Recognition

PERSPECTIVE

Many leaders use recognition to engage and retain employees. The problem: Most organizations think of recognition as a stand-alone initiative, rather than a crucial piece of their culture. This has allowed the majority of programs to become stale and lose much of their impact on individuals and teams. The solution: Organizations need to look closely at their recognition strategies—from career anniversaries to celebrating everyday achievements—and ensure each initiative supports their culture and the employee experience. Whenever possible, recognition should integrate with the flow of work to make it more timely, authentic, and effective. The outcomes are difficult to overestimate.

INTRODUCTION

Despite all the connections technology enables, employees still often feel separated from each other. Employee recognition, at its core, exists to help people feel more attached to their peers, their work, and their organization. And it’s even more important in challenging or uncertain circumstances.

Unfortunately, good efforts and the best intentions are no match for outdated employee recognition practices. As the workforce and workplace have evolved, most recognition programs have not. Virtual teams, decentralized work, and new technology integration require equally progressive approaches to recognition.

Making it an inextricable part of culture is the only way to ensure recognition achieves its purpose. A fusion, rather than an infusion, is overdue and necessary. It’s also entirely possible when you combine modern tools of communication with genuine, personalized appreciation.

EXCELLENT RECOGNITION PROGRAMS ARE RARE

While recognition is a fundamental way to show appreciation for employee accomplishments, not all organizations have formal recognition programs in place to do so. Service anniversary recognition, for example, seems commonplace, but our research shows only 68% of employees have a program for it. Likewise, 64% of employees said they had a program to recognize work that exceeds expectations, and only 56% of employees had a program to thank people for small efforts that made a difference.

These types of perceptions take a toll on employee morale. According to the data, employees who held them are 37% less likely to feel appreciated.

So why are almost half of employee recognition programs outdated and disconnected? In many cases, the programs were launched as discrete HR initiatives or employee benefits offerings and were not designed to evolve. In other cases, employee recognition wasn’t a priority, so organizations didn’t invest the time, resources, or strategic planning to update or modify the programs. In general, recognition programs are most effective when they are part of a larger initiative tied to cultural goals, so they can grow and adapt with the culture.

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RECOGNITION ISN’T AN INTEGRATED PART OF WORKPLACE CULTURE, YET

Organizations achieve best-in-class recognition when they make it a foundational, integrated piece of their culture. Recognition that’s inconsistent, arbitrarily used, or only available to certain employees can’t provide any long-term impact.

It may help to define “integrated” in this context. It means noticing and appreciating success is the norm—accomplishments elicit more than silence, rewards don’t feel automated, and recognition is an instinctive, natural response to great work across the enterprise.

Through years of research, the O.C. Tanner Institute has developed eight specific measurements, based on employee perceptions, to determine the level of recognition integration, as visualized below.

Figure 5. INTEGRATED RECOGNITION
Eight ways to assess how deeply recognition is ingrained in an organization’s culture.

Integrated recognition is evident when it happens frequently and in personal ways.

The research of WorldatWork, a global association for HR management professionals and business leaders, had similar findings: only 17% of organizations have “deeply embedded” recognition programs, and, at the other end of the sample, 19% have no recognition program at all.²

Logically, integrating recognition becomes more complex as organizations grow and spread out. For example, larger or multi-national corporations must consider all of their locations because integration varies significantly from country to country and many geographies may have their own siloed initiatives. The chart below shows standardized scores of integration compared to the US.

As organizations work to integrate recognition into their cultures, they find that different employees have different perceptions of it. Below are some notable examples of how likely various groups are to feel recognition is embedded in their culture:

• Individual contributors are 32% less likely, while leaders are 46% more likely
• Minority employees are 39% less likely
• Non-remote workers are 4x more likely
• Female employees are 34% less likely; side note: a Deloitte study found that while employees want to be thanked for everyday efforts, 36% of women prefer that thank-you to be written³
• Gen Z is the least likely generation to feel recognition is embedded in culture. Millennials and Gen X are more likely (16% and 15% respectively), and Baby Boomers are the most likely (33%)

Understanding these differences becomes especially important as organizations expand their diversity and inclusion efforts because ensuring recognition is available and given to employees equally is a vital part of integrating it.

No doubt, recognition integration takes a concerted effort and investment, and not just in financial resources. It takes commitment from all levels of leadership, time to develop strategic recognition practices, and patience to nurture recognition across all areas of the business. But the results are well worth the work.

“There is now the expectation that we appreciate great work. Appreciation has become a part of who we are. People use that word and talk about it. It’s part of the heartbeat of our organization, and it provides all of us hope when we see the good things people are doing across the organization.”
—KAREN ACKERMAN, VP OF HUMAN RESOURCES, CENTRA HEALTH

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RECOGNITION BECOMES MORE TECHNICAL AND MORE PERSONAL

The future of employee recognition will carefully blend new technologies and individualized experiences (“tech and touch,” for short). Technology will facilitate the act of recognizing great work. But software-only initiatives that rely on a Facebook-type wall of accolades or recognition transactions consisting of emailed thank-you notes are not enough.

