about employee loyalty – keeping those employees who are committed to the success of your organization and that of your customers – then your best cultural option is recognition. In fact, recent research by Monster (as reported in WorldatWork) found that “being recognized for good work” consistently ranked high as a reason why employees would remain loyal to an employer.

"Globally, having a great boss and co-workers, challenging/interesting work and gaining recognition all recorded results at 20% or above, demonstrating that, for many workers, there is more to their loyalty than financial rewards.

"Respondents in India (31%), Italy (27%) and Ireland (24%) rated gaining recognition as the foremost reason for them being loyal to their employers."

Clearly, employees need and want recognition for their efforts. It’s easy and cheap to give and can save you millions in turnover expense.

I would also like to take this opportunity, in honor of tomorrow’s American Thanksgiving holiday, to give thanks and express gratitude to my colleagues and team members who make my work more fun, more interesting, and certainly more exciting every day of the year. And to you, the readers of this blog, thank you for your insights that have continued to educate me and contributed to my growth as an employee, a manager, and most importantly, a person.

What’s Your Company Culture?

I’m sure it comes as no surprise to any of my readers that I care quite deeply about company cultures. Indeed, I just co-wrote a book about it with culture right in the title – Winning with a Culture of Recognition.

I’m always interested when other write about company cultures, especially writers I respect. One such person is Chris Ferdinandi of the Renegade HR blog. He recently wrote on Pockets of Culture, saying:

“I’ve noticed that every organization has at least two (often three) levels of culture:
1) Organizational Culture. This is what most people think of when you talk about workplace culture. What’s it like to work at Acme Corporation?
2) Locational Culture. If your organization has more than one location, each one will often have it’s own culture. It fits into the bigger organizational culture (usually), but has it’s own unique quirks and idiosyncrasies.
3) Team Culture. Within each building or location, culture varies even further still by the team you’re on. The HR culture is different from the marketing culture, which is different from sales, and so on. It still falls under the cultural umbrellas of the organization and location, but the team culture is unique.”

Chris and I engaged in a comments discussion in which I explained my position that the trick is doing everything possible to keep all three cultures in alignment with the overall desired company culture. Sure, there’s good reason for sales (more risk taking) to develop a different culture from finance (more risk averse), but still remain in the bounds of the greater culture of, say, high integrity/ethics.

We believe the best way to encourage the necessary latitude but apply the equally necessary constraints is through your company’s values — but by bringing them to life in the everyday work of employees through strategic recognition. You do this by recognizing employees — regardless of team or location — when they demonstrate the behaviors that reflect the values the organization has deemed important company success.

What’s your take on the various cultures that can arise in an organization? Does your local or team culture align with your organizational culture? If it doesn’t, is that a good or a bad thing?

The Four “Anys” of Recognition

There are a lot of good people writing very well on the topic of how, when and why you should express your appreciation to colleagues, peers and subordinates. I occasionally like to feature them here, like these two writers whose recent work I admire.

Reba Spencer in the Toronto Globe and Mail offered sound advice and practical steps to “Rally the Troops in an Age of Austerity”:

“Without at least periodic positive feedback, employees may easily become unhappy, unmotivated and unproductive, because it's difficult to know the value of your contribution without feedback. And what goes for managers is also true of co-workers. While praise is often thought of as a “top down” activity, it shouldn’t be: Everyone should feel free to praise their colleagues – and their managers, too.”

And Scott Eblin offered excellent instruction in his Next Level Blog in “Why and How Leaders Need to Say Thank You”:

“Make it fresh: While revenge may be a dish best served cold, a thank you isn’t. When someone helps you out, thank them in the moment or as soon as you can.

“Make it personal: Acknowledge the time and effort your colleague spent to help you out. Just like you, they’ve got 24 hours in a day and no more. They made a choice to put off something that was important to them to give you assistance. Let them know that you appreciate that.

“Make it clear: The research shows that a thank you means more when the person being thanked understands the value of what they did. Make it clear in your thanks how what they did helped you.”

Reading their insights prompted this simple “Any” approach to recognition and appreciation:

1) Anyone Gives – Anyone, at any level, has the ability to notice, appreciate and formally recognize anyone else – both up and down the chain of command.

2) Anyone Receives – Anyone, at any level, with any performance history has the ability to receive recognition if they’ve done something worthy of it.

3) Anytime – There is no “schedule” for recognition, such as the annual Employee Appreciation Day. People deserve to be appreciated for their efforts in the moment – or as close to it as feasibly possible.

4) For Anything Deserving Recognition – Any behavior, action or result that you’ve pre-established as worthy of recognition (especially tied to your company values and strategic objectives) should be recognized and honored.

Did I miss “any”thing?

Can We Stop with the Carrots Already?

One blogger I enjoy in the incentives, recognition and rewards space is Paul Hebert, the author of the Incentive Intelligence blog. A couple weeks ago, Paul looked back at old posts of his to see how well he predicted the future. I most enjoyed his post in which he came out “steadfastly against” the use of carrots as a symbol for motivation. As he said in the original post:

"I purposely don't link to these books or the site because I don't want to continue to promote carrots as a motivational metaphor. I don't know about you, but the titles listed above reduce a complex set of principles and activities down to a much too simple instinctual metaphor - and insult the audience.

“I'm sure that some of the sidelong glances the motivation industry gets from its own clients are driven by the continued use of this metaphor. The concept of carrot and stick creates and aura of duplicity and manipulation - when in reality we're talking about alignment of values and goals. I don't believe incentive and recognition programs manipulate as much as "guide." I'm sure someone will make the point that those words may have distinction but no difference. Let them - I respect my audience and in my mind there are big differences."

I couldn’t agree more. Many months ago, I also wrote on this topic, expanding on Harry Levinson's Jackass Fallacy: Think about the carrot and stick metaphor for motivation. When you picture that in your mind, what’s between the carrot and stick? A jackass. I don’t think about my team members as jackasses. Do you?

Paul suggests a couple of different metaphors: progress bar or a heart – tying into the need to belong and the need to see progress as real drivers of engagement and motivation.

What metaphor would you suggest? I find it hard to summarize in a simple visual. How to do you boil down an act of one person seeing, acknowledging, appreciating, recognizing and actively valuing the efforts and behaviors of another? Any ideas?

“Paying Bonuses” * When Will We Ever Learn?

It’s nearly that time of year so many in compensation and benefits have come to dread – end of year bonuses and the resulting litany of: “How come she got the same bonus I did? Clearly I worked harder.” Or “This isn’t as much bonus as last year and I did so much more.”

Bonuses, when used appropriately, can play an important role in a Total Rewards package. The challenge with them tends to arise when bonuses become an entitlement. For example, one article (requires membership) I read this week outlined how to structure a “money pool” approach to ensure your top performers get more of bonus budget. Another article argued the benefits of “paying bonuses” to those who would be hard-to-replace and not just top performers.

What’s wrong with these scenarios? Let me count the ways:

1) You’re adding so much complexity to what should be – and can be - so simple. If you create a strategic recognition program, that allows anyone to recognize anyone else at any time for actions or behaviors you’ve pre-established as deserving of recognition, then naturally your top performers are going to receive a larger share of the “recognition” pie.

2) You’re separating the moment/action/performance deserving of recognition from the recognition itself. People need to be recognized soon after the action or behavior deserving of recognition or they will lose any connection to the moment. Think of this as the puppy approach. Annual or quarterly bonuses can then reinforce trends in performance or achievement of long-term goals as they are intended to do as incentives.

3) You’re possibly “rewarding” people who don’t deserve a reward. Especially with the idea that people should receive a bonus just because they might be “hard to replace.” If they’d be hard to replace because they’re a consistently high performer who does great work, then they will receive frequent recognition in a strategic program. If they’d just be “hard to replace” because of their degree or credentials, then giving them a bonus only encourages them to rest on their laurels.

