Employee Recognition Trends, Impact & Areas for Improvement

Let's get one thing clear. Employee recognition is not a Years of Service or Long Service award program. At least, employee recognition is not just Years of Service. In the same vein, employee recognition is not just sales or customer service incentive initiatives.

So what is employee recognition? We could quibble about semantics and details, but generally, employee recognition is anything and everything you as an organization, manager or even peer do to acknowledge, praise and appreciate the hard work, success and achievements of colleagues.

That’s a critical point WorldatWork gets right in their semi-regular Trends in Employee Recognition Report. Conducted in 2002, 2003, 2005, 2008 and just released this month, the Trends reports tracks organizational behavior regarding employee recognition efforts ranging from length of service, above and beyond performance, and sales performance to peer-to-peer, behavior motivation, and safety.

Interesting Trends
The report overall is quite interesting, but a few trends in particular stood out to me:

86% - Companies with recognition programs.

90% - Of those with recognition programs, companies with Years of Service (YoS) recognition - still the most common recognition. YoS is a controversial offering. Employees should be acknowledged for reaching milestone anniversaries, but managers must be careful that these do not become the default recognition essentially rewarding presence and not behaviors, actions and achievements.

9% - Growth for usage of programs to motivate specific behaviors, the highest usage growth rate of any program since 2008. This is encouraging to me as I am a huge proponent of behavior-based recognition in which frequent, timely and specific praise of desired behaviors based on company values can most strongly influence employee engagement, performance and productivity.

31% - Reporting more recognition occurring than 12 months ago (with 62% reporting about the same)

2% - Average percent of payroll budgeted for recognition, down slightly from 2.7% in 2008, but still quite healthy investment during the economic recovery.

Business Impact
Questions addressing business impact seem to be limited, but of those asked, percentages reporting positive or extremely positive in response to the effect of recognition programs on:

71% - Employee Satisfaction
66% - Employee Motivation
64% - Employee Engagement

Areas for Improvement
Though largely a positive reflection of recognition program activity in organizations, there are still several areas for improvement. The most concerning to me:

45% - Do not have a written strategy for recognition programs. If your strategy – including goals and definition of success – isn’t documented, how do you know your program is successful? Strangely, 75% think their programs are successful, but I sure wouldn’t want to be in the shoes of an HR pro with no strategy trying to prove that success to a senior executive. Encouragingly, 97% of those that do have a written strategy for recognition align it with the organization strategy.

39% - International/global employees participating in all or most of the same recognition programs as North American colleagues. This is particularly discouraging to me. Recognition is a powerful tool for uniting employees around the world behind one culture, one vision, one set of commonly understood values. But if the programs are disjointed (or worse – not available at all in some countries), then international employees are left to feel like second-class citizens. If that’s not enough reason to unite recognition into a single, global program for all employees, think of the overhead, compliance and risk costs that can be saved.

14% - Organizations training managers on recognition practices. This is horrible. As with any program, why go to the expense if you’re not going to train the people most responsible for ensuring program success? Especially with a program like recognition that is easy, fun and ultimately a boost to employee, manager and team success.

Anything surprising to you in these trends or others in the report?

Image: WorldatWork, Trends in Employee Recognition, May 2011

As Globoforce’s Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. His articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.

Comments

[Shannan Hearne]

Excellent summary of the current state of employee recognition affairs! I've mentioned on my blog as well with author credit cited. http://www.loyalnation.com/blog/

[Derek Irvine, Globoforce]

Thanks, Shannan. I'm glad you found it useful.