Moving forward, organizations will supplement the latest tools with personal, meaningful, genuine recognition experiences. Intentionally pursuing a high-tech and human-touch recognition strategy will make all the difference in helping people thrive and deliver great work.

RECOMMENDATIONS & IMPACT

The future of recognition is a blend of current technology and personal, high-touch experiences. To do this effectively, organizational leaders should consider the following recommendations:

1. Apply modern recognition technologies

The right technology can expedite giving and receiving recognition, communicate employee accomplishment throughout the organization, and make it easy to choose exciting rewards. It can also provide useful data to evaluate success and integrate into other HR or performance management tools. Nonetheless, many organizations are not using modern recognition technology, and they face an uphill battle: only 40% of employees believe their organization will invest in future innovative recognition technology.

In our Technology chapter, we discussed Cultural Technology Innovation Readiness (CTIR), which also applies to recognition technology. When organizations scored higher in CTIR, they were 3x more likely to have recognition embedded in their current culture, and employees were 59% less likely to feel their program is stale, 63% less likely to feel it’s outdated, and 41% less likely to feel it’s used to disguise compensation.

Organizations that choose to upgrade their recognition technology should focus on two main aspects: integration and innovation.

Technology integration. Many organizations and even some recognition providers opt for separate portals and systems to support recognition, expecting employees to step out of their normal workflow to participate. In some cases, this may be necessary, as many organizations do not have a robust technology ecosystem, or they grapple with dispersed employee groups that use technology differently (or rarely use it at all). For these organizations, separate systems may be required.

But for most others, the goal should be to bring recognition into the flow of everyday work. They should seek to embed the ability to recognize employees directly into employees’ existing processes. This means including the capability to recognize others in email, web browsers, social tools, intranets, HR portals, and other programs employees already use daily. For offline employees, this means enabling mobile access and implementing ways to interact with online recognition technology within their existing tools and spaces.

Placing recognition in the flow of work facilitates giving and receiving recognition more quickly and frequently. And recognizing in real time is a distinct advantage. Brian Kropp, VP of the HR practice at Gartner, says, “Every day that passes between when a positive employee behavior happens and when the recognition is given, the value of that recognition declines.”⁵

Having an organizational focus on technology integration leads to a 3x higher likelihood that recognition is embedded within a culture. It also decreases the perception that recognition is stale by 55%, outdated by 51%, and used to disguise compensation by 57%.

Technology innovation. Tools like artificial intelligence (AI) and machine learning enable organizations to use recognition data to inform culture efforts and assist diversity and inclusion initiatives in entirely new ways. Data showing who is recognizing, being recognized, and for what, can be integrated with other demographic and performance information to help improve the employee experience for everyone.

Currently, less than half (45%) of organizations are considering using advanced technology to support recognition efforts and enrich their understanding of culture, and just over half (52%) are using it to support diversity and inclusion efforts. But advanced technology can be a powerful complement to these initiatives.

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“Employees can do their banking on their phone, they can buy a car on their phone, they can get directions on their phone. But when they come to work, they often have to step back in time in terms of the dated technologies they’re asked to use. You don’t want your technology getting in the way of people’s ability to recognize one another.”
—BRIAN KROPP, GROUP VP, HR PRACTICE, GARTNER

2. Connect employee accomplishments to customer impact

Many organizations have created compelling purpose statements and employee value propositions that inspire and engage employees. But what’s often missing is a fundamental connection between the employee and the customer value proposition. Some have tried to bridge the gap by recognizing employees based on customer feedback. While this has an impact, there is opportunity to make a more direct connection between employees’ work and its impact on customers.

Why is this important? Because employees want to feel they are making a difference; that their work matters. The best way to demonstrate this connection is by showing how an employee’s work affects the lives of customers, clients, patients, or end users. It gives their work meaning and relevance. We asked customer-facing employees to rank the recognition they receive based on how important it is to their overall employee experience. The result: Recognition from direct leaders and recognition from customers nearly tied for the most important form of recognition.

Organizations have typically focused on recognition for years of service, achievement, and everyday effort. But they should also focus on creating more formal processes for customer feedback and linking employee accomplishments more directly—and consistently—to customer impact. When organizations have recognition programs in all four areas, employees are far more positive about recognition at their organization.

3. Elevate the recognition experience

The growing role of technology in employee recognition raises the risk of recognition practices becoming transactional, rather than an authentic expression of appreciation. This can make recognition feel less genuine and reduce its effectiveness at improving culture. Again, effective recognition combines the best of tech and touch, but even with the right technology, the human touch is often missing. The goal is to move recognition from transactions to meaningful experiences for all involved. Personalization plays an important role and is something leaders and teams can incorporate in the specific ways they present recognition.

