Integrated Recognition

PERSPECTIVE

It would be difficult to rank the insights in this year’s report, but the unambiguous linchpin of this chapter is that recognition leaves a deep impression. Essentially, employees’ past experiences with recognition strongly shape their current and future perception of it. And employees who have experienced subpar recognition elsewhere bring a skepticism and jadedness with them. The best solution we found is to make recognition part of employees’ very first experiences, continue it throughout their early tenure, and use it in consistent, integrated ways after that. This comprehensive approach not only dilutes the negative effect of any past disappointments, it maximizes the likelihood of high performance in the future.

INTRODUCTION

Done well, employee recognition dramatically helps people feel valued and included in a workplace community. However, when it’s generic, impersonal, or rare, it’s much less likely to hit the mark.

By “done well,” we mean recognition that’s highly integrated into an organisation’s culture. And this involves much more than plugging recognition tools into a company’s existing technology. It means ensuring recognition is part of each employee’s everyday experience.

Through years of research, the O.C. Tanner Institute has developed eight specific measurements, based on employee perception, to determine the level of recognition integration (RI), as visualized in figure 7.

When recognition is integrated, it happens frequently for a variety of accomplishments, large and small, and comes from both leaders and peers. It’s personalised for the individual, seen across the organisation, and the programs and tools to give it are updated often.

Organisations that achieve high RI do an exceptional job of ensuring recognition is embedded into their culture.

Highly integrated recognition has a powerful impact on organisations, increasing the odds of several positive outcomes and decreasing the odds of some negative ones:

• Great work (+1,181%)
• High engagement (+784%)
• Thriving culture (+648%)
• Employee attrition (–29%)
• Employee burnout (–80%)
  

Regrettably, only 21% of workplaces worldwide have highly integrated recognition.

We asked ourselves why that number is so low, especially since, for years, more organisations have put more effort and resources into improving recognition. The answer isn’t as simple as improving recognition programs or tools. An underlying discovery makes it challenging for any organisation to achieve a high RI culture: Memories of recognition experiences from prior workplaces have a profound and enduring influence.

“Part of why it’s so important that we weave recognition and appreciation into the fabric of our culture and elevate the importance of its impact is because now, more than ever, we understand that recognition, just like compensation and benefits, is a fundamental part of the associates’ experience at work.”
—NICK ROSENTHAL, SENIOR ASSOCIATE IN HR COMPENSATION, CAPITAL ONE

PREVIOUS RECOGNITION EXPERIENCES AFFECT EMPLOYEES’ PERCEPTION OF RECOGNITION IN THEIR CURRENT JOBS

Past experiences can shape or bias how we perceive current and future ones, even when our situations are different. And this applies to employee recognition as much as any kind of experience.

Studies by MIT show that the human brain encodes prior experiences, using them as signals and potentially biasing our perception in existing, new, or uncertain environments. Our brains subconsciously use these memories to create expectations of how things should be.¹ This explains why past recognition experiences shape our perceptions and expectations of recognition moving forward.

In our research, employees reported having, on average, four non-monetary and three monetary recognition experiences each year, with 71% saying “not feeling valued” was a significant part of why they left their previous jobs. Only 11% of employees previously worked for a company that scored high in RI.

The data suggest these deficient recognition experiences don’t fade away easily. People who had poor recognition experiences with previous employers have much better odds of reporting several shortcomings in their present environments:

• Recognition is inauthentic (+355%)
• Leader is not genuine when giving recognition (+283%)
• Would prefer not to receive recognition (+427%)
  

Combatting employees’ previously poor experiences (due to recognition that was infrequent, impersonal, or flawed in any number of ways) is now one more reason organisations need cultures with highly integrated recognition.

It’s also important to note that while cultures with low RI will negatively affect employee perception of recognition in their future jobs, the opposite also appears true. Employees who’ve worked in cultures with average or high RI are more positive about their current organisations.

This means organisations need to be prepared for employees who come from cultures with high RI if they hope to match or exceed expectations.

