SI Review: November 2010


Winning with a Culture of Recognition, Si Review November 2010

Ercic Mosley & Derek Irvine, authors of "Winning with a Culture of Recognition"
Chat with Si Review's Jeff Reeder

The authors of this new, timely book sat down with us to talk about the impact of recognition on a company, how to weave it into the very culture of a company and its impact on the bottom line.

An excerpt from the book follows.

Our readers are owners and executives at contingent workforce agencies, but the authors say all workers are temporary. Can you expand on this?
While it is true that the “life-long employee” is largely a trend from the past, we do think it’s important for companies to strive for it. While people crave opportunity and new challenges, they also seek security. Most importantly, people want to know that what they do is important and contributes to the greater goal of the organization. In a recent poll on our blog, 75% of respondents said they are happiest at work when “I know I’ve contributed to a meaningful goal.” Recognition is a critical way for companies today to align employees with an organization’s strategic objectives and core values. This helps increase employee engagement, and higher engagement is directly proportional to employee tenure at organizations. Quite simply, people don’t want to leave companies where they feel valued and know their importance.

How important is employee recognition?
Employee recognition is essential in today’s business world, as we describe in the book, it can even become your core competitive advantage. Human beings have a fundamental need for social acceptance, increased self-esteem and self-realization. In addition, they want to know how their work contributes to the big picture and that they’re valued at their workplace. When practiced strategically and implemented in a way that incorporates all of today’s technology, employee recognition can make an immediate impact on a workforce. As Dan Pink, author of Drive: The Surprising Truth About What Motivates Us, said in a Webinar with us, “Recognition matters. A lot. Because recognition acknowledges the progress people need, frequently catch people in the act of making progress, call it out so people notice it, share it more widely and formally, and celebrate it.”

The key element is tying recognition into a company’s strategic objectives and core values, ensuring the entire workforce’s performance and behaviors are aligned. Recognition programs can engage a workforce by rewarding them for behaviors, actions and attitudes that reflect an organization’s core goals and values. Effective programs also deliver a unified platform for giving rewards that are culturally relevant and personally meaningful worldwide.

How important is employee recognition to the bottom line?
In today’s challenging economy, companies are always looking for new ways to enhance performance within the organization. Achieving employee engagement through employee recognition efforts is the next significant ROI opportunity for businesses. Towers Watson research shows that a 15% improvement in engagement levels, can equal 2% improvement in the bottom line.

Recognition programs empower companies to create a unified workforce, aligning employees around its core goals and values. Implemented correctly, employee recognition is a powerful tool to drive the success of any organization as measured by improvements in operating margins, income and customer satisfaction. By shaping employee behaviors and engaging employees, companies form a culture of appreciation that drives these gains in performance, productivity, profits and pride (all critical elements towards and within the bottom line).

How do you connect recognition to corporate culture?
Culture never “just happens.” As the old saying goes, “What gets rewarded gets done.” It’s equally true that what gets recognized gets repeated. Active culture management starts with recognizing and rewarding employee behaviors that align with a company’s strategic objectives and core values, resulting in a culture where everyone is encouraged and celebrated when they behave and perform in desired ways. Core values serve as the company’s moral compass to show employees what you stand for as an organization. Vitally, core values can deliver your competitive advantage in the market. Therefore, it’s critical that core values are echoed across employees’ behaviors and performance year-round. This is the key area where employee recognition can help. By rewarding behaviors that align with a company’s core values, the values will be reinforced and lived throughout the organization, thereby driving a culture with behaviors that reflect organizational values and contribute to company success.

Can you provide an example of a company that has done this well?
Absolutely. Our client, Symantec, created their “Applause” recognition program to support company goals and values, immediately recognize desired behaviors, help individuals understand how they contribute to achievement, and eliminate a “culture of cultures” that had developed after several acquisitions. They previously gave top performers just cash rewards. Now, through Applause, Symantec awards employees through simple acts of recognition (that are always tied to company goals and values) with non-cash, personal and meaningful awards valued from $25 to $1,000. This approach creates a memorable, lasting impact with employees, and steers behaviors, performance and engagement in the right direction. Symantec went from determining business requirements for the program to go live globally in just three months, realizing
a quantifiable culture change in just six months!

Is recognition hard to do, or time consuming?
We see recognition as an enormous time saver. Not only is the time to implement recognition faster than a vast majority of HR systems, but so is the speed to measurable results. Recognition can quantifiably impact employee engagement and satisfaction in mere months, not years. This helps decrease employee turnover, which helps decrease time and money for recruiting new employees. In addition, when a recognition program is implemented strategically, our clients experience higher employee productivity levels, which make an organization more efficient and profitable for the long term.

