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Employee Recognition
Framework
A Guide to Designing Strategic
Recognition Programs
Member Roundtables A place where you can connect with other peers
and industry leaders to discuss and learn about the latest industry trends and
best practices;
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TABLE OF CONTENTS
Introduction 4
What Is Recognition and Why Does It Matter Today?
Recognition Defined
11
17
17
19
39
68
87
Final Thoughts
91
93
95
98
About Us
100
100
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Introduction
Gift cards. Thank-you notes. Coffee mugs. Certificates. Each of these
is a form of employee recognition in organizations today. But what
do organizations get for the collective $46 billion1 that they spend on
recognition and rewards each year? Most of them do not know.
Two factors make recognition programs hard to quantify. First,
recognition historically was a grassroots effort, with individual
departments or business units making decisions about when, why and
how to recognize employees. When you multiply all of these little
initiatives across a large organization, the investment in recognition
becomes much more substantial; yet, due to its highly dispersed nature, it
remains difficult to measure. Second, this highly fragmented recognition
approach resulted in the perception that recognition is a nice-tohave local initiative. Even in those organizations which centralize
tenure or other annual recognition programs, many still believe that
these programs make little impact and, as such, take few efforts to
measure them.
In many organizations, this perception that recognition makes
little impact is right. One reason for this is that the most common
recognition program, an award for service or tenure anniversaries
(programs that exist in about 87 percent of organizations), is frequently
viewed by employees as an entitlement, not recognition. In fact, our
research shows that tenure awards have little or no impact on the
outcomes which organizations care about most, such as employee
engagement, productivity and turnover.2 Further, many recognition
programs are designed to recognize employees for demonstrating
company values; yet what gets recognized most often is achieving
company goals.3 This disconnect means that the organization sends an
inconsistent message to employees about what they should do to receive
recognition. The end result of this is that recognition does not appear to
make much of an impact in many organizations.
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It does not have to be this way. We have found that recognition can
make a difference to employee outcomes. Specifically, our research
uncovered that, in those organizations in which employees are
recognized, the companys average score for employee results (an
index of employee engagement, employee productivity and customer
satisfaction) was approximately 14 percent higher than in organizations
in which recognition does not occur.4 Other research shows that a 15
percent improvement in employee engagement can result in a two
percent uptick in operating margins.5
This study is about creating a recognition strategy and supporting
programs that drive those better results.
Our research reveals that progressive organizations look at recognition
differently. Most importantly, they have a strategy for recognition that
ensures alignment with business goals, organizational culture and other
talent management processes. These organizations design their programs
to consistently reinforce key behaviors and outcomes necessary to drive
business success. Further, they measure the impact of those programs.
The Bersin & Associates Employee Recognition Framework is a
roadmap to creating a comprehensive recognition initiative and the
individual programs that support that initiative, with the goal of helping
organizations to capture as many of the potential benefits of recognition
as possible. The Framework is neither a list of best practices nor a
process-based overview of recognition. Instead, it is an at-a-glance image
of all the decision points that need to be considered when designing a
recognition initiative and its supporting programs. It covers recognition
strategy, audiences, design elements, launch, ongoing management
and measurement. In short, it is your guide to designing a high-impact
recognition approach.
In creating this research, we relied on hundreds of years of our collective
experience and that of our customers with talent management
challenges and solutions. We focused on questions such as the following.
Performance Coaching, Bersin & Associates / Stacia Sherman Garr, November 2011.
Available to research members at www.bersin.com/library or for purchase at
www.bersin.com/hipm.
5 Source: http://www.forbes.com/2009/11/19/incentives-recognition-engagementleadership-ceonetwork-employees_print.html.
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What are the strategic decisions that must be made prior to designing
or launching a recognition program?
How do all of the elements of recognition fit together?
What are all of the critical activities of recognition? How can they be
done in a way that has a positive impact on employee performance
and business outcomes?
What is the most effective way to organize HR to support managers
in their recognition management activities?
How should recognition integrate with other talent management
functions? What resources are necessary to support that integration?
What are the benefits to the organization from doing
recognition well?
As always, we welcome you to continue the dialogue with us. If you have
comments or see areas that you would like to further explore for your
organization, please contact us at info@bersin.com or at 510-251-4400.
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Recognition Defined
KEY POINT
We define recognition
as the expressed
appreciation by one
person to another for
that persons behaviors,
activities or impact.
Recognition may or may
not be accompanied by
a physical or financial
reward.
Total rewards can include items, such as regular and incentive compensation plans,
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Total Rewards
Praise and
Emblematic Rewards7
Recognition
Token Rewards8
Monetary Rewards9
Benefits
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13
http://trustmattersgroup.com/spiritoftrust/?p=441.