Our research shows employees who experienced high RI in their previous jobs but low (or even average) RI in their current job are more likely to feel recognition at their organisation is inauthentic and meaningless.

This is also true for several cultural perceptions. Employees who experienced high RI in their previous jobs but low RI at their current jobs are typically more pessimistic about aspects of their organisation’s culture.

The bottom line: Past recognition experiences, whether positive or negative, amplify the effect of current ones. Again, organisations must highly integrate recognition into their cultures to offset or match the past experiences of their employees.

“I guess because recognition was so important to my leaders and team at my last job, everything here falls flat. It isn’t that it is done differently, I understand that every company is different. It is just that they could do a better job here, and they don’t. They choose not to.”
—EMPLOYEE FOCUS GROUP PARTICIPANT

HIGH RECOGNITION INTEGRATION REQUIRES GREAT FREQUENCY

How often does recognition occur in cultures with high RI? The benchmark is now at least every other week.

More frequent recognition contributes to high RI by increasing the amount of recognition given, as well as expanding the number of people giving recognition and the reasons for recognition.

Organisations with low RI show fewer sources (typically leaders and current team members giving recognition), while those with high RI have more (leaders, current and previous team members, and department peers giving recognition). Expanding the eligible sources of recognition improves frequency and ultimately RI.

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Organisations with low RI also show disproportionately segmented reasons for recognition, which can significantly impact teams and projects. By contrast, organisations with high RI have more reasons, such as giving extra effort, helping coworkers, delighting customers, improving projects, etc. Providing more reasons and ways to recognise inspires more recognition and increases RI. And as the frequency of recognition increases, it helps ensure employees receive recognition for a wider variety of accomplishments.

SMALL, FREQUENT RECOGNITION MOMENTS ARE MORE BENEFICIAL THAN BIG, RARE EVENTS

Many organisations save their employee recognition for a once-a-year event, like Employee Appreciation Day. And when it comes to budgeting, some spend too little, often on small, generic trinkets, while others spend extravagantly—but no more effectively—on cash, gift cards, or awards.

Research on gift-giving shows expensive, infrequent gifts do not have the long-term impact one might expect. Smaller gestures given more often, over time, are much more meaningful and valued—especially if they’re personalised.² The same proves true with recognition.

Frequent, tailored recognition experiences spread throughout the year have a larger, more lasting impact on RI and workplace culture than singular company-wide, all-employee events, no matter how much organisations spend.

We conducted an experiment on company-wide recognition to determine thresholds of effectiveness. The findings were insightful. First, we discovered that giving a company-wide award with a value of $5 actually decreased the probability of engagement and perception of recognition authenticity. An incremental improvement appeared when companies offered awards worth $50, $250, and $500 (although the improvement is smaller at $500). We included awards worth $25 in our pilot study, but their impact was not substantively different from that of $5 awards.

Because organisations with high RI give recognition frequently, they already achieve increased engagement and recognition authenticity without needing to spend larger amounts on company-wide recognition.

A $5 award only marginally decreases the likelihood of engagement in cultures with high RI, but the negative impact of a $5 award is amplified in cultures with low RI. We found $50, $250, and $500 awards substantially increase the probability of engagement in high-RI cultures. In low-RI cultures, a $50 award performs worse than the control group, while $250 and $500 awards lead to smaller increases in engagement.

We see similar results with recognition authenticity. Lower amounts of company-wide giving decrease the likelihood that recognition will be perceived as authentic in low-RI environments. And the higher amounts of $250 and $500 do not considerably improve it.

There are several important insights here. First, because organisations with strong RI have invested in holistic, meaningful, and frequent recognition experiences, they can invest fewer dollars, per experience, in company-wide recognition and still see a positive effect on outcomes.

Second, small-dollar awards are insufficient and even counter-productive for company-wide recognition in any culture. (Such budgets would be better spent empowering employees to give recognition to one another for everyday efforts and achievements.) Awards worth between $50 and $250 are more effective.

