A Towers Perrin study (2008) of 90,000 employees in 18 countries showed that companies with the most engaged employees had a 19% increase in operating income in the previous year compared to a 32% decline among those with the least engaged employees. Gallup called employee engagement “performance optimization management principles” and determined that organizations with these principles outperformed their competitors by 26% in gross margin and 85% in sales growth.
Times are troubled, while there are signs of hope, the economy has yet to fully rebound. This is the time that companies should be redoubling its efforts to fully engage employees. It just makes economic sense. Recognition and incentives can help by fostering morale, individual motivation and improving corporate performance. But to properly implement recognition and rewards systems, a basic understanding of where and how to use them is important.
After the essential considerations of securing senior management support and establishing the strategic reasons for providing recognition in support of the overall mission and corporate goals, a plan must be developed to make full use of the value of recognition. One of the best ways to achieve that is through an “Umbrella Approach” in which all recognition initiatives are integrated in support of and in alignment with the corporate mission and strategy. Where single programs have popped up over time without regard for the mission, they may not be in alignment or may even be at odds with the mission.
The solution is to stop and rethink all recognition and award initiatives. Take a look at just what you are spending, where and how. Does each program make sense? Some things may need to go or be integrated into other programs. You can reconfigure all programs to be in support of the mission and to convey one consistent message. And since these programs feed into each other there is no conflict and you will likely see cost efficiencies generated by this synergistic approach. Often, companies need not spend any new dollars because they are reallocating existing budgets. The company may even see some costs go down through integration.
There are two types of recognition plans: formal and informal. Formal plans include things like service/tenure awards, attendance, safety, wellness and nomination programs. Informal programs include instant recognition, community achievement, teamwork awards and above & beyond behaviors. In both plans the criteria and behaviors you want to recognize and reward must be spelled out from the beginning and communicated well to all those involved. Make certain that recognition is sincere, specific and timely.
If you want to improve the bottom line, rethink your programs and the approach you take. Consider integration of all programs under one umbrella. You will help support the corporate mission while finding efficiencies in the process. Communicate the programs and how they support the corporate goals. Make sure employees understand how they fit into the success of the organization. Show employees they are valued by celebrating their successes and you will be creating employee engagement on a level you may not have thought possible!
Help employees feel like what they’re doing truly matters. “What really inspires us are leaders who visibly, palpably, credibly, and consistently stand for something beyond profit, and who give us the opportunity to get behind a meaningful mission.”
(Fast Company Blog, February 7, 2011)