Observations from the 2011 HCI Human Capital Summit

Recognize This: Can recognition help build a great culture?  Dan Pink & Facebook think so!

I’m at the HCI Human Capital Summit this week in Atlanta and have been really taken by two presentations.  First, Dan Pink, whom I love for his passionate exploration into the new truth about what motivates us at work.  He once again set down his manifesto of what’s required for a win-win relationship between corporation and employee. Dan’s agenda of Autonomy, Mastery and Purpose is set to create better performance and personal satisfaction in equal measure. He tells how “now that” instead of “if then” rewards and feedback plays a vital role in this, helping to create the culture that sustains these core motivators.

Without any formal overlap, I earlier saw a presentation from Stuart Crabb, Director of Learning and Development at Facebook, and couldn’t help but think about how all of the HR strategies he described where so aligned with Dan’s mantra. He spoke about freedom to choose work, a strengths-based HR philosophy, and of course lots of passion!  A real eye opener about Stuart’s presentation was research he shared about how Facebook finds that their high proportion of GEN X and Y workforce. These groups are in need of constant praise and constant feedback, with GEN Y having a particular preference for co-worker recognition. This is such the case at Facebook that they have actually abolished the annual appraisal and instead rely on a constant feedback and a constant “Thanks” recognition mechanism. 

Not to mix the presenter’s words too much, but it seems like Facebook has really have figured out that constantly recognizing and feeding back on mastery, purpose and autonomy creates a company culture that feeds our true motivators.

I Got More Money in My Paycheck?

Recognize This: Cash rewards go unnoticed, leaving no impression on employees of your appreciation for their efforts.

To my American friends and colleagues: Did you notice the extra money in your paycheck? According to an article in last week’s Boston Globe newspaper, most didn’t.

“‘What?’ said the professor waiting for a train at South Station. ‘I get extra money?’ asked the mom with her son. ‘I didn’t realize that,’ said the guy getting his shoes shined. Three weeks after a payroll tax cut took effect, few people are noticing the extra money — $40 a week for some, $10 to $30 a week for most — that Congress put in their paychecks.”

As I’ve written many times before, cash rewards do nothing to reinforce the messages you’re trying to send. Employees often don’t even notice it in their paychecks. As one client told us after surveying their 300,000+ employees, of those that even realized they’d received a cash reward, 29% used it to pay bills and 18% didn’t remember how it was spent. Is that what you were hoping to achieve?

Or, as one Globoforce colleague of mine recently related:

“At my last company, I got a $500 bonus directly into my direct deposit account. From the time I left work to the time I arrived home, my wife saw that bonus in the bank account and went shopping with the girls. I never even saw it.”

Do you want your employees to actually notice and value the appreciation you give them? Find another way than cash to recognize them.

Why Cash as a Reward Won’t Change Your Culture

Recognize This: How you reward employees is a key indicator of underlying company culture.

We’re often asked why we don’t encourage the use of cash as a reward in strategic employee recognition program. The simple answer is: cash = compensation. Rewards must use a different “currency” than cash or employees will lump your “rewards” into their paycheck, guaranteeing it will become an expectation.

A better question to understand is: What kind of company culture do you want? A culture of appreciation or of compensation?

Your culture is built on the interactions and conversations that happen every moment of every day between your employees. Building that culture begins by encouraging recognition between and by all employees, yes, but it also builds on the rewards employees can enjoy that links the behaviors and actions they were recognized for to the memorable rewards they choose.

When that reward is cash, you can’t – as our client Symantec explained – have a conversation with colleagues, “Oh, I got $500 dollars.”

But when the reward is in a form that gives the flexibility of cash for limitless options, but with a result that employees can share and talk about with each other, you build a culture of appreciation. “Yeah, I went to the spa and had the most relaxing and rejuvenating massage treatment.”

Those are the conversations happening every day in the hallways of Symantec, reinforcing just how much the company values and appreciates the good work their employees do every day.

What kind of culture are you building in your organization?

Bonus ≠ Compensation. Stop Confusing the Two

Recognize This: Compensation and bonus are two different things, like oil and water. Stop trying to mix them together.