14 Source: Global Talent Risk Seven Responses, World Economic Forum, 2011.
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KEY POINT
Intrinsic motivation
occurs when people are
internally motivated to
do something because
it either brings them
pleasure, they think
it is important or they
feel that what they are
learning is significant.
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Intrinsic
Motivation
Extrinsic
Motivation
Motivation tapped
through actions and activities
relating to things individuals
already take pleasure in
Motivation tapped
through rewards, grades,
money or threats
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16
influences, The Journal of Educational Research / A. Wigfield, J.T. Guthrie, S. Tonks and
K.C. Perencevich, 2004.
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KEY POINT
Extrinsic motivation
comes from outside the
individual and employee
motivation needs to be
tapped differently.
13
17 Source: http://en.wikipedia.org/wiki/Motivation#Intrinsic_and_extrinsic_motivation.
18
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KEY POINT
The data suggests that
an effective recognition
strategy does not require
large investments of
budget dollars, though
it does require an
14
21
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Self-Actualization
(Challenge,
opportunity,
learning, creativity)
Career,
Development
Opportunities
Esteem
(Importance,
recognition, respect)
Modern
Recognition
Love / Belonging
Safety
Compensation
and Benefits
Survival
KEY POINT
According to Maslow,
the highest need is called
self-actualization, which
is a process of developing
to reach ones individual
potential.
23
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25
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Recognition Strategy
Design
Visibility
Budget
Frequency
Criteria
Recognizers
Recognition Activity
Direction
Delivery
Customization
Approval
Measurement
Rewards
Audience
Executives | Managers | Professionals | Hourly | Organized Labor | Contingent | Critical Talent Segments
Business Outcomes | Performance | Behaviors | Employee Satisfaction |
Engagement | Retention | Activity andw Participation Level
Purpose of Recognition | Business Goals | Alignment with Culture | Talent Management Integration | Vision | Transparency | Accountability | Globalization
Multi-level Structure
Launch
Key Messages Branding Plan | Employee Training | Marketing | Communications
Source: Bersin & Associates, 2012.
Copyright 2012 Bersin & Associates. All rights reserved.
Page 1
This report will walk you through each of the elements of the Employee
Recognition Framework, using the following broad sections:
Part 1: Recognition Strategy and Audience;
Part 2: Program Design; and,
Part 3: Launch, Management and Measurement.
For each Employee Recognition Framework, section, we include
the following:
An overview of the individual Framework elements;
Definitions of fundamental recognition concepts within the
Framework; and,
Examples of how organizations have applied these elements.
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Recognition Strategy
Design
Visibility
Budget
Frequency
Criteria
Recognizers
Recognition Activity
Direction
Delivery
Customization
Approval
Measurement
Rewards
Audience
Executives | Managers | Professionals | Hourly | Organized Labor | Contingent | Critical Talent Segments
Business Outcomes | Performance | Behaviors | Employee Satisfaction |
Engagement | Retention | Activity andw Participation Level
Purpose of Recognition | Business Goals | Alignment with Culture | Talent Management Integration | Vision | Transparency | Accountability | Globalization
Multi-level Structure
Launch
Key Messages Branding Plan | Employee Training | Marketing | Communications
Source: Bersin & Associates, 2012.
Copyright 2012 Bersin & Associates. All rights reserved.
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Recognition Strategy
Overview
Almost all business functions and the divisions supporting them
have a strategy to help drive the business forward. That strategy is
typically supported by programs with clear objectives and a process for
measuring outcomes.
However, our research shows that this fails to hold true for recognition.
In fact, a recent study shows that 87 percent of respondents said their
organization makes no effort to track the return on investment (ROI) of
their recognition program.26
KEY POINT
Progressive organizations
are centralizing their
recognition initiatives and
creating a comprehensive
strategy to move their
business forward.
26 Source: http://www.shrm.org/Publications/HRNews/Pages/GloboforcePoll.aspx.
27
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Fundamental Elements
Purpose of Recognition
KEY POINT
Recognition programs are
intended to incent the
workforce in a completely
different way.
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KEY POINT
As organizations think
through this piece of the
strategy, it is critical to
define what business goals
will be targeted and how
recognition can encourage
employees to engage in
the activities that will
accelerate the achievement
of those goals.
22
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KEY POINT
Our research has
found that today many
organizations do not
tie their recognition
programs to business
goals.
23
for the benefits programs. This ultimately improved the bottom line.
Another example was when a hospital organization motivated its
employees to increase their level of teamwork, more patients received
better care and they received it faster. As a result, patient satisfaction
scores increased. This gave the hospital more referrals and that translated
to increased revenue.
Our research has found that today only about 60 percent of
organizations tie their recognition programs to business goals.28 The
following is an example of a large technology company that is missing
the mark with it recognition program.