A full 70% of employees say recognition is most meaningful to them when it is personalized. That doesn’t always happen, however. Only about half of employees believe their leader understands how they want to be recognized, and about one-third of employees report the way they receive recognition makes them feel uncomfortable.

When organizations invest effort into understanding how individuals want to be recognized, and then personalize recognition based on those preferences, there is a substantial impact:

Advanced technologies have a place in personalizing recognition. AI’s deep data-mining capabilities allow organizations to understand and individualize recognition experiences and awards, especially across diverse, distanced teams.⁶  This tailoring helps reinforce the sense that employees are valued as individuals for their contributions. But ultimately, the leader plays the most important part in personalizing the recognition experience.

The next few pages outline ways leaders and peers can personalize the recognition experiences for service awards, achievements, and everyday efforts. You’ll notice that the relative importance of the award, the setting, and the presentation elements differ based on the type of recognition given. There are also global nuances to keep in mind, as employees in different geographic regions have different preferences. Organizations can use these insights to create special, genuine recognition experiences for their people.

Service award programs

When acknowledging years of service or career celebrations, the awards themselves are important to the employee, as is having a celebration to reflect on their career with coworkers and leaders.

The awards employees found most meaningful for service award recognition are (in no particular order):

• Gift/merchandise
• Custom or personalized symbols
• Meal out*
• Cash or gift cards*
• Experiential gifts*

*Note: In the US, these types of awards do not offer tax advantages that come with having a service award program that includes tangible awards.

The most preferred elements of a service award recognition experience are:

• Connecting employee’s work to organizational purpose
• Appreciating the impact employee’s work has on their teams
• Showing how employee’s work impacts customers
• Demonstrating how employee contributes to the success of their organizations

Employees also enjoy individual celebrations with their leader as well as larger celebrations with their teams.

This said, we do see nuances in different geographic regions. For example, in China and Saudi Arabia, employees prefer to hear stories about their above-and-beyond achievement during career celebrations, while in Russia, the UAE, and the UK, they like to be appreciated for how they interact with others. Employees in the UK also favor more subdued, conservative recognition experiences.

Achievement recognition

To celebrate achievements, employees value being recognized in front of their coworkers and leaders. And if it’s relevant to the achievement, they like to hear how their work benefited their teams.

The awards employees most preferred for achievement recognition are (in no particular order):

• Custom or personalized symbols
• Experiential gifts
• Gift/merchandise
• Cash or gift cards

Overwhelmingly, employees want their recognition to include the impact their work had on their teams and the organization.

Like career anniversaries, there are global nuances for achievement recognition. Employees in Brazil, Mexico, and South Africa like to see how their work affects customers. Conversely, praise for a unique skill set is preferred in China, Hong Kong, Singapore, the UK, and the US. Employees in Australia, the Netherlands, and the UK prefer their achievements be recognized in one-to-one settings.

Everyday-effort recognition

As with achievements, the success of everyday-effort recognition depends more on where it takes place than how it’s presented. Most employees prefer it be in front of their teams and like to be appreciated for the impact their work had on their coworkers.

The most popular alternatives to a group setting are a one-to-one discussion or a verbal thank-you. And favorite awards for extra effort include (in no particular order):

• A meal out
• Gift/merchandise
• Experiential gifts
• Cash or gift cards

Global nuances exist here, too. Employees in Brazil, China, Saudi Arabia, and Singapore prefer hearing how they contribute to the success of their organizations, while Dutch, French, Mexican, and Russian employees favor knowing how their work impacts customers. Countries where employees would rather pass on this type of recognition than be recognized too publicly are Australia, Brazil, Canada, France, Germany, Hong Kong, and Japan.

CONCLUSION

Employee recognition is more important now than it has ever been. It can neutralize the negative effects of isolation, disconnection, and burnout, especially in difficult times. It connects employees to their organization’s purpose, their personal and team accomplishments, and each other. And it enables employees to thrive even as the workplace constantly evolves. But it only works when it’s done well.

Current recognition strategies and programs must be reassessed to ensure they support organizational culture and the employee experience. And for recognition to be most effective, it must seamlessly integrate with both the culture and the natural flow of employees’ work.

The organizations that thrive in the next 10 years will create cultures that value and appreciate their employees. Recognizing individuals proves to them that they belong and are a critical part of the organization’s success. Those that do this effectively, with the right mix of tech and touch, will see a powerful impact on their people and business results.

RECOGNITION—4 KEY TAKEAWAYS

The best recognition experiences blend technology with personalization.

Recognition tools should be integrated into the everyday flow of work.

Employees want to know how their work impacts their customers.

The recognition experience must be elevated from the transactional to the personal.

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