4) You’re cutting people off from recognition for good work who may deserve it even though they’re not in the top 10 percent. Focusing so intently on top performers negates the excellent work another 70% of your workforce does that is also deserving of recognition, if not as frequently as the top performers. Adding recognition to the total rewards mix ensures a much higher percentage of employees can enjoy the appreciation they deserve.

The solution is to keep bonuses to a reasonable mix within the Total Rewards package and balanced with true after-the-fact strategic recognition. What’s the right balance? The answer depends on the company and culture, but consider reducing bonus levels by 30-40% within the ill-performing programs and reinvest that in a strategic recognition program. Our clients have proven strategic recognition tends to out-perform cash bonuses in improvements to employee attitudes and engagement by a factor of 10!

Are You Recognizing or Valuing Your Employees?

Do you have an employee recognition program in place? If you do, what’s the purpose of that program?

The obvious answer: “Recognizing employees.” Now for the trick question – is recognizing your employees enough?

That sounds odd, indeed, coming from a person committed to helping companies implement truly strategic employee recognition programs. But this difference in “recognizing” and “valuing” is one of the things that sets strategic recognition apart from the much more common tactical programs.

Based on recent research conducted by Kenexa, they explain the difference this way:

“One of the more common inquiries on employee engagement surveys is some variation of, ‘I receive recognition when I do good work.’ The norm score across industries and countries for this question is about 55 percent favorable. Meaning, on average, about half of all employees feel they are appropriately recognized. At the best companies—the top 10 percent—the score is about 66 percent favorable. …

“Compare this to the inquiry, ‘I feel valued as an employee of this company,’ which is much less frequently asked (indicating that many organizations don't even see the value in asking about employees feeling valued). The average score here is 41 percent favorable, with 32 percent marking an unfavorable response. In other words, on average, less than half of the employees in a typical organization feel valued as an employee and one-third actively believe they aren't valued. …

“Recognizing an individual means successfully completing a project. Valuing someone is letting him or her know that you are glad he or she is on the team and that things wouldn't be as good without them.”

Adding the element of “valuing” to every recognition you give to an employee – indeed, requiring that “value statement” in every recognition – is what can make your program strategic. Getting this right at the very beginning of program planning and design is critical. That’s why we make it part of our first tactic: “Establish Program Goals and Objectives.” As we wrote in Winning with a Culture of Recognition:

“Your goals must be specific to your organization’s ambitions, market position, and challenges. Take time to define these goals clearly, for without them, recognition will not be taken seriously as a strategic initiative. … We often say they don’t teach recognition in management school, so most managers are ill-equipped to make use of it and must be trained. … Naming your program ambitions in detail also informs program design.”

The average employee doesn’t know how to properly recognize their colleagues, much less value them. Correcting this as a program goal will set you on the path to strategic recognition.

The Golden/Platinum Rule of Business

Given unlimited resources (and unlimited understanding from the powers that be), what would you want to change in your organization?

Knowing what’s broken, what’s not delivering desired results, what’s simply not registering high enough in employee surveys is the first step in fixing a problem. It’s also a key question in the first tactic of creating a strategic recognition program – “Establish Program Goals and Objectives.” As we discuss in our new book, Winning with a Culture of Recognition:

“Often the goals of a recognition program begin with the question, ‘What do you want to change?’”

If you fail to establish clear goals for a program before you begin designing it, then you’ll always lack direction for what you’re trying to accomplish and you’ll never be able to measure success. To figure out those goals, it’s often helpful to look at what you’d want to change, whether it be problems or deficiencies in an existing incentive, recognition or employee rewards initiative or in the overall culture of the company.

A post I wrote on “Employee Trust in Its Death Throes” sparked a good deal of conversation in the HR blogosphere. Charlie Green of the excellent “Trust Matters” blog took my post and dove into the issue much more deeply. I encourage readers to click through and read the comment stream to Charlie’s post. In my comment, I focus on something I’d like to see change in organizations:

“[Create] the new golden rule of business: Look out for each other’s best interests.”

