June 15, 2016

Power of efficient Employee Recognition

Recognition and praise are two critical components that create positive emotions in the organisations and feeling valued is an important piece of the employee’s assessment of the workplace. A recent assessment conducted by statistical research company Gallup found that personalized feedback and recognition are “crucial predictors of positive workplace outcomes such as employee retention and productivity”. However, the research, which polled more than 47,000 employees in 116 countries who were asked to put 12 work-related statements in a rating order according to how much they agreed with them, also revealed that recognition and praise were rather poorly rated.

Jim Harter, PhD., chief scientist, workplace management and wellbeing for Gallup's workplace management practice, says, “Managers often assume they give enough feedback or that people naturally know how well they are doing. Or managers assume that if they give no feedback, people will assume they are doing fine. But Gallup studies show that the best managers around the world provide feedback regularly. Expectations are set and continually clarified through ongoing performance feedback and recognition.”

Reinforce right behaviours:

Recognizing the contributions employees make to an organisation helps solidify relationships, fosters employee engagement and loyalty to the organisation. Whether you recognize people formally or informally, it has been noted that effectively you reinforce the actions and behaviors you most want to see people repeat. The Walt Disney World Resort established an employee recognition program that resulted in a 15% increase in employee satisfaction with their day-to-day recognition by their immediate supervisors.

It correlated highly with high guest-satisfaction scores, which showed a h3 intent to return, and therefore increased profitability. Sears, Roebuck & Co. found for every 5% increase in employee attitude scores, they saw a 1-3% increase in customer satisfaction and a 0.5% increase in revenue.

Simple systems, effective programs:

An effective employee recognition program is simple, easy to implement and powerfully reinforcing. It allows the employees to feel cared for and appreciated. Many years of research shows that this recognition and care makes people produce better work. Take for example, Xoxoday SaaS platform where employees can appreciate each other in public and reward points, which can later be accumulated and redeemed against 5000+ amazing experiences and 300+ brand gift vouchers.

They can also send notes of Thank you, Good Work, All The Best and Get Well Soon. The ease of using the system stems from its employee engagement platform that everyone can instantly take to and therefore it promotes a culture of appreciation rather than just hierarchical appreciation. Xoxoday consumers report an increase of 30% in employee productivity, 40% increase in employee engagement and more importantly a 35% decrease in attrition rate.

Increase in employee engagement:

According to Aon Hewitt’s 2016 Trends in Global Engagement, rewards and recognition are among the top engagement drivers for companies globally, the others being Enabling infrastructure, EVP, career opportunities and learning & development. In fact, rewards and recognition saw the largest jump over the past year.

Take for example, Big Basket. The online grocery delivery startup wanted to stem the attrition of its delivery boys. In order to ensure their retention, the company set up housing for its warehouse employees and delivery boys. They are mostly hired from smaller cities and provided housing in the city of operations. As you know, Infosys has been frequently in the news for a while now. CEO Vishal Sikka is pulling out all stops to woo employees to stay in the company. In a bid to retain and attract talent, top performers in the company will be given incentives in the form of stock options for executives and restricted stock units for other employees.

Rejigging compensation was not the only way Sikka reached out. It did away with dress codes, female employees could extend maternity leave and employees were asked to be part of its decision-making process. Sikka came up with Murmuration, where employees could send in their ideas. All this resulted in the attrition rate falling to 17.4% in Q4 FY16 compared to 18.1% a quarter-ago period. Xoxoday SaaS platform has also been deployed in Infosys BPO to increase engagement among employees.

Apple is perhaps one of the best examples of a company that visibly shows how much of an engaged company it is. Employees get discounts on Apple products in the range of 15-25%. CEO Tim Cook has started a program called “Blue Sky” that allows employees to take two weeks to work on pet projects that are unrelated to their jobs at Apple. Cook trumpets philanthropy and matches employee donations and does not shy away from letting his top lieutenants share the limelight with him. In December 2015, the company rewarded its employees with urBeats earphones and a nine-month free subscription to Apple Music. All this results in the employees being the biggest brand ambassador the company will have.

The power of communication:

Employee recognition is a communication tool that reinforces and rewards the most important outcomes people create for your business. Recognizing people for their good work sends an extremely powerful message to the recipient, their work team and other employees through the grapevine and formal communication channels.

Employee recognition is therefore a potent communication technique. Creating and maintaining a culture of recognition is one of the five organisational objectives and goals for recognition programs, according to a 2015 research on Trends in Employee Recognition by WorldatWork. One of the biggest recruiting tools at logistics company FedEx is the culture of appreciation and the value that the company places on each individual. At FedEx, HR plays a supporting and facilitating role by constantly improving programs, training managers on how to spot positive behaviors and align the company-wide recognition programs with business initiatives.

Xoxoday SaaS platform understood the power of communication and built a social media platform like Rewards Platform which enables people not only give monetary appreciation but also social appreciation like Well Done, Good Job, You Rock etc. Surely increasing the amount of conversation among people and creating a culture of open communication and appreciation.

Reduces employee turnover:

Organisations with recognition programs that are highly effective at improving employee engagement had 31 percent lower voluntary turnover than their peers, according to Bersin by Deloitte. According to 2012, Workplace Survey by the American Psychological Association and Harris Interactive, a whopping 93% of employees are likely to report that they are motivated to do the very best for their employer. On the other hand, those who don’t feel valued are more likely to report that they intend to seek employment outside their company.

While many companies have instituted reward and recognition programs, fewer than half (48%) of employees are not satisfied with the recognition practices of their employer and only 54% say that their organisation makes them feel valued, according to APA research. The 2012 State of Employee Recognition research from Bersin by Deloitte shows that nearly 70% of individual contributors state that they are recognized once a year or not at all in contrast to 13% of senior leaders who think employees are recognized once a year or not at all. It is time to re-engineer recognition programs so that they are new and exciting for employees and aligned to support critical business needs.

About Author
Manoj Agarwal is Co-Founder of Xoxoday. Xoxoday is one of the pioneer organization in providing innovative Rewards Solutions. Xoxoday works with 700+ Corporate clients, helping them create a culture of appreciation and recognition with its innovative Experience based rewards and SaaS platform. Manoj is an active contributor in Startup Community and HR Fraternity.

Malavika Mallya