UK press reported last month that the banks find themselves between a rock and a hard place. On one side, the country is operating under deep austerity measures, banks are being accused of not lending to businesses enough, and London banks plan on paying out £7 billion in bonuses (or maybe they’ll reduce it to £4 billion). On the other side, if the banks agree with each other to cap bonuses (which are seen as a critical recruiting/retention tool), then they could be prosecuted for competitive collusion.

How’d the banks find themselves in this mess? Simple. Like on Wall Street in the US and elsewhere in the world, they confuse bonus with compensation. One banker is quoted in the article:

“There’s no chance that the big US investment banks will follow our example, which means that business and good people could leave London for New York or elsewhere if we’re seen to be paying less than the market rate.”

Did you catch that? “Paying” less than the market rate. Bonuses are not pay. Bonuses are given for achieving stretch goals, going beyond what is expected. Bonuses are not base compensation. They should never be an expectation.

The only thing your employees should be expecting to receive is a paycheck for work rendered. Anything beyond that – bonus, incentive, recognition, reward – is never “paid.”

Does your organization confuse bonus and compensation? Would you rather receive less compensation and hope for a bonus or would you rather know your base compensation is fair and reasonably equitable for the role and anything on top of that is icing?

“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!

Oxymoron Challenge * “Bonus Guarantee”

Oxymorons are fun. There are the obvious ones – jumbo shrimp, airplane food, military intelligence. And then there are the ones you stumble across. Like “bonus guarantee.”

After the fallout from the recession and the reaction to ridiculous bonuses, not to mention the “soul crushing” structure such programs can take, I see hopeful signs that reliance on cash bonuses as the primary means of recognition reward is diminishing. One such sign was reported by WorldatWork based on data from Mercer:

“Almost all participants [30 financial services organizations from Europe and North America] noted that they have changed the weighting of components in their pay packages. 70% have increased base salaries while decreasing annual cash bonuses (94%). …

“94% of respondents have made or plan to make changes to their annual short-term incentive (STI) plan, commonly known as "the bonus." One-year bonus guarantees are used less than in 2009, with 57% of organizations having limited or eliminated multi-year bonus guarantees.”

I’m glad to see that base salaries are rising. That is necessary to counter what the CIPD reported on two years ago:

“Bonuses have become a recruitment and retention tool rather than a reward for good performance. There are so many corporate governance issues around permanent salaries that the only ‘wriggle room’ has been bonuses. That’s why in recent times there have been sums that have been seen as excessive, and the phenomenon of people asking for guaranteed bonuses – degrading the principle of paying for performance.”

It’s the comment in the second paragraph of the Mercer results I quote above that really gets to me, though – “bonus guarantees.” I’m also glad to see these continuing to fall, counteracting (I hope) what Bloomberg also reported on:

“More Wall Street employees received bonuses for 2008 than were expecting to, though many remained unhappy with them. … What this shows is the bonus culture is very deep set in the securities industry. There’s an entitlement culture amongst a number of people in the industry, which I think in the current industry is very misplaced.”

That’s why I argue so passionately against cash-based bonuses. They quickly become an expectation and an entitlement. Pay employees a fair wage. Recognize them with “After/That” appreciation and rewards, which are a surprise for work well done in alignment with your values and never an expectation. But stop playing around with the oxymoron of “bonus guarantees.”

Strategic Recognition * The Fastest Path to Talent Management Metrics that Matter

What do you think? Are we in for a double-dip recession? Seems to me that the economic pundits are waffling hard on this topic. In a Bnet article, Margaret Heffernan seems to think so, but she offers great advice for what to do in a double-dip – grow! Click over to read her case study of Timken and how they, “Invest when times are tough so we can capitalize on those investments in the good times.”

A Towers Watson survey found many US and Canadian companies are following this advice, at least in terms of their investment in “talent/performance systems,” citing these as the most critical HR Service delivery issues in 2010 (quoting):

• Talent/performance management systems (42% versus 35% in 2009)
• Streamlining processes/systems (35% — unchanged from 2009)
• Increased involvement in strategic business-driven issues (27% versus 23% in 2009)
• Defining human capital metrics and dashboards (22% versus 17% in 2009)

It’s great to see companies beginning to invest again, but it’s still important to remain frugal and wise in those investments. That’s why I advocate strategic recognition as the fastest, most cost effective means to talent management data. Within just months (not years), you can track and analyze trends in performance against your key objectives and values based on the wisdom of crowds through recognition, you can streamline processes by blending recognition and performance management metrics, you can create on-the-fly dashboards that report on the metrics your CEO and CFO care about, which increases your contribution to strategic business issues – and you can prove it.