Any other thoughts on recognition and culture?
Below are some tips for praising and appreciating employees successfully:

  • Use recognition moments to reinforce company values.
  • Be quick with your recognition, linking the reinforcement soon after the behavior occurred.
  • Think about the best way to recognize, suitable to the person involved and also suitable to the level of accomplishment – take that extra five minutes to get it right.
  • Give employees plenty of culturally relevant reward options – everywhere in the world.

Any additional advice to companies looking to make recognition part of their culture?
Yes. Our five tenets of strategic recognition provide a great overview of the essential elements for a program:
Tenet 1: A Single, Clear Global Strategy – A clear global strategy requires a clear outcome. Start with a hard business goal in mind. Also, ensure the program will work for the whole company – everywhere, everyone. Rewards must be personally meaningful, culturally relevant and equitable in the number of options and value of rewards from country to country.
Tenet 2: Executive Sponsorship with Defined Goals – Managers must be held accountable for goals, including percentage of employees awarded, employee satisfaction and engagement scores, the match of award distribution to the bell curve and the frequency of awards.
Tenet 3: Aligned with Company Values and Strategic Objectives – Management needs to track the individual-recognition moments that are consciously linked to company values and goals. Dashboards illustrate for managers the traction of each value, whether by region, division or department.
Tenet 4: Opportunity for All to Participate – Giving many lower-value rewards to employees across the company results in a stronger impact on the company. As more participate, the data described in Tenet 3 become richer, more detailed and more accurately reflective of the entire company’s attachment to
particular values.
Tenet 5: The Power of Individual Choice – When developing the roster of awards available, managers must consider the demographics of a worldwide workforce that might span four generations, all with different expectations and driving forces. Allowing people to choose what is meaningful and personal to them increases the significance of the award.

The following is an excerpt from the new book, Winning With A Culture of Recognition.
Since culture is manifest in behaviors in ways that are both as dramatic as this once-in-a-career moment and as mundane as regular day-to-day behaviors, we have to ask, what guides those behaviors? What can managers do to establish and maintain their culture?

Certainly they can lead by example and inspiration, but not everyone can imitate a great leader (even if they try). Management needs a tool that helps all employees learn for themselves how to “live the culture.”

Recognition is that tool, and there are three levels of value to it.

Individual Recognition
Individual recognition is at the center of everything we write about in this book because it’s where the connection happens between a manager and an employee. The manager notices extra effort or good performance and recognizes it with an award and a personal message connecting the behavior to a value that is part of the company culture. There are two connections, actually – the association between behavior and values, and the human connection between manager and employee. (Incidentally, when we say “manager and employee” we mean everyone from line managers to top executives. Recognition works at all levels.)

“Catch them doing the right thing” is the slogan for this kind of recognition. Proponents focus on the recognition moment – the positive interaction between manager and employee. They encourage managers to find many little ways to celebrate employee performance so that positive reinforcement becomes a habit.

We call this individual recognition because it is really a one-to-one connection. Most of us have seen managers who just had a knack for recognizing and motivating their people. It’s positive effort, and it motivates employees to become more enthusiastic about their jobs. On its surface, the chief appeal of individual recognition is its appearance of being easy and fun. People like to give and receive a pat on the back. (In fact, it’s a sad comment on most corporate cultures that implementing individual recognition is an improvement on what was happening before.)    

An unmanaged individual-recognition program works best in a small business, which is typically driven by the personality and leadership of the owner. Mallory’s Appliance Repair, with 10 employees, is a small society in which Mallory can celebrate and recognize good work frequently. General Electric, with 350,000 employees, is a different story. The vast majority of employees is part of many layers of management or are thousands of miles removed from executives. Managers with diverse personalities, cultural expectations and leadership abilities cannot be expected to behave in the same way or convey the same critical messages. An individual-recognition program that relies on creative and spontaneous impulse is out of place in the complex, data-dependent multinational corporation. Why? Because you can’t possibly deliver this spontaneous behavior across thousands of individuals through hope, encouragement or cajoling alone. Managers don’t manage anything else on hope, so why recognition? In such a workplace, systems need to be in place to encourage the right behavior in the appropriate scale.

For a large organization to implement an individual-recognition program in a sustainable way, it can’t just depend on the enlightenment of every manager and his or her ability (or willingness) to find 1,000 ways to give trinkets to employees. Furthermore, a large organization risks complete chaos in its recognition efforts if it can’t provide a scalable way for all managers to recognize their people.

Enterprise Recognition
In the last few decades, an entire industry grew up to create more formal recognition programs for organizations of about 100 employees or more. Recognition companies provided simple guidelines and basic training for managers who might not otherwise know the most effective ways to recognize their people. They offered large catalogs of awards and prizes that managers could give to employees.