Think about it. If we’re all looking out for each other’s best interests, then that means I’d have tens to dozens of people looking out for mine. And if we’re consistently doing that, it’s natural that we begin to care more about those we work with.

Skip Weisman, blogging on an entirely separate topic, introduced the Platinum rule:

“Do unto others as they would like to be done unto.”

This is much more difficult than the traditional golden rule of “do unto others as you would have them do unto you” because the golden rule presumes everyone wants the same things you do. The platinum rule requires you to step outside that comfort zone and actually come to know and care about what the other person wants, likes and needs.

But you can’t achieve the platinum rule unless you first adopt the new golden rule of business. Regardless, both are critical to goal setting in strategic employee recognition programs – look out for the interests of others, notice them, appreciate their efforts, and recognize them in the way they want to be recognized.

What about you? Did we get these new rules correct? Did I miss a “silver rule?”

Remembering the Tactical in Strategic Recognition Planning

Are you a leader or are you a follower?

That question is pretty easy to answer if you’re honest with yourself. This one is a bit more difficult. If you’re a leader, are you a strategic leader or an operational leader?

What’s the difference? I read an interesting article in last month’s Talent Management magazine that defined the differences this way:

“Strategic leadership is a critical building block for setting the tone and direction in an organization, but it is through blending with good day-to-day operational leadership practices that these strategies come to life.”

It doesn’t matter if you’re a strategic leader or an operational one. The importance lies in knowing what you’re good at or what the situation calls for. At some point, someone must set the strategy – whether for a project or for a company – and someone must lead the effort to see that strategy accomplished.

The same is true when implementing a strategic employee recognition program. As we outline in our new book, Winning with a Culture of Recognition, the very first tactic in building a strategic recognition program that can not only change your company culture but give you ability to directly manage it is “Establish Program Goals and Objectives.” The very first question to consider when planning a recognition & rewards program is:

“Why are you doing this? Without real, detailed goals, the practice of engaging and motivating employees can become ‘recognition for recognition’s sake,’ another old-school program lacking accountability and relevance.”

The rest of this week I’ll be diving into this topic of the importance of program goals and objectives more deeply. As the Talent Management article pointed out:

“Another area where strategic and operational leadership practices come together is in the creation of a high-energy, passionate work environment. The way leaders treat employees influences the way employees treat customers. Again, executives have to take a strategic and operational approach to address the job and organizational factors that drive positive intentions and subsequent performance. One without the other will not achieve the desired results.”

“Drive positive intentions and subsequent performance” – there’s no better way to accomplish just that than through recognition that deliberately and specifically calls out employees when they demonstrate those positive behaviors you’ve identified as critical to success. And there’s no doubt doing so influences and encourages them to perform similarly in the future.

As you dive into 2011 budget planning, are you considering the strategic as well as the organizational factors that lead to the work environment and company culture you desire?

Analytics & Employee Recognition: Finding the Recognition ROI

An article in the Harvard Business Review last month discussed the value of analytics in HR, describing how detailed analytics let, for example, Best Buy prove the value of a 0.1% increase in employee engagement at a particular store is an additional $100,000 in the store’s annual operating income. The article points out:

“Analytics takes the guesswork out of fresh management approaches. … Analytical HR collects or segments HR data to gain insights into specific departments or functions. … Data needn’t be perfect to be appropriate for analysis – just sufficient to understand trends that matter. HR can no longer confine employee data to its silo; organizations need access to those data to be successful.”

What kind of analytics do you look for from your Human Resources numbers? Beyond compensation and Total Rewards budgets, I mean? Turnover? Retention? How about employee engagement or employee recognition?

Do you think those last two are too “soft” to measure? That there is no value in measuring the amount of recognition given, to whom, or for what reason (beyond keeping track of the budget)?

We’ve proved that false in our new book Winning with a Culture of Recognition in which we discuss how properly measuring and reporting on recognition allows you to actively manage your company culture to drive greater employee productivity and performance on precisely those objectives you’ve identified as strategic, but always within the parameters of the values you consider important.

