Revving Up Your Recognition Program During a Recession
Revving Up Your Recognition Program During a Recession
By Tyler Gentry, Motivatum Now LLC and Linda Vossen
Why do companies drop their recognition programs during a recession? What message does it send to employees who are already stressed out about keeping their jobs or doubling their workload to compensate for those who have lost their jobs? Americans are feeling the economic crunch and companies may be unintentionally sending a message to employees — “You should be happy you still have a job.”
But, employers should ask themselves these questions: “What happens when the economy begins to improve and jobs begin opening up? Can we be certain that our top talent won’t jump ship as soon as they get the opportunity?” Dropping recognition programs altogether, especially in a down economy, only creates more stress and deteriorates morale.
Right now businesses are tightening their belts to stay under budget, but many are finding that recognition and reward programs can play a big part in increasing engagement and productivity. They have discovered the importance of paying attention to the company’s greatest asset – its employees. Now more than ever is the opportune time for companies to rev up their recognition culture.
The Reality
In 2008 alone, Americans lost 2.6 million jobs. As of May 2009, the unemployment rate had risen to 9.4 percent, according to the U.S. Bureau of Labor Statistics. The National Bureau of Economic Research declared the downturn an economic recession, with evidence of loss in Gross Domestic Product growth, real personal income, employment, industrial production and wholesale-retail sales.
It might seem logical to eliminate employee recognition programs because there is no easy, transparent way to justify the expense through return on investment (ROI) tracking. But most employers intuitively recognize that cutting these programs would cause a significant drop in employee morale.
However, there is some good news. A recent survey, conducted by a worldwide recognition company, assessed the importance of employee recognition in a recession. Results showed that 75 percent of HR managers indicated they are maintaining their employee recognition programs even while other areas of their company are being cut, with an additional 5 percent who actually plan to increase their budgets.
But in the same survey, 89 percent of HR managers indicated that layoffs and the reduction or elimination of programs and benefits would have a negative impact on morale now or in the future, and 80 percentsaid these cuts would impact productivity levels in the short and long term.
The Challenge
There is an important reason for keeping employee recognition programs in place: When companies fail to make employee recognition a strategic investment, they have no clear way to manage, track and report success metrics.
Following are some tips for making your recognition program personalized, realistic, measurable and “REAL.”
R is for results. Begin with the end in mind. What is the company’s current business strategy and how can it be linked to recognition in a clear, measurable fashion? Assessment doesn't need to take months, nor does it need a committee of 25 other people
Start by having a couple senior leaders buy in to your vision. Do this by outlining your company’s goals and matching them with a recognition program. For example, say that one of your business goals is to improve employee satisfaction by 5 percent. Since it isn’t possible to directly measure employee satisfaction with employee recognition data, what is a possible measurement? With a recognition program, it is easy to take a look at employee participation levels. It is possible to drive greater participation because it is clear which managers are giving employee recognition and which aren't.
Manager Utilization is one metric that easily tracks and evaluates manager use of recognition in the workplace. Results for this metric can be obtained by training managers to use recognition as a tool to motivate and reward their employees. Once managers understand the benefits of recognition, they are more likely to use a system to practice giving it. As a baseline, a company might set a goal for the first year at 80% manager utilization. With a system in place, you can see which managers are using the recognition system and which ones are not.
E is for evaluate. Look at your current programs and immediately determine what is working and what isn’t. Via employee survey, ask employees directly what kinds of treatment they like, and what they dislike.
For example, Emerge International, a cultural assessment provider, has a survey tool called the Employee Recognition and Reward Health Indicator. For a small administration fee, it can easily survey employees. For companies that plan to conduct more frequent ongoing surveys, it may be more cost-effective to purchase their own software and customize the survey programs and tools. Depending on the software, an in-house online survey program can enable users to create their own questions, set their own criteria, distribute the survey with start and stop dates and get on-the-spot metric results without outsourcing.
A is for act. Once likes and dislikes are established, it’s time to implement the right program for your organization. Depending on the complexity, you may need to outsource an employee recognition system or platform to administer the recognition nominations and reward redemptions. This is a critical component to making recognition strategic because it will allow you to capture all employee recognition activity in an efficient, easy manner.
L is for learn. Realize the key learnings of the effort. What do the metrics reveal about the workforce and employee recognition? This data should be measurable. For example: How many employees were nominated in the month of January for the ABC Award? With a formal system in place, it is possible to run a report. If this data is taken to the next level, it is possible to assess participation rates by managers and employees. This data can then be matched to employee engagement to find correlations.
The Rules
In April 2008, Cargill was given Recognition Professionals International’s Best Overall Employee Recognition Award. Instead of following a basic recognition plan, they also implemented a survey question about employee satisfaction directly into their annual employee engagement survey.
Don’t be afraid to think creatively about how to measure employee attitudes – straightforward survey questions are a great way to get started, but employees need to feel safe and empowered to express their attitudes openly and candidly.
Companies that are engaged in strategic and systematic recognition programs stand the best chance of survival because they have the framework for strategy, executive buy in and the systems to capture data about their employee recognition practices for ROI justification.
There are other uses for employee recognition metrics, including measuring employee accomplishments and areas for improvement. The key is having the measurable data to use when the time comes.
The Refusal
In a recession, companies may believe that it is unfair to continue with costly rewards when they are reducing their workforce size. It’s a sound argument until you compare the savings of reducing a workforce to the fraction of the cost it takes to recognize existing employees. With fewer employees, existing employees are carrying a larger workload and more responsibility, and it makes sense to reward them for it.
Companies also may be tempted to pull the plug on programs because the ROI of these programs is not transparent and difficult to prove. But companies are able to quantify employee turnover costs and retention rates while the programs are in place. This will help show the ROI – by comparing the production levels of a long-term employee with the cost to attract, recruit, train and retain another.
Conclusion In general, employees like reinforcement of positive behavior, whether it's in the form of an incentive, a gift or just a pat on the back in a public forum. If the opportunity presents itself to buff up or revamp an employee recognition program, now is the time to do it. The truth about the success of employee recognition programs in a recession lies within the stories we hear, the data we produce, the money we save, the talent we retain and the smiles on our employees' faces.
About the Authors Tyler Gentry serves as CEO, Chief Enthusiasm Officer, of Phoenix-based Motivatum Now LLC. He can be reached at tyler@motivatumnow.com.
Linda Vossen is a communications professional, serving 12 years in the financial services industry and eight years in the building industry. She can be reached at lmvossen@yahoo.com.
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