This service, which we call enterprise recognition, was the next step in the evolution of a recognition practice. It encouraged managers to participate in recognition. It gave some amount of quality control to the people in charge of recognition, typically someone in the human resources department. It made recognition efforts standard and scalable across big organizations, just as a purchasing department can standardize and scale the buying of office supplies.

What happens when you take a good idea like individual recognition and try to scale it across the enterprise? Typically, you invest in the supporting structures of a recognition program. You create or buy different tools to scale training, communication, and the physical delivery of awards. You make the program global. You make it sustainable in terms of making sure that everybody has access to the right budgets and it’s happening all over the enterprise, in different divisions and in different languages. You’ve added another layer of value to the delivery of individual recognition and ensured that it’s delivered company-wide.

However, delivering a company-wide, universally adopted recognition program requires a break from the past in terms of typical program design. Old-fashioned recognition programs are notori­ously hard to scale:

  • Old-fashioned recognition programs demand creativity from some managers who just don’t have it. (Its acolytes try to overcome this problem by promoting lists with names like “365 ways to reward employees.”)
  • Old-fashioned recognition programs, as typically practiced, focus awards around previously chosen objects, such as a lapel pin, a USB flash drive, a cupcake, a desk set, a plaque with the company logo. The value of the gift is subjective and variable according to the recipient’s taste and the giver’s choice.
  • Old-fashioned recognition programs’ focus on these objects complicates implementation across cultures in large global companies. The programs tend to be U.S.-focused and thus fail to account for cultural differences that would demonstrate respect and understanding of employees’ local culture.
  • Old-fashioned recognition programs are difficult to manage in terms of directing costs to best use, tracking the business benefits of the practice and following up. Focused on the individual manager and the recognition moment, these programs generally rely on ad hoc reporting and subjective impressions.
  • Old-fashioned recognition programs, because they require such creativity and depend on manager buy-in, are hard to enforce and typically have low penetration rates.

Enterprise recognition is a thoroughly
modern approach. However, it is not effortless to launch or easy to sustain in a modern organization. Certainly, if you design the program incorrectly at the start, you’ll have great difficulty in scaling it up so that it reaches 80 to 90% of the workforce. Standardized solutions create friction in a large, complex department. There are logistical issues around ordering and shipping merchandise. People often don’t participate because they have never heard of the program or they don’t like the awards. In a global organization, there are language, currency and tax complications.

Enterprise recognition falls short of recognition’s true potential because it is layered onto a culture in the same manner as a benefit program. It stays in the human resources silo – a positive step forward, to be sure, but not answerable like other disciplines to management practices of measurement against goals. That represents a significant missed opportunity, one that can be captured by the final evolution in recognition, which we call strategic recognition.

Strategic Recognition
Strategic recognition is the practice of integrating recognition with other management practices, taking recognition beyond the human resources silo and leveraging its power to shape behavior at all levels of the organization. (When we say power, we mean recognition’s unique ability to help employees manage themselves, as opposed to just obeying directions from the “powers that be.”) When individual recognition moments across the enterprise are recorded, analyzed, and understood, recognition becomes as potent a management tool as financial- or program-management practices.

Strategic recognition adds the ultimate layer of value, which is culture management. Strategic recognition is linked to strategic goals such as engagement, employee satisfaction or culture change. But also, because you have those tools, you get to then use strategic recognition to manage the culture. In other words, you can emphasize a single value that you feel doesn’t have the traction you need to meet your strategic objectives.

Stopping the effort at individual or even enterprise recognition is shortsighted, like focusing on one quarter’s sales to the exclusion of long-term sales analysis or product development.

Your sales strategy doesn’t focus exclusively on the moment a sales transaction closes (at least, it shouldn’t). Strategic sales practices track and analyze customer relationships, planning, product development, marketing intelligence, follow-through, and growing skills of sales staff. In the same way, strategic culture management needs a long-term set of practices that make the moment of recognition reflect a larger drive to fulfill company strategy. Strategic recognition takes its place with the other “hard” management science practices. It has measurable processes. It is fully integrated into strategic planning and global resource management. It removes barriers to success. Self-sustaining, strategic recognition can enhance and define organizational culture, bring certain values to the surface, and drive a culture in which behaviors reflect organizational values and contribute to company success.

Strategic recognition aligns company culture to geographic, national and even demographic cultures. The company’s most important values are understood by everyone: young Europeans and older Asians, jocks in the financial planning department, hipster designers in marketing and minivan-driving soccer parents in the call center. Strategic recognition becomes so much more than the relationship between manager and employee – it becomes the affirmation of belonging to the society we call a corporation. Its goal is not to continually add new incentives but to become a self-sustaining set of desired behaviors – to create an organizational culture.


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