Back to that Best Buy result I mentioned in my first paragraph. What if that Best Buy store had increased employee engagement by 10%? What would that mean? Just by simple math, that one store could have increased their annual operating income by $10 million.

That’s no small change. Now keep in mind our customers regularly achieve employee engagement increases in the double digits after implementing strategic recognition programs based on our best practices. And they do it in less than a year after implementation.

What would adding $10 million to your operating income mean to you?

Employee Engagement's Place in Compensation Planning

As compensation planning swings into full gear, how top of mind is employee engagement?

In my post today on Compensation Cafe, I argue it should be. As I say in that post:

If the point of compensation is to pay employees fairly for work rendered, then doesn’t it makes sense to pursue efforts that increase discretionary performance above and beyond compensation?

Read more of my argument, including recent Gallup research on the latent fear, disengagement and consequentially worse performance in companies that have conducted layoffs or other actions during the recession.

Keeping What’s Important * Employee Recognition

It’s always good to be validated by the research. Thankfully, we did not see companies we work with contracting their recognition efforts in the recession. Most saw the importance of continuing employee recognition programs as critical to their ability to maintain employee morale and foster engagement in frightening and trying times.

Recent research from Accenture, “The High-Performance Workforce Study 2010,” found the same to be true for many organizations:

“Incentive, training and other related workforce programs at US and international companies held steady or were increase the past 12 months. … In the US, 39% made no changes to their recognition programs, while 28% increased them. For incentive compensation, the figures were 45% and 23% respectively. … International companies showed even more support for retaining or growing recognition, incentive and training programs, with just 15% and 19% cutting recognition and incentive compensation programs, while about 75% maintained or grew them.”

This report further supports Globoforce research and Towers Watson/WorldatWork research that companies on a global basis did not reduce or eliminate recognition and incentives programs on as drastic a scale as anticipated. This should help employers as they work to rebuild staff to pre-recession levels but may have to overcome a work atmosphere tainted by cost-cutting actions.

Globally, just over half of employers feel they are prepared to adapt and manage change in economic uncertainty. Strategic recognition is a powerful tool for change management, especially as a communications vehicle for changing strategic objectives and how employees can contribute to those objectives in their daily work.

The Benefits of Global Consolidation & Consistency

How disjointed are your HRIS systems? We’ve found the larger and more global an organization, the more likely multiple, unconnected systems are in place, whether they are full-blown HRIS systems or employee recognition programs. That doesn’t means smaller organizations are immune. Any company with more than office likely has disjointed systems, if not incongruent customs within offices or even between teams.

TowersWatson and WorldatWork recently issued research showing:

“As economic and business conditions improve, employers are restoring some of the losses in reward programs and addressing their EVP. They are also rethinking their long-term business, talent and reward strategies, developing greater integration and consistency within and between programs, prioritizing their investments.”

Focused on talent management and total rewards, the study focuses on the benefits of “introducing organization-wide consistency in reward and talent management programs” that offer a cohesive, easily comprehensible employee value proposition to all employees, regardless of where they are based.

“Today’s increasingly global organizations are balancing the need for local variation in reward and talent management practices with the benefits of global consistency.”

According to the research, key business drivers for global consistency in reward and talent management programs are:
• Alignment
• Cost management
• Efficiency
• Quality

Those are precisely the reasons for (and benefits of) our global customers pursing globally consolidated strategic employee recognition programs. Some companies found they had opened themselves to great risk by not fully knowing or tracking where recognition was taking place, largely by well-meaning managers who would give an employee a “recognition gift” and then put the cost through an expense report – untracked and untaxed according to proper country requirements. This doesn’t even bring into consideration the dramatic savings possible (up to 50% at our clients) through efficiencies gained through consolidation. As the research cited above says:

“Organizations with globally consistent programs are more effective. There is a strong relationship between global consistency and effectiveness.”

If you’re considering expanding, adopting, or consolidating your employee recognition practices across multiple countries, or even multiple offices, be sure your provider can deliver the results you want on such a scale.