Stop investing in talent management and invest in your talent instead. How are you beginning to invest?

Irrationality * It’s What Makes Us Human

Irrational. Some days, does it seem like that’s the best word to describe the workplace? I tend to like Dan Ariely’s research on irrationality. Initial research showed, “In eight of the nine tasks, the promise of a bigger bonus actually significantly decreased people’s performance.”

Paul Hebert recently reviewed Ariely’s latest book, The Upside of Irrationality on his i2i blog. Paul highlighted this very interesting twist on the impact of cash bonuses:

“In the experiment they told the participants that they already earned the 5 month bonus – and gave them the money, but told them they would have to return a portion based on their performance. If they maintained a certain level of performance they could keep the 5 months pay – but if they fell below they would start to “lose” their money.

“In this instance the negative effects on performance were even more pronounced – the first participant was so nervous he couldn’t complete the tasks and the second, when he started to fail immediately – ran out of the experiment with the money. In other words (my opinion) his loss aversion to such a high reward caused him to act in irrationally – to the point of stealing. Sound familiar?

“When awards are too big – and too expected – rational thinking is short-circuited.”

Why was the study structured this way? Because cash bonuses become an expectation. People begin to factor it into their “earned income” budgets. They expect to receive those bonuses at the end of the year, and the threat that the bonus might not materialize is enough to trigger deviant behaviors.

I can’t say I’m surprised by the findings. And that’s why I so strongly advocate against “If/Then” rewards – if you do this, you’ll get that. We’re in the business of “After/That” recognition – a surprise you’re not expecting when you do a job well. A sincere, specific appreciation of those efforts, but never something that you can come to expect.

Irrational. We’re human. To some extent we’re all irrational. But our job as HR pros in the workplace is to ensure that we’re not actively feeding that irrationality to the detriment of our firm.

Cash v Non-Cash Rewards * Why Does This Debate Keep Dragging On?!

“Just show me the money.” vs. “Nobody notices or appreciates the work I do. Why should I bother?”

Just another way of saying cash vs. non-cash rewards. Let me make this really simple. Cash does not motivate, it does not recognize, it does not appreciate. Cash compensates. Pure and simple.

And that’s not a bad thing. The media spin on recent research from Mercer tries to make it seem that way with headlines that scream: “Forget non-cash compensation: employees say ‘show me the money.’” If you read more deeply into the article you see this: “Leading reward elements perceived to have the strongest impact on employee retention and engagement for 2010 are base salary increases (41%)…”

This isn’t surprising. Quite a few companies need to increase base salary to return employees to level they were earning in 2008, much less give them a raise. That’s the realities of recovering from the actions taken in the recession when salary cuts and wage freezes seemed the norm.

But that doesn’t mean non-cash employee recognition and rewards will fall off in the coming months. As I said in my post on Compensation Café on Wednesday, you must build a solid foundation with appropriate, fair and livable base compensation. But once that’s done, you must then add the polish with recognition programs.

Another recent study from the Boston Consulting Group and the World Federation of People Management Associations showed that executives believe these areas are especially weak at their companies:
• Structured career management that rewards appropriate behaviors
• Recognition beyond compensation

The executives are right, buy why should they (or you) care? Another “SmartPulse” survey conducted by SmartBrief on Leadership released just two weeks ago asked: “What’s the most satisfying reward you can receive for a job well done?”

Cash seemed to win out at 30%. But when you add together 30% for “Praise and expressions of thanks from my team and customers,” 28% for “A handwritten thank you note from an executive/leader I respect,” and another 8% for “Public accolades and awards at a company awards ceremony,” that 66% craving appreciation in some form is more than double those who vote for just cash.

If you think just a couple percentage point raise is going to convey to your employees any level of appreciation, respect and desire to keep them (and their talent) loyal to your firm, think again.

