Why Implement an Employee Recognition Program?

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1 Why Implement an Employee Recognition Program? Research and Cases Supporting the Benefits of Employee Recognition Program Recognized employees feel engaged and motivated. Engaged employees are more productive and stay with companies longer. Higher retention and increased productivity increases profitability. Most respondents believe that their workforces would say that the effect of recognition programs on employee engagement, motivation and satisfaction are positive or extremely positive. Organizations that offer at least one recognition program and that have a low turnover rate (0%-5%) report statistically more recognition programs in place than the medium or high turnover categories. After years of service, the next highest objectives for implementing recognition programs were creating a positive work environment and motivating high performance. A key to the success of the recognition component of the total rewards package is whether it motivates workers in ways that increase the level of engagement with their job and their employer.

2 Gallup found that only 29% of workers are engaged, while 54% are not engaged and 17% are actively disengaged. Gallup estimates the cost of this disengagement to the national economy at $300 billion a year. According to a Gallup poll, recognition and praise are among the five most important factors in determining such key business benchmarks as employee retention, customer satisfaction, productivity, and profits. The relationship between each employee engagement element and performance at the business/work unit level is substantial and highly generalizable across organizations. More! In a large-scale 2004 study of employee engagement, the Corporate Leadership Council (CLC) found that only 11% of today s workforce demonstrate a very strong commitment to their organization, while 13% are actively non-engaged The middle 76% are described as being up for grabs. The CLC found when employee engagement increases, so does discretionary effort and retention by as much as 20 percentile points for the former, and 87% for the later. Businesses with higher than average levels of employee engagement find success with four types of business outcomes: Productivity 50% higher success rate Employee Turnover 13% higher success rate (less turnover) Profit 44% higher success rate Customer Satisfaction 50% higher success rate. Many employees receive no tangible reward for their work, and a study by the Society of Incentive and Travel Executives (SITE) Foundation, found 59% percent of employees believe their employers do not do enough to motive them.

3 How Can You Elevate Your Current Program? Recognition Program Best Practices: How to Elevate Your Program s Results This May, USMotivation was honored as the Overall Winner in Recognition Professional International s Best Practices Awards. RPI is the only professional association at the forefront of employee recognition. To earn the Best in Class distinction, USM had to demonstrate our knowledge and expertise in meeting RPI s seven best practice standards. These standards are how we design and operate our own recognition programs as well as our clients. We believe these are the key elements necessary for a world-class program. The following explains the standards, beginning with strategy and examples of how USMotivation employs these strategies, followed by a brief summary of standards 2-7. Standard 1: Recognition Strategy The organization has a written recognition strategy that articulates the philosophy and objectives for all recognition practices, including day-to-day, informal, and formal recognition programs. It provides purpose and direction to encourage and reward specific employee behaviors that advance the organization s goals and objectives. At USM, we have many types of recognition programs as categorized by RPI. Day-to-Day Recognition recognition practices that are frequent (daily or weekly), low or nocost, often intangible, and often reliant on interpersonal skills for positive feedback that can be given to all employees at all levels. USM practices this type of recognition with our STARS program, in which employees can affix a star-shaped note to other associates doors when they feel an associate deserves to be recognized for a job well done in assisting another associate, achieving a company goal or exemplifying our guiding principles. Informal Recognition focuses primarily on performance achievements, goal accomplishments, and other milestones by individuals or teams that may occur monthly or quarterly). It may include low-cost awards, refreshments, point-value incentives, gift cards, and certificates. Informal recognition programs may be utilized by peers and managers, with incentives from peers to peers requiring management approval. USM has several informal recognition programs, including ecards, AIRGrams, our Buddy Program for new associates and our Employee and Sales Referral programs. Formal Recognition consists of structured recognition programs with clearly defined objectives, processes, and criteria linked to rewarding and recognizing individuals, teams, or departments on a company-wide level for achieving specific business targets, exemplifying specific organizational values, or performing actions that go above and beyond normal work expectations. Most formal recognition programs occur less

4 frequently (usually annually), involve more costly awards, and recognize a smaller percentage of employees (approximately 1% to 10%). USM s formal recognition programs include the GEM Award, for employees who have Gone the Extra Mile during a specific timeframe. Recipients are honored at the quarterly associate meeting and receive a plaque made up of the actual nomination which is read by the nominators. We also have the High Potential Employee program, designed to ensure our associates are given the opportunity to grow within the organization, understand their value to the organization and be recognized for their contributions; the Service Anniversary program that recognizes associate milestones on a quarterly basis and the Pinnacle Award program, an annual Formal Recognition program designed to incent and recognize sales and non-sales associates to achieve revenue, new account and organic targets. Standard 2: Management Responsibility Senior leaders and management should actively endorse and be held accountable for planning, supporting, reviewing and actively participating in the recognition programs. USM has several leadership teams responsible for active roles in our recognition programs: The Leadership Advisory Committee (LAC The Solutions group Associate Advisory Standard 3: Program Measurement Organizations should evaluate the effectiveness of their formal and informal programs using measures that are statistically reliable and valid and substantive in nature. At USM, Program measurement takes place in a number of ways throughout the year including monthly reporting, annual reviews by leadership and employee surveys. Standard 4: Program Communication Plan Organizations should establish and maintain a strategic communication plan that communicates all aspects of the recognition strategy, including program objectives, recognition processes, events, celebrations, tools, and a contact person for program information. USM has a comprehensive communications plan for each of its program that includes , posters, signage, contests, meetings and more.

5 Standard 5: Recognition Training Training is essential in creating a culture of appreciation; all employees, especially managers and executives, need to understand the importance of meaningful recognition and how to give it. As a leader in the recognition and incentive industry, USMotivation walks the walk of recognition principles within our own organization. We provide a variety of recognition training programs for associates. Standard 6: Events and Celebrations Celebrations and award ceremonies are effective ways to recognize its employees. USM takes many opportunities throughout the year to recognize and celebrate its employees. These celebrations range from large, planned travel events to spontaneous recognition of milestone accomplishments. Standard 7: Program Change and Flexibility Organizations should encourage flexibility in recognition programs and adjust to changing goals and objectives and the diverse recognition needs of its employees through feedback and employee survey programs. USM conducts review/change processes throughout the year. These extensive reviews ensure the programs are working and enable to find ways to enhance or improve them. Example of a Successful Enterprise Recognition Program USM Case Programs

6 Example of a Successful Employee Recognition Program USM Case Study USM believes organizations that implement enterprise recognition programs are likely to create the culture of recognition that leads to increased performance, and ultimately, higher productivity and profitability. Enterprise programs should include a variety of rewards that are linked to specific business objectives and desired behaviors realizing different types of people respond to different types of rewards. Choice is key! Client: Major Telecommunications Company Program: Started with a sales incentive travel program for top performers only. Now an Enterprise rewards and recognition program that includes: a retail sales recognition program a travel incentive program quarterly awards to move middle performers rankings and communications reporting and analytics Result? USM helped successfully align these programs to help drive greater overall employee engagement. The direct scientific correlation between employee engagement and the impact on customer engagement helped improve the employee retention and sales. In Contact us to find out how a welldesigned and managed employee recognition program can benefit your company. Visit us: