A practical look at building and implementing your perfect performance management process.
No matter where you look, you'll find a conversation about employee recognition.
Pepsico CEO, Indra Nooyi made headlines when she revealed that she writes 400 letters per year to the parents of her senior execs. And in his trending LinkedIn article, Global CTO at DailyMail Online and Metro.Co.Uk, Oleg Vishnepolsky makes a strong but surprisingly simple case for employee recognition.
His story is barely 300 words in length, yet it illustrates with perfect clarity just how easy it is to get employee recognition right.
So why do so many of us still miss the boat?
Don't get us wrong, we love tech, but HR is overflowing with it.
With tools for everything from sending automated birthday GIFs to doling out points on a Slack scoreboard every time someone restocks the toilet paper—let's just say, it's easy to lose sight of why these tools exist in the first place.
So what is employee recognition, really? Here's how some of our favorite HR thought leaders define it.
To Ben Eubanks, employee recognition is an essential driver of innovation.
The expert HR analyst and founder of upstartHR, explains that with the right approach to employee recognition, you can drive innovation across every department within the organization (not just the flashy R&D teams).
"It might not be your job as an HR leader to recognize employees, but it is your job to design/build the system that your employees and managers use. We know that recognition improves employee engagement, and innovation provides an opportunity to target those employees that are dreaming up new ideas and methods to improve the business."
By showing all your people that you value their input and ideas, you're opening up every system, process and product to new efficiencies that can take your organization to a whole other level. Here's Ben again:
"The outcomes for submitting ideas can be as simple as peer/social recognition or it could include financial incentives and rewards. Whatever the case, be sure to create a system and culture of recognition that makes employees want to find smarter ways to work. Don’t just attempt to motivate your people—inspire them."
An important piece of this is making sure you recognize employees by acting on their suggestions and ideas. Even if it's just on an experimental basis, showing your commitment to smart innovation will always take you farther than simply talking about it.
We love most things Kris Dunn has to say. The Kinetix CHRO and author of the HR Capitalist blog gave an epic shoutout to low-key recognition, using awesome examples of low-key ways to communicate your appreciation to employees who might not be comfortable with public recognition.
Kris points out that while we're used passing out awards and making big announcements in the white-collar world, this may not be the best approach for introverts or blue-collar workers.
"The broader point for any of us thinking about recognition is simple. To maximize your approach and the subsequent results, you’ll have to customize your recognition programs for different employee segments.Failure to consider when and how to recognize individual segments can and will be held against you in the court of employee sentiment. If you’re wondering why your managers don’t use the recognition tools you provide, it’s likely because you haven’t provided them with choices that work for the employee types they manage."
Employee recognition is an inherently personal thing. Set your managers up to win by taking the time to figure out what works best for each individual on the team.
One of our favorite stories of employee recognition in action, involves a manager and a millennial (obvious, right?).
Fistful of Talent author and former HR Manager Tim Sackett explains how, after conducting a performance review for a high-performing millennial, his executive sent a handwritten letter to the employee's parents thanking them for raising a rockstar.
Here's what happened next according to Tim:
"About a week later, I got a call from the front desk. It was the employee’s father, asking the front desk to talk to the executive and telling them they were the father of this employee. The front desk person called me, believing something bad must have happened, so I took the call.
I spoke with a man in his 50’s who had a hard time holding back tears of pride, thanking me (and our executive) for sharing such a wonderful story and how proud they were. The employee also came in to my office to thank me for doing this – believing I must have put the executive up to it (it’s an HR touchy-feely thing).
The employee said that they could never imagine a better place to work. A 3-minute hand written letter = powerful recognition and engagement."
How's that for appreciation?
At first glance, it's tempting to see this as just another story about performance strategies for millennials, but one of the most beautiful things about employee recognition is that a little truly goes a long way. Or as Tim says, "Employee recognition doesn’t have to be hard, or take a long time, or be a part of a process. It has to be genuine, in the moment and meaningful. Too many times we forget this on the organizational front."
By now, we know there's a reason Oleg's post has 31,454 likes (at the time of writing this article). And we know it has nothing to do with star-studded perks and rewards programs.