What Goes Around * Stop Incenting Bad Behavior

As a blogger, you meet many interesting people and make several acquaintances through the blogosphere that you might not otherwise. One such relationship for me is with Doug Shaw, founder of What Goes Around Limited. Note the link when you visit his site – Stop doing dumb things to customers. That’s Doug’s attitude. We all know what we SHOULD be doing… so just step up and do it already! I like that attitude. It reminds me of a word I learned from an American colleague recently – it shows some “moxie.”

In a post last week, Doug went on a tear after hearing about a plan to restore short term financial incentives (bonuses) after all the mess they caused in this recession. Doug says it better than I can:

“OK, so having seen first-hand the value destroying, anti-collaborative behaviour that short term financial incentives drive, we’re gonna do it all over again. With a twist. We’ll let these sweet bonus carrots dangle a little further away. That way folks will have to focus even harder on the carrot, and from there I put it to you a stronger focus on the value destroying behaviour necessary to bag the carrot will emerge. Not happy? Furious more like!

“The case to ban financial incentives was one I first became really active on back in December 2008. We ran a workshop with some bright enthusiastic minds in and around BT. The purpose of coming together was to uncover the most effective ideas needed to improve customer service. Banning financial incentives was an idea agreed on by all in attendance. There were other exciting ideas around clearer dialogue and communication but it was the “don’t incentivise me, just pay me” discussion that flared. Since then I’ve looked in all kinds of corners (University of Miami, Harvard, the studies of Dan Pink to name a few), and discussed with all kinds of folk. And I find lots of useful practical examples of why these bonuses don’t work. I’ve pulled this journey together into a white paper (not a white riot) which you are welcome to take, read, argue with, whatever you like. As well as examples, it cites behavioural references which you may find useful.

“So how the hell am I gonna calm down now? Well I kept on reading and looking and I found two further interesting conversations. The first, called “You’re Getting a Bonus so Why Aren’t You Motivated?” was started on the Harvard Business Review by Eric Mosley, CEO and co-founder of Globoforce.”

Doug’s white paper is an excellent collection of examples on how poorly structured incentive programs simply drive bad behavior. I suggest giving it a read along with Eric’s Harvard Business Review article. Then come back and tell me: Are cash incentives worthwhile?

Is There Any Hope for Pay for Performance?

Pay for performance seems to be much in the news and HR trade publications lately. The general take-away from all of the articles is that pay for performance doesn’t work (or at least doesn’t work as well as anticipated or desired) but everyone does it anyway (to some degree) because everyone else is doing it.

A May article from Talent Management magazine tells us:

“The reason the pay-for-performance concept has been so disappointing is because the human aspect of motivating desired behaviors is not as cut and dried as the pay-for-performance approach generally implies. Most organizations simply don't know how to successfully define the performance they want, so organizations end up paying for failure rather than for performance.”

Paying for failure rather than performance – that’s what happens when you fail to clearly define, in an achievable and measurable (not subjective) way, what it is you expect people to accomplish. A June article (“Channeling Malcolm Gladwell on Pay Systems,” requires subscription log-in) from Workspan magazine cited the research on this:

“In the 2005 Annual Review of Psychology, two organizational psychologists said the following regarding the effectiveness of merit plans – which does little to increase one’s confidence level for using them: ‘Although merit pay continues to be the most widely used pay-for-performance program (especially among salaried employees), there is surprisingly little evidence about the performance implications of adopting, or not adopting merit pay programs.’

“In addition, three practitioner surveys show that performance management and pay-for-performance plans have considerable room for improvement.

“Two major surveys show that, in general, financial incentives are outranked by organizational, career and job-related factors for improving employee engagement and motivational levels. The 2007-2008 Towers Perrin Global Workforce Study found no financial incentives among the top 10 drivers of employee engagement. A 2009 McKinsey & Co. report found that three noncash motivators, including visibility with top management, are more effective motivators than the three highest-rated financial incentives, including increased base pay and cash bonuses.”

And yet… This month’s issue of Workspan includes an excellent case study (“Performance Management Rewired for the Recovery,” requires subscription log-in) of just how Intuit has made pay for performance work. Some Intuit methods that are far different from traditional (and often failed) pay for performance management approaches:

• Replacing “meets/exceeds” language in performance ratings with “delivering the business impact it needs”
• Using everything to reward performance – evaluation, compensation, recognition and opportunity
• Ensuring top performers are signaled, through various mechanisms, of their star ability

My point? Pay-for-performance has a role to play in the HR toolbox. But it’s not the only tool as it seems to have become in many organizations. It is but one of many methods.

