By Performance Improvement Council
Louise Anderson, Contributor
By 2014, social networking will replace email as the primary form of communication for up to 20 percent of business users. Even now, 69 percent of executives report measurable benefits from using social media. (Workforce Management, April 2010, p.4). No matter where you turn, the buzz about social networking is inescapable. As executives ponder how to leverage social media for business growth, they need to realize the impact these tools can have on employee performance.
Growing Business Case for Recognition
A recent study by World at Work and Towers Watson highlights that, even in the midst of reduced compensation and benefits, 23% of the companies surveyed were adding recognition programs so people would be recognized for their contributions and top performers would feel valued. When you combine that with the reasons why people leave, you realize that recognition can impact turnover and your bottom line.
What are the top reasons workers cite for leaving?
(Total exceeds 100 since respondents could choose more than one.)
Not surprisingly, HR Leaders, CEOs, COOs and even CFOs are seriously evaluating and implementing recognition systems that enable people across departments and even country to country to recognize, share best practices and highlight company values. Recognition and rewards today are used for years of service, safety programs, customer service, productivity, sales, marketing and any initiative that needs to be energized. Thanks to electronic systems, they are easier to launch, track and modify.
According to the Brookings Institution, 85 percent of a company’s value is now calculated on intangible assets—knowledge, reputation and human talent. It is no wonder the value of recognition and rewards has hit the C Suite. It just makes good business sense.
Importance of Storytelling Today
In tough economic times, employees are accustomed to being asked to do more. But, even in a down economy, people are excelling and deserve to be recognized. During challenging periods, it becomes even more important to tell an organization’s success stories to assure everyone that good things are still happening and that they, too, can be successful. Stories are powerful ways to spotlight innovation and acknowledge activities that are done right.
Formal recognition can be the catalytic spark that inspires. If you reward someone for “doing the right things, right,” it is like having an insurance policy that assures you will get better results. In fact, a culture of recognition can actually reverse a downward spiral. As business futurists Roger Herman and Joyce Gioia report, companies that recognize their people outperform companies that don’t by 30 to 40 percent. Recognition and incentives can also change a company’s culture—encouraging loyalty, engagement, and enthusiasm.
So why don’t more companies consider recognition as part of total compensation? Even though the best recognition is not cash, it still represents a cost and a value to consider as one of the compensation levers: base pay, variable pay, bonus and recognition. By its nature, recognition is aligned with story telling in that it is immediate and can be used to broadcast what is working right now, instead of waiting until the end of the year when it is too late to impact outcomes. You can stimulate improvements with storytelling and magnify the call to action with recognition and incentives.
In our digital age, best practices or successes can be captured quickly, shared online and discussed—while still “news.” It is like having a digital water cooler where people communicate about work events. The difference is the conversations take place virtually and have greater involvement than the water coolers of the past.
Can Your Recognition Program Become a Digital Water Cooler?
Today, you can use an online recognition and reward system and make it your digital water cooler. All the tools you need are available in electronic formats and can be housed inside or outside an organization’s firewall. Recognition can be quick, direct and customized—all in just a few keystrokes. At the same time, specific company information can be customized and posted on the rewards and recognition website as a powerful way to promote company values and keep the momentum in current initiatives.
Scottrade, a leading branch-supported online investment firm that has made FORTUNE Magazine’s “100 Best Companies to Work For” list for the last three years, provides a working example of the power of electronic recognition. The firm uses an online, points-based recognition program to support its cultural values. Associates are encouraged to recognize one another for demonstrating the core values of customer service, trust and integrity, individual development, open communication and teamwork.
Scottrade sees recognition as a way to cultivate development; rewarding others for their efforts encourages associates to find even more ways to excel, fostering their growth. The firm also believes that it fosters open communication because the online tools enable recognition from employee to employee, manager to employee, and employee to manager with no limit to whom an individual can recognize. Scottrade’s culture of open communication across all levels and divisions of the organization is furthered when associates from differing levels and work groups can openly reward each other.
Through the rewards website, Scottrade associates can:
The website makes recognition methods easily accessible so associates are more likely to get involved. Nominating an individual or team for an award is as easy as filling out an online form. The nominator describes the accomplishment and its impact to the organization and chooses the appropriate award level (silver, gold or platinum) to determine how many points the nominee will receive. Nominations are then sent electronically to management for approval. To send an e-card, associates simply choose from various designs and messages and then type a personalized note expressing their appreciation.