But surely we can't just throw employee recognition to the wind and hope that it magically happens, right? Right.
Or at least, mostly right.
The problem is work gets in the way. We get caught up in the day-to-day and forget all about the people who make work happen.
According to research from management consulting firm Cicero Group, employees found that a simple "well done" was more effective for engagement than a 5% increase in salary.
Do you need really need an employee recognition program to make sure these simple words are being exchanged?
Yes, you probably do. But it's important to note that, at the end of the day, you can have the trendiest employee recognition program this side of Silicon valley, but it will mean zilch to your employees if you don't lead with integrity.
But if the research on employee recognition is to be believed, any effort you put into making your people feel appreciated will definitely come back to you in the form of hard returns for the business. If you're ready to do it right, there is a very solid business case to be made for employee recognition.
We all love having something to look forward to and designing a program to reward and recognize your can definitely encourage the whole office to develop a deeper commitment to each other and the business.
Here's some math that makes a clear case for employee recognition:
If that's not enough to convince your CEO it's time to invest in an employee recognition program, try this:
Companies who spend a minimum of 1% of payroll on recognition are 79% more likely to have better financial results.
Despite the massive market for employee incentivization, employee recognition programs don’t have to cripple your budget.
Employee recognition programs are not what they used to be and as the experts note, real employee recognition has basically nothing to do with mass-manufactured trophies or bringing your pet to work, and everything to do with how you treat your people in the day-to-day.
Here are five simple ways to make your employees feel appreciated.
According to Harvard Business School professor, Francesca Gino, “Receiving expressions of gratitude makes us feel a heightened sense of self-worth, and that in turn triggers other helpful behaviors toward both the person we are helping and other people, too.”
Francesca and Wharton professor Adam Grant measured a groups of students’ sense of self-worth after receiving feedback on performance. They found that 25% of the group that received just an acknowledgment felt higher levels of self-worth, compared with 55% of the group that received thanks.
Apparently, there's a pretty big difference between "Good job" and "Thanks for doing a good job."
The days of tenure-based recognition and employees of the month are long gone. Those methods just don't work on younger employees, especially considering how often they change roles.
As Gallup’s chief scientist Jim Harter puts it, "recognition is a short-term need that has to be satisfied on an ongoing basis -- weekly, maybe daily."
And nothing says you care more than taking time out of your hectic schedule for a set one-on-one. There are a number of reasons to meet privately with your employees. If you're looking for a little inspiration (or questions to get the convo started), start here with our post on 11 Types of Employee One-on-ones.
We love managers, but sometimes their faces are just too close to the mirror to see what's really happening within the team.
Peers who work shoulder to shoulder on the business's frontline will always know when someone deserves a pat on the back. Peer-to-peer recognition can also help offset some of the rater effects that can skew a manager's perspective and contribute to a broader environment of support and recognition.
The best way to encourage peer-to-peer recognition is to simply lead by example. Don't be afraid to say something nice about a high-performing employee or manager, even if they're from a separate or "competing" department. You might be surprised at how quickly others follow suit.
According to Mercer, 78% of employees would stay with their current company if they knew there was a clear career path for advancement. In another survey, 53% of employees said respect for their knowledge and experience was their biggest expectation from management.
Performance reviews are the perfect opportunity to show your employees you appreciate their potential and you're ready to take advantage of it. Remember, recognition doesn't always have to be delivered in the form of a pay raise or promotion (though those things do help!)
What matters most is that you have a system in place to help them feel great by keeping that momentum toward the bigger picture.
If your employees are disgruntled and disengaged, it's usually due to a lack of follow-through on the part of the manager or exec team.
Any exec can call an employee into their office and ask for the next big idea, but not many can fearlessly hand over the trust, resources and autonomy it takes to let the employee run that idea past the finish line.
If you're committed to showing your employees you care, you must have a system in place for delivering and collecting feedback on both sides of the table, and actively follow up to measure your progress on shared goals.
According to The University of Warwick, happier workers are 20% more productive. And Gallup reported that unhappy employees cost the US economy over $450 billion per year. If you don't address unhappiness it can spread throughout your team and wreak havoc on organizational productivity.
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