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?

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