Third, for organisations with larger budgets (perhaps $500 per employee for a single event), the data indicate that splitting it into two or more recognition moments can have a greater impact than giving it all at once.

To sum it up, establishing and maintaining high RI requires more frequent giving from more sources for more reasons. And organisations can make intentional, straightforward adjustments to their recognition solutions that allow more frequent, meaningful, holistic recognition and ensure all employees feel valued and appreciated—no matter what the employees’ prior recognition experiences.

RECOMMENDATIONS

Organisations that want a culture with integrated recognition and more positive experiences for their people should build the following into their employee recognition strategies.

1. Onboarding experiences that are rich in recognition

Since employees bring their past recognition experiences to your organisation, onboarding is a perfect opportunity for you to show appreciation from day one. Unfortunately, less than half (43%) of employees reported an onboarding experience that was more than just a day of orientation and a folder of benefits.

Instead of handing out a water bottle or t-shirt and zipping through the company history, consider creating a curated, integrated-recognition experience for new employees. According to our research, there’s a baseline of onboarding experiences organisations with high RI provide.

Only 33% of employees report receiving a foundational onboarding experience, and even fewer (19%) have experienced the ideal. Providing opportunities to recognise and be recognized during the onboarding process has both immediate and long-term impacts on employee perception of culture and inclusion. Onboarding is the perfect time to connect and introduce people to a culture with high RI in positive and memorable ways. It’s also a great chance to neutralize their previously poor recognition experiences as they start at your organisation and show them what true RI looks like.

Our latest data show a traditional onboarding experience is suboptimal and ineffective. The ideal onboarding experience with integrated opportunities to recognise and be recognized creates an immediate and sustainable impact and helps offset employees’ previously poor recognition experiences.

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2. More holistic recognition

To ensure recognition is thoroughly integrated, organisations must provide a variety of ways, reasons, and people to give it.

The people should include both leaders and peers across the organisation. Reasons can range from everyday effort to above-and-beyond work to major achievements to career milestones. (There should never be a shortage of meaningful objectives worth appreciating.) And when it comes to ways, organisations should give employees a wide selection of methods and tools for recognising, as well as access and authority to them.

The following are the fundamental recognition tools most organisations need to move from low RI to average RI:

• personalised messages of appreciation
• Verbal recognition as part of a meeting or gathering of colleagues
• Online formal recognition platform
  

For an organisation to move from average RI to high RI, its employee recognition programs should incorporate the following:

• Micro-monetary recognition, such as monetary eCards
• Symbolic awards, particularly for prestigious accomplishments
• Celebrations that include others being recognized
• Time for employees to socialize after recognition moments
• Recognition from customers
• Recognition tools and solutions embedded within an existing technology ecosystem
  

The more ways an organisation gives its people to recognise each other, the more frequently recognition will happen. And the more frequently it happens, the more it becomes an integrated and natural part of the employee experience.

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3. Targeted recognition training

Not all employees, or even leaders, know how to give recognition as meaningfully as they can. Nor do they completely understand the benefits of it. This means there’s a large opportunity to focus resources and training on recognition best practices.

To move from low to average RI, organisations should train senior leaders, frontline leaders, and all team members about the role of recognition, including:

• Why recognition matters
• How to personalise recognition in a meaningful way
• Why recognition is important for both large and small accomplishments
• Why recognition should be a priority
• How to give recognition purposefully
  

To move from average to high RI, organisations should emphasize how to give holistic, personalised recognition, focusing on the impact of recognition and providing guidance for creating meaningful recognition moments for all employees.

These two targeted strategies, along with proper recognition tools, increase the odds of achieving an average RI by 745% and a high RI by 869%. The best employee recognition programs have resources and training embedded in their tools to ensure leaders and employees create positive recognition experiences in real time.

INTEGRATED RECOGNITION—KEY TAKEAWAYS

An employee’s previous recognition experiences influence current perceptions of recognition.

Curated, personalised onboarding experiences can help reverse poor perceptions.

Ensure recognition is given frequently and for a wide variety of reasons.

Target recognition training for maximum impact.

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