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.

Indicate Respect with Money * Indicate Value with Recognition

There seems to have been a flux in excellent books on the power of recognition to motivate and engage hitting the market in recent months. Two I recommend are Leading Outside the Lines: How to Mobilize the Informal Organization, Energize Your Team, and Get Better Results by Jon Katzenbach and Zia Khan and The 17 Rules Successful Companies Use to Attract and Keep Top Talent by David Russo.

I was first turned on to Leading Outside the Lines in this Forbes article in which the authors spoke specifically about why money is not a motivator.

“Emotional sources of motivation are more powerful [than money], and they are best conveyed informally in an organization through the respect of peers, the admiration of subordinates, he approval of one’s personal network and community and the like. Money becomes the default motivator because it is measurable, tangible and fungible.”

I think the authors are right. People designing employee reward programs often default to money as the primary reward mechanism because it seems easier – easier to distribute, easier to report on, easier to make sure the employee gets something they want and not another toaster, BBQ set or watch. The solution is to make strategic recognition rewards as measurable, tangible and fungible through a delivery model that makes sense globally. Local gift cards/certificates to merchants around the world is highly fungible but ensures the recognition recipient choose a truly aspirational and rewarding experience or item. Backed with our technology, such a delivery model is highly measurable on use, adoption and perceived value.

One chapter in particular from David Russo’s 17 Rules book was particularly powerful for me – “Cheerlead: The Magic of M&Ms.” In this one chapter, David hits on several important points of strategic recognition: frequent, on-the-spot recognition, authenticity in recognition, again on why cash is not motivational, and the bottom line value of recognition – as proven at SAS (currently No. 1 on Fortune Best Companies to Work For list).

I particularly liked how David dispelled the money as motivational myth. As I’ve said before, of course you must pay people an appropriate, living wage. But once people are paid properly, money as a motivator disappears. David puts it this way:

“The metric of the success was the employees’ response. If the employees wanted to be in the workplace, we were successful in our obligations as leaders. If the work environment was truly positive, we also noted that the workers – when paid good wages and benefits – didn’t focus on wages and benefits as the primary indication of whether they were valued.”

That’s what employees are truly seeking – an indication that they are valued. Respect them and their efforts with a proper wage and appropriate benefits. Then show and tell them how much you value them and their efforts with clear, consistent and frequent recognition of their behaviors and actions that demonstrate your values and help achieve your objectives.

Trends in Recognition Program Rewards

A recent issue of Incentive magazine offered interesting insight into trends in “incentive” programs and 2010 expectations in a reader forecast survey.

Results of the survey found that readers expect more budgets to be cut than increased in 2010, “but companies that maintained programs in 2009 say they gained a competitive advantage.” In answer to the open-ended question on reader plans to maintain and improve motivation and loyalty this year, a top response was “More recognition, both private and public.”

The study in particular looked at travel, merchandise and gift card programs, finding that:

• In 2010 budgets, as compared to 2009, gift card budgets increased or remained unchanged more than budgets for travel or merchandise.
• In terms of number of programs that will be run in 2010 vs. 2009, gift card programs increased more than any other while travel and cash programs were eliminated more frequently.
• For plans to reduce or eliminate travel, merchandise or gift card programs in 2009, gift cards once again were lowest across the board.

What can we conclude from these findings? Companies are finding that programs based around a reward delivery model of gift cards deliver the most return on investment. This is especially true in Globoforce programs that do not require the end-user to figure out what cards to offer in various regions of the world, or how to structure multiple use cards. Our Ex*change Network of global shopping, dining, travel, entertainment, adventure and charity providers lets your recognition recipients easily select the Gift of Choice most relevant and personal to them with the least amount of adminis-trivia on behalf of the company.

The Perils of Bad Research

I was appalled to see the structure of research that was recently released concluding that CFOs believe bonuses were the most effective way to acknowledge a job well done.

The research was poorly constructed with pre-directed selections (bonus, time off, department lunch, tickets to events) that were very specific but no broad option such as “recognition program”. From such a narrow selection of unrewarding rewards, no wonder CFOs primarily chose “Bonus” as most rewarding.

