Reward programs in the consumer world are nothing new. Most retailers and service providers have a system in place that baits shoppers with an incentive connected to the number of visits or the amount of cash spent. And when that reward is earned, the desired behavior -- spending money -- is reinforced.
But in the world of work, it's a different story. Staying late or putting in discretionary effort often goes unnoticed, and therefore, unrewarded. And when high performers realize that going the extra mile doesn't mean extra incentive, they learn to do the bare minimum necessary to collect their paycheck.
With research showing the toll that disengaged employees can have on productivity, customer experience and profit, many human resources leaders are taking a cue from marketing by formalizing employee recognition programs and deploying supporting technology.
But there's hardly a standard approach to these initiatives, and a multitude of questions arise in the planning process. What type of rewards should be given, and for what actions? Should a company sign on with a social recognition software provider or build a customized system in house? Who will monitor the program, and how often should it be tweaked?
The first day of the Human Capital Institute's Employee Engagement Conference in Chicago featured two case studies on employee recognition programs that highlighted different approaches. While speakers attested to hurdles they had to overcome, they also affirmed the positive impact that revamped employee recognition programs have had on engagement.
Internal marketing paves path for employee recognition program
Credit Union ONE, headquartered in Ferndale, Mich., began to makeover its employee recognition program in 2010 as a way to boost engagement and bolster recruitment and retention efforts. While the company already had homegrown rewards programs in place, Ayren Hurst, director of knowledge management, said they were difficult to manage and didn't have broad adoption. Although the programs primarily awarded gift cards, employees could also opt for cash or vacation days in certain circumstances.
While many companies delving into employee recognition programs struggle with the decision to build or buy the technological framework, Hurst said the former wasn't viable. "We wanted something that was 24/7 and seamless to our employees, and we just didn't have the IT resources," she said. Hurst added that the company wanted a tool with a "social media feel that integrated well with our [Microsoft SharePoint] intranet." The organization ultimately partnered with employee social recognition software vendor Achievers.
The first step was to establish the starting level of employee engagement through a survey. Hurst said her team used the Q12 survey produced by Gallup as a model to help develop questions.
Initial research also included a discussion of what behavior to reward and how to reward it. The team decided to reward behavior that lived the company's core values, which cleared up the "what" part of the problem. But the "how" was more difficult. Katie Cummings, senior education specialist, called the decision of whether or not to offer cash the "great debate."
"When it comes to rewards and recognition, it has to be meaningful to employees," Cummings said. "Tickets to a concert or a sporting event -- these are memorable experiences that will stay with them."
Cummings said the team ultimately decided against cash because they felt it was not as meaningful as other options. "Have [cash rewards] ended up in your fridge or gas tank? Mine have," she said. "[Cash] gets lost -- often times it gets confused with compensation, and doesn't have that long-lasting impact."
In addition to branding the program -- naming it "Kudos Corner" -- the team also focused on change management and internal marketing to boost interest pre-launch and adoption post-launch. Hurst said they used the acronym "RISE" to train managers on how and when to recognize staff, which stands for Regular, Immediate, Specific and Encouraging. Teaser posters advertising Kudos Corner were displayed in break rooms and on the intranet in advance of the go-live date.
And it paid off. Within two weeks of the launch, 99% of employees activated their Kudos Corner accounts and 1200 recognitions came across the system -- approximately four per employee.
While the employee recognition program team was initially apprehensive to take cash rewards off the table, Cummings said they haven't had any complaints. The system has a "Facebook-like look" with a feed in the center displaying recognition news that users can comment on or "like." The landing page also features a leaderboard showing the month's top recognizers and recognized, which Hurst said "drives healthy competition."
Although there were some planning aspects that fell through the cracks, such as determining who owned the system, who should report on it and how often it should be reviewed, Hurst said these aspects got ironed out after launch.
Today, the program has an adoption rate of 100% among managers and recognitions hover around 1000 per month. A recent survey demonstrated the program's impact on employee engagement -- 91% of Credit Union ONE's employees said their manager recognizes their accomplishments, an increase from the baseline survey results.
Story-based employee recognition program applauds everyday 'magic'
A session titled "Celebrating Associates from the Heart is the Magic of Macy's" presented a different approach to social recognition at a larger company. Macy's Director of Recognition and Engagement Marketing Janice Weiss said the company decided to tweak its recognition strategy as a way of increasing survey scores on two key employee engagement drivers: "Macy's values my contribution" and "I am satisfied with the recognition I receive for doing a good job."
"We know that the stores that are most engaged [are] where you're going to see the most sales," she said. With that in mind, the initiative to improve recognition and engagement was "a business decision."
The company devised both formal and informal employee recognition programs over three years, Weiss explained. The formal program, called the "Make Magic 'Six' Awards," allows employees to nominate peers or superiors for annual awards that recognize six core behaviors: driving and making results, leadership, innovation, customer engagement, teamwork and giving.
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However, Weiss also wanted to implement something that was year-round. She decided to center the informal employee recognition program on storytelling. "Stories are inspirational," she said. "When you read about somebody doing something little that makes a difference, you [think], 'I can do that.'"
The informal employee recognition program is called "Magic Makers" and allows any Macy's employee to write a story about a co-worker and post it to a dedicated internal site, Weiss explained. When employees log in to the portal, stories from their store or function are displayed, and they can "like" them or send electronic cards of congratulations, among other actions. For each story, the subject receives an email notification, as well as her supervisor and department leader.
Store managers also choose a top story per month that gets passed along to district leaders and eventually to the CEO for national recognition. According to Weiss, 5000 stories are posted by the company's 1800 employees each month, and 650 out of 750 stores participate in the program.
To safeguard against inappropriate use, employees can flag stories they feel are inaccurate or inappropriate. The flagged story "immediately gets taken off and sent to a review board," Weiss said. "It [has] worked very effectively."
Enhanced dashboards and reporting are on the horizon for the managerial side of the program, and Weiss said the company is also working to allow employees to receive notifications on the point-of-sale system.
But regardless of future enhancements, Weiss said the initiative is already having a positive effect on employee engagement. "Glad to say we see our numbers going up."