Manage Costs of Employee Recognition in 2009

Research firm Watson Wyatt recently released “Ten Principles for Managing Employee Reward in 2009.” While I don’t agree with all elements of the list, I do strongly agree with a comment by Carole Hathaway, head of strategic reward consulting at Watson Wyatt: "Stressed organisations could be in danger of making employee reward decisions that they come to regret if they abandon too readily the principles that underpin their people strategies."

A couple of points I would like to highlight from the list follow.

“Don't abandon bonuses: Don't abandon performance pay and bonuses but instead target them on your top performers and refocus them on realistic but stretching targets that will promote the right behaviours in this new environment.”

I’ve blogged in detail on this topic of what do when bonuses disappear. Essentially, employers must consider how they will address the higher order needs of employees for recognition and esteem as described in Maslow’s Hierarchy of Needs when the past method of bonuses are no longer an option. As I’ve said, a strategic recognition program helps overcome the gap created by the elimination of bonuses. During these recessionary times, employees are full of fear and uncertainty. Strategic recognition bridges the no-bonus gap by feeding your employees’ needs for psychic income -- social acceptance, increased self-esteem and self realization that can never be met through compensation.

To “promote the right behaviors in this new environment,” wise leaders rely on frequent and timely recognition, not bonuses. Recognition gives you the flexibility to specifically call out a desired behavior soon after the event to reinforce the need for repetition of that behavior.

“Don't damage your employer brand: Don't harm your employer brand by not delivering on your employee value proposition the moment things get tough. Live it through tough times and you will maintain an engaged and productive workforce.”

Maintaining your company culture is essential during this recession so employees can rest confident in the knowledge that they and their efforts are important, needed, and appreciated. If you’ve succeeded in creating a culture of appreciation, it is now more important than ever to maintain that culture. Cost savings can be found through program consolidation and more efficient use of resources, but showing appreciation for hard effort to deliver against company strategic goals and resiliency in this time is critical to riding out the recession to a position of competitive advantage.

How is your employer brand withstanding the recession? Are you seeing any changes to how employees perceive you as a company? What are the potential impacts to you of those changes when the economy does turn? Join the conversation in comments.

Globoforce Podcasts on Employee Recognition & Engagement Now Available!

I’m thrilled to announce Globoforce now has podcasts available to make it more convenient to lean about the value of strategic recognition programs in this recession.

Two are currently available on our website with more to come regularly:

In “The Competitive Advantage of Strategic Employee Recognition during a Recession” I discuss the impact the declining state of the global economy, layoffs, bankruptcies, foreclosures and the credit crunch are having on employees and how strategic employee recognition can boost morale, increase productivity, and save your company money by eliminating the waste common in tactical, ad-hoc recognition initiatives many companies have in place today.

In “Great Expectations: Building the Employee Recognition Program Your CEO Wants” I highlight the results of a recent survey we recently conducted with middle- and senior-level HR and HR-related personnel about CEO perceptions of recognition programs as they relate to corporate objectives within their organization. I also offer best practices based on our work with some of the world’s largest organizations for improving existing recognition efforts.

Stay tuned for more podcasts! I’ll post here when new downloads are available.

Tell me what you think of these podcasts in comments. Also, let me know any topics you’d like to have me cover in future podcasts.

Recognition for Offline Employees with Fairmont Hotels & Resorts

Kyla Deveraux, manager of learning and development at Fairmont Hotels & Resorts, joined me last week for a webinar: “Turn Moments into Memories with Strategic Recognition.”

Built on Fairmont’s mission to turn moments into memories for their guests and on the company’s brand promise and values, the Serviceplus employee recognition program acknowledges employee behavior that delivers on these goals. Kyla discusses in the webinar how Fairmont uses Serviceplus to “turn moments into memories” for their colleagues who go above and beyond.

Since the majority of Fairmont’s employees are offline, Kyla also shows unique aspects of their program to address the needs of offline workers as well as continually communicate the program appropriately to all employees.

Serviceplus has been a resounding success for Fairmont, who has seen significant improvement in the recognition factor on the company’s employee engagement survey since launch of Serviceplus more than two years ago. As Kyla says, “Serviceplus is not an incentive, but a means to celebrate in a way that enhances our culture.”

I also discuss in the webinar the urgent need for HR to rescue employee morale and productivity in this recession and how strategic recognition programs can help.

I encourage you to download the webinar to learn more. Then tell me what you think in comments.

Are You Wasting Your Investment in Employee Recognition: Part 2?

Early last week, Globoforce released the results of a survey showing, in part, HR leaders feel their programs fall short in driving bottom-line results. A staggering 42% of all organizations surveyed are not measuring their program’s results in any way, leaving CEOs in the dark on the effectiveness and true value of their recognition programs and effectively wasting the money invested.

Late last week, the Chartered Institute of Personnel and Development (CIPD) issued similar findings in its Annual Reward Management Survey:

• 46% of employers were not aware of total remuneration spend (benefits, base pay, variable pay and insurance)
• An astonishing 68% of organizations do not assess the impact of their reward practices
• Of those that do measure remuneration spend, 83% cannot break it down into categories of salary, variable pay and benefits.

Charles Cotton, reward advisor at the CIPD, had this to say:

“If organisations do not have a complete handle on where their staff spending goes, it makes it far more difficult to prioritise investment in the measures that will retain and motivate talented individuals. Reward, if implemented correctly, can engage staff at a time when pay freezes and redundancies are prevalent, boosting the chances of the organisations coming out of the recession in good shape to benefit from the recovery."

A hallmark of strategic recognition is saving organizations money by carefully targeting the funds invested in recognition to boost morale and productivity. How important is this? Accountemps, a US recruiting firm, recently conducted a survey of senior executives, finding “failure to recognize employee achievements” ranked second only to communication as the thing that had the most negative impact on employee morale. Similarly, senior executives recognized recognition as a best remedy for low morale, again second only to communication.

What this all tells me is senior executives acknowledge the importance of recognition to boost morale and performance. Yet they are also unaware of their investment in the means to recognize employees and have no measurement or proof of success of those investments against goals.

Now is not the time for companies to spend good money after bad on investments they are not even fully aware of. To realize the full return on your investment in recognition, you must have a program that aligns with and reinforces your corporate goals and objectives, reports on progress against predetermined metrics, and meets employee needs for recognition of their efforts in this stressed time.

Are you investing in recognition programs today? What is your current level of investment? Are you seeing the return you need? Tell us in our weekly poll.