As another comment on the research pointed out, “bonus” itself is ill defined as some would consider non-cash (tangible) rewards to be bonuses as well.

Interestingly, the same organization released a survey a year ago that found:

"68% of CFOs said they are implementing strategies to boost the moods of their teams. The survey found that the most common way businesses are attempting to raise workplace morale is through increased and improved communication (37%); while 15% are enhanced employee recognition programs.”

Clearly this was a much more properly structured study. Our own research found that nearly all respondents (CFOs and HR managers) agreed that HR and Finance need to be on the same page, only 58 percent of respondents say this is the case in their organization. Even though best practice suggests that Finance is the business unit that should require ROI, few survey respondents (36 percent) indicated that Finance was taking a leading role in HR processes, programs and technologies.

My caution to you, be careful how you read research.

Excellent Recognition Guidance from the Corporate Executive Board

The Corporate Executive Board (CEB) recently ran an excellent three-part series on recognition and reward best practices. Highlights are below, but be sure to click through and read the full series.

From Beyond the Bonus: Four Ways to Recognize and Reward with Little or No Money:

“There has been much written about the limitations of salaries and bonuses to motivate people to work hard and produce results. If it isn’t all about money, what is it about? Most management experts emphasize appreciation, recognition and building a sense of pride over increasing monetary rewards. This is not only good practice but for most companies these days, it is also a necessity.

“It’s a sad fact of work life that most leaders don’t thank their employees enough. A simple thank you goes much farther than you think, especially if it is connected to a job well done and delivered authentically. Acknowledging employee accomplishments and good behavior through meaningful words or gestures can boost employee’s emotional commitment. Be specific about the accomplishment and describe what helped the employee succeed.”

In Choosing the Right Approach to Employee Recognition, the CEB gives much the same advice we’ve been preaching for years:

“Even employers who are committed to recognizing and rewarding their employees have a hard time doing it right. Deciding what to reward and how is not easy, and that difficulty leads many employers to rely solely on financial compensation to motivate their people. … Here are five requirements for effective recognition and questions to help you evaluate your approach: connected to business goals and values, sincere, meaningful and adaptable, relevant, timely.”

In this post, CEB also points out the deviant behavior that can result from recognition done wrong. This is where the “strategic” component of recognition becomes critical. You must positively reinforce employees only for those actions that reflect the company values while achieving the strategic objectives. This approach ensures employees who, for example, increase productivity but do so by harming the environment will not be rewarded for their efforts. Values-based recognition is the key to ensuring employees display the right behaviors in achieving the company goals.

From Balancing “I” with “We”: Rewarding Teams and Teamwork:

“In a team-oriented environment, employers must pair individual employee awards with collective team recognition in order to effectively motivate teams. … Recognize team behavior and accomplishments. It’s one thing to recognize a team for achieving a particularly difficult goal. It’s another to hold them up for the way in which they achieved that goal. … Encourage employees to recognize peers. Recognition from superiors isn’t the only form of recognition that matters, or motivates. Knowing that your team thinks you’re doing a good job is important to keeping people engaged.”

There’s another aspect here as well. I was recently asked in another forum how to appropriately recognize in a situation involving a very long, complex project in which a team member had completed their portion of the work in its entirety long before the entire project came to fruition. My answer: recognize the individual in the moment for his great work and delivery that helped the team project stay on track. Then when the project is complete, recognize the entire team.

FORTUNE: Motivate without Spending Millions

I’m thrilled to share with you a feature article in April 12 issue of Fortune magazine: Motivate without Spending Millions."

The article discusses employee recognition, fully capturing our position that frequent, smaller rewards across the vast majority of employees is the best approach towards creating the most effective recognition program. This stance was validated in the article by Stanford Graduate School of Business Professor Hayagreeva Rao and the Corporate Executive Board, with additional narrative about our client Intuit’s employee recognition program.

Highlights from the article:

“The standard way of recognizing good performance – bonuses, new titles, high-priced quarterly giveaways to only the very top people – doesn’t motivate employees very effectively.”

“What really works, says Eric Mosley, Globoforce’s founder and CEO, especially for a budget-constrained company are small awards, all the time, to almost everyone. … By studying employee satisfaction and retention rates, he discovered that the best systems had similar and very surprising characteristics.”