The rewards website and materials allow Scottrade to tailor messaging and branding to align with company initiatives. For example, when Scottrade released a new tagline, they re-branded the recognition program, website and scratch-off cards to match it, spreading the external brand within the organization.
By enabling everyone in the organization to have a dedicated way to recognize both teams and individuals for excellence in displaying company values and generating valuable outcomes, you connect the dots between current strategic initiatives and critical longstanding goals. Sharing the stories about the actions that get recognized, will spread the kind of news about achievements that can keep your associates returning to find out about the latest success and to see how they can participate.
Recognition’s Role in Maximizing Talent
Companies spend a lot of money finding the right talent. They spend even more to train and inculcate them. The learning curves—especially with lean staffs—can be stressful. How do you help people learn quickly and stay focused? How do you enable employees to bond? Can recognition help?
Recently, a new associate at an advertising agency in New York City described the unnecessary stress that she and her peers were experiencing. She was a top performer who was accustomed to being recognized for her work yet on many days she would have a knot in her stomach. At her new company, which she believes is the best in the industry, she feels as though nothing is ever good enough and she often sounds totally drained. When asked why she felt that way, she explained:
“I work hard to make sure all the data is correct and that I understand what various managers want. I routinely have planning sessions with my manager for major presentations and we discuss what the WOW factor should be for her audience. Everyone is extremely busy so we work a lot of overtime. The thing that is so disappointing is that all you really get feedback on is what is NOT working. It seems as though you only hear complaints. Today, more people are leaving companies to go to competitors. When you feel stressed all day long, it makes you feel like you should look someplace else to see if it could be less stressful.”
Note there is no reference to money in this story, just the lack of appreciation. Research from the Gallup Management Journal states individuals who receive regular praise and recognition:
Do you think that saves a company? Do you think that if companies like the New York agency had a way to encourage recognition—manager to direct report, peer to peer, or even manager to inter-departmental teams—that people would be more motivated?
Look at the New York Times report about the new CEO of Xerox, Ursula Burns, who almost left the company. When she notified the company that she had decided to leave, that is when she first heard how valuable she was. “I think that was the first time I said ‛Oh, maybe at some point I could actually become CEO’.” (February 21, 2010). This situation happens frequently and is costing companies more than they realize. The sad part is companies could be doing something about it.
Impact of Story Telling
The stories about the young advertising employee and Xerox CEO are valuable for their powerful lessons. Employees who don’t feel appreciated may not perform well, and are more likely to leave. More importantly, all employees want to know that what they do matters.
What about increasing positive story telling in your company? Wouldn’t it be energizing if there were more talk about things that work well… if there was a natural “buzz” about “doing the right thing?”
Many employees won’t wait to be rewarded. On-the-spot recognition creates an environment that fosters improved performance. This is especially true for Generations X and Y. While Baby Boomers find hard work its own reward, Gen X and Y expect frequent feedback. These generations were raised on coaching, recognition and rewards. They expect timely recognition. They want public recognition that uses the social media they grew up with and says, “I’ve noticed you and want you to be successful.” Make recognition and rewards timely and public, and your Gen X and Y employees will reward you with performance. Oh, and the Boomers will be grateful for being acknowledged because they don’t expect it… so they will work even harder.
Social Media Can Tell the Story and Boost Impact
Recognition is really about a story. It’s the story of how an employee or team finds an exemplary way to generate business results and gets rewarded for extra effort. Today, old-fashioned story telling has been replaced with tools that keep people instantaneously informed. BlackBerries, Iphones and computers spread information at the speed of byte. Most companies have adopted electronic tools to keep their diverse, multi-located employees connected. But many have not yet considered the power of using these devices to relay the inspirational stories implicit in any recognition program. For instance:
What Does Senior Management Think About Social Media?
Social networking is an evolving phenomenon that has captured the attention of 96 percent of people under 30 while 80 percent of companies today use it for recruitment. The reality is that people and companies are using social media as a way to connect across generations, circumstances and geography.
While we are still in the early stages of using this technology for business and many executives are excited about its potential, they are cautious about the ultimate results. Some executives are not fully aware of its efficacy and struggle to quantify its value. However, according to a study published by McKinsey, most businesses are experiencing positive outcomes including; a greater ability to share ideas, improved (and faster) access to knowledge experts, and reduced costs of communication, travel, and operations. Businesses also report decreased time to market and improved employee satisfaction.
Using these tools to recognize employees can only help to fulfill the increased need that today’s multi-generational employees have for feeling valued in a post-recession economy.