Recognition Has a Proven Track Record

Recognition has a proven track record of engaging employees and is especially critical after a long, lean period, when employees have often been overstretched and under-rewarded.

A recent Manpower study showed that over 60 percent of workers plan to look for new jobs as soon as the economy provides opportunities. After a couple of years of the “lucky-to-have-a-job” message, employees are looking for more stability, opportunity, and appreciation. Proving to a tired workforce that they are individually appreciated may be the only way to engage them and combat exodus through the recovery.

A one-size-fits-all approach to recognition programs is not the answer and instead, may leave too many employees feeling cynical, disengage those who are “borderline” and lead them to conclude management “doesn’t even know what I value” — increasing the likelihood of a loss of talent.

In this environment, building a program that is tailored to the needs of each audience is essential. While sales forces respond to public recognition events and proudly display an award in the office, Millennial workers may need much more frequent – even if modest – recognition or prefer an award they can enjoy outside the office on their own time. For many, a sincere and heartfelt “thank you” from the company president can make the difference in loyalty.

Much has been asked of employees during the darkest months of the recession.

It is critical to let them know their hard work not only furthers the success of the entire group, but that it is acknowledged and appreciated.

Employee Engagement Study

In the past few years, employee engagement has become one of the biggest and fastest-growing management trends, and with good reason: There is ample evidence it works. While part of this is common sense – an engaged employee is almost by definition a happier, more productive employee – hard numbers back it up as well.

As part of its 2007-2008 Global Workforce Study, consulting firm Towers Perrin (now Towers Watson) surveyed 90,000 employees in 18 countries about a number of topics, including what drives engagement – the desire and willingness of employees to go the extra mile in their jobs, to put in discretionary effort. While the firm came up with a number of answers about how companies drive engagement, the most eye-catching part of the survey was why. Towers Perrin compared the financial results of 50 multinational companies. In the course of one year, the companies with high employee engagement posted a 19 percent increase in operating income and a 28 percent increase in earnings per share; conversely, those with poor employee engagement scores saw operating income decline by nearly one third, and earnings per share drop 11 percent. More broadly, the firm has concluded that a 15 percent improvement in engagement will cause 2 percent improvement in a firm’s operating margin.

Best Companies for Leadership

The 2009 Hay Group study shows the Best Companies for Leadership to be right at the cutting edge of current trends in demographics and employment. Recognizing concerns about work/life balance and the wider social contribution of their work, they are much more likely to make it easy for people to work from home – and they use their corporate social responsibility programs to attract employees.

The best companies are almost twice as likely to have a high proportion of women in senior posts. And nearly all of the best companies look for people with an appreciation of global issues, compared with less than two-thirds of their peers. This indicates they recognize that in today's market, a globally inclusive approach is important, as is one that reflects the importance of a gender balance in the workplace.

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"The cultures of The Best Companies for Leadership help them to attract and retain the leaders they need."

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It's not just about direct investment in leaders. The best companies create cultures in which employees can behave like leaders, even if they have no formal position of authority. This has two important consequences.

Hay Group research shows, unsurprisingly, that well-motivated, 'engaged' employees perform better in a way that even feeds through to the bottom line. But when they are empowered by a culture that actively encourages them to take initiative, the performance gains are even higher. And by encouraging employees to step up to leadership opportunities, the Best Companies for Leadership are 'seeding' the next generation of leaders within their organizations.

The bottom line is... all this feeds though to the bottom line. The Hay Group Top 20 companies produce significantly better shareholder return than the S&P 500. And those firms that both engage and empower their employees see revenue growth 4.5x the norm. Proof if any were needed, that a forward-looking approach to leadership pays off.

Learn More at the Hay Group

Talent + Performance Strategies = Engagement

Companies who want to achieve outstanding performance need to be clear about their business strategy and objectives. Their strategy needs to be understandable and consistently applied. It needs to be part of the organization's culture.

Once understood, the organization's reward strategy needs to be aligned with achieving those business objectives.

The approach seems logical, but it takes a coordinated, concentrated effort to accomplish such an alignment. Studies have shown that if followed, tying business strategy to performance management will reap improved organizational performance.

Another important component of organizational performance is having the right talent, in the right place at the right time; in other words, talent management. Understanding what competencies are required to accomplish the business objectives is the starting point. Then, ensuring that your talent reward strategy is aligned to your business performance will help keep the right employees engaged. Engaged employees put in more discretionary effort, result in more satisfied customers and ultimately lead to improved organizational performance.