“Counterintuitive though they may be, Globoforce’s theories hold up, says professor Hayagreeva Rao, an expert in organizational behavior at Stanford, who is studying whether motivational “juice” is a type of dopamine that is active by unexpected positive results.”

“Intuit VP of human resources Jim Grenier says that employee satisfaction with the recognition of their accomplishments is up four percentage points since the company changed its approach. ‘I’ve never seen bigger awards get such a bang for the buck,’ he says.”

To see the “similar and surprising characteristics” of the best systems and read the rest of the article, visit Fortune at this link.

"Resume Tsunami” Coming * Are You Ready?

Multiple research reports cited in a recent Wall Street Journal article see the job market improving and as a result some top talent already exiting organizations looking for a better opportunity.

Right Management found the same in a survey of North American workers who, when asked “Do you plan to pursue new job opportunities as the economy improves in 2010?” answered:
• 60% - Yes, I intend to leave
• 21% - Maybe, so I’m networking
• 6% - Not likely, but I’ve updated my resume
• 13% - No, I intend to stay

That’s 87% actively engaging in activity to leave your organization. Take a look around your company today. Which employees do you think are the 13% most likely to stay? I guarantee it’s not your top performers. Various studies on employee engagement so it is the most disengaged that stay in their current role.

Look at it another way: that's 87% of employees distracted by thoughts, daydreams or plans to leave your organization; 87% not fully focused on the task at hand, not fully engaged in helping you achieve your strategic objectives.

Now look at the employees through the lens of generation. What generation does most of your workers fall into? If yours is like most companies, the answer is Generation X (ages 32-44 years). Deloitte research found it is people of this generation most likely to leave with the research showing “37 percent of Gen Xers said they planned to stay in their current jobs after the recession ends, compared with 44 percent of Gen Yers, 50 percent of baby boomers and 52 percent of senior citizen workers.”

The Deloitte research further warns of a "resume' tsunami" once economic recovery begins, especially among Gen Xers, and notes that many executives were largely unaware of employee complaints unrelated to money.”

That bears repeating – “employee complaints unrelated to money.” Your employees are smart. They understand the need to cut back on expenses (of various kinds) in a recession. What they don’t understand and will run from is a company culture that does not communicate truth, recognize and encourage effort, and appreciate staff for the extra load so many have taken on in these last many frightening and confusing months.

What are you doing to prevent a “resume tsunami” in your organization - or even help employees engage and not fantasize about leaving? Are you just battening down the hatches and hoping for the best or are you proactively stepping up, communicating clearly with employees, recognizing them and their efforts, ) and engaging and aligning them with your strategic direction and objectives?

Tips for Creating a Corporate Culture

I write and speak often on the importance of fostering a culture of appreciation, creating a work environment in which employees want to engage. An excellent article in Kelly Service's Smart Manager recently offered “10 Ways to Create a Corporate Culture.” I’ll highlight just three key steps to creating that culture of appreciation:

“Publicly focus on the people, not the technology. As much as innovative technology can help employees excel, many remain wary. They often become uncomfortable or even fearful that state-of-the-art technology will make their jobs and themselves expendable. By focusing on your staff and their contributions, emphasizing that technology is simply a tool to help them, most employees feel a much stronger “connection” to the company.

“Publicly recognize employee performance, milestones, birthdays, etc. Don’t wait for major accomplishments to celebrate. Acknowledge all milestones, big and small. Your staff will not only appreciate these gestures personally, but they will tell their friends and potential future employees, too.

“Install non-financial benefit items that improve corporate culture. Personal days, caring for a sick family member days, employee-of-the-week (month, quarter, and year) awards, more prestigious workplace conditions, etc. prove to generate a positive effect on corporate culture and employee loyalty.”

I plan in the new year to write a good deal more on managing company cultures, but for now, my additions to these thoughts would be to clarify that it’s important to publicly focus on the people, period. Your greatest competitive advantage is your people – their innovation, their effort, their attitude – not the latest technological enhancement. Be sure they know that. Also, acknowledge all stellar efforts, big and small. Sometimes it is the seemingly minor (but well done) contribution of a lower-level employee that makes the rest of the work a success.

What would you add to a list of how to create a positive, appreciative, engaging corporate culture?

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?