28
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Before moving on from this section of the Framework, ask yourself and
your colleagues the following questions.
What are our organizations top three business goals?
Which behaviors do we need people to engage in to help us reach
those goals?
How can we ensure that the recognition program is encouraging
employees to engage in those behaviors?
Alignment with Culture
Bersin & Associates defines culture as the collective set of
organizational values, conventions, processes and practices that influence
and encourage both individuals and the collective organization to
continuously increase knowledge, competence and performance.
This includes the attitudes, experiences, knowledge and beliefs
within the enterprise. This collective structure influences the way
employees relate to each other and also controls how they behave with
external stakeholders.
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29 Source: http://www.corpmagazine.com/management/human-resources/itemid/5872/
transform-your-culture-with-strategic-employee-rec.
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Case in Point: How Grace Haven Transforms Its Culture with Recognition (contd)
KEY POINT
Careful consideration
should be given to how
recognition impacts all of
talent management and
who will be responsible
for overseeing the
integration of recognition
as a component within it.
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Figure 6: Strategic Integration Considerations between Recognition and Other Talent Management
Activities
Talent Management Domain
Leadership Development
Performance Management
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Figure 6: Strategic Integration Considerations between Recognition and Other Talent Management
Activities (contd)
Talent Management Domain
Career Management
Recruiting / Onboarding
Vision
KEY POINT
It is essential to gather
feedback from managers
and employees to
understand what they
value most.
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KEY POINT
The value of building a
comprehensive roadmap
is that it requires an
organization to conduct
a gap analysis to clearly
29
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Transparency
KEY POINT
One of the most
important elements
to think about prior
to creating a program
is establishing a level
of trust between an
organization and its
employees this is
done through program
transparency.
potential, ability and aspiration for successive leadership positions within the company.
Often, these employees are provided with focused development as part of a succession
plan and are referred to as HiPos.
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KEY POINT
32
Employees need to
know that the various
recognition programs
offered across different
employee populations
and business units are fair
and equitable.
31
Points are a reward mechanism for employees who meet certain recognition
criteria. Points can be redeemed for a wide range of brand-name merchandise, travel, gift
cards and experiences using an extensive online catalogue.
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Case in Point: Calgary Marriott Downtown Evolves Its Recognition Program (contd)
Program Accountability
KEY POINT
An essential part of the
recognition strategy is
figuring out who will own
what and then holding
those people accountable.
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Figure 8: Questions Your Organization Must Answer before It Makes Other Decisions in This Framework
How should recognition integrate with other talent management programs, including compensation,
performance management, learning, engagement, onboarding and more?
In an ideal world, what would recognition look like within our organization?
How does this compare to our current state of recognition?
What will be the recognition responsibilities of our organizations stakeholders (e.g., senior leaders, managers,
employees and HR)? How will each of those stakeholders be held responsible for fulfilling their responsibilities?
After you are able to answer this series of questions, it is time to think
about how recognition should affect different audiences across your
organization. This next section of the Framework will discuss those key
elements in detail.
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Audience
(Figure 5 is repeated in this section.)
Figure 5: Bersin & Associates Employee Recognition Framework Recognition Strategy and Audience
Recognition Strategy
Design
Visibility
Budget
Frequency
Criteria
Recognizers
Recognition Activity
Direction
Delivery
Customization
Approval
Measurement
Rewards
Audience
Executives | Managers | Professionals | Hourly | Organized Labor | Contingent | Critical Talent Segments
Business Outcomes | Performance | Behaviors | Employee Satisfaction |
Engagement | Retention | Activity andw Participation Level
Purpose of Recognition | Business Goals | Alignment with Culture | Talent Management Integration | Vision | Transparency | Accountability | Globalization
Multi-level Structure
Launch
Key Messages Branding Plan | Employee Training | Marketing | Communications
Source: Bersin & Associates, 2012.
Copyright 2012 Bersin & Associates. All rights reserved.
Page 1
Overview
Employee recognition has the potential to touch nearly every employee
within the organization; however, just because every employee can be
recognized does not mean it will happen for everyone. The reason for
this is three-fold. First, many employees do not know what they have
to do to be recognized either they do not understand or were never
told. Second, some employees just do not meet the requirements to
be recognized. Third, employees who should be recognized are not
because an employees manager does not want to spend the time or
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KEY POINT
Employee recognition has
the potential to touch
nearly every employee
within the organization;
however, just because
every employee can be
recognized does not
mean it will happen for
everyone.
37
Fundamental Elements
The workforce is comprised of subsets of employees who vary greatly
in terms of their needs, expectations, preferences and stakes in the
company. We have identified seven subsets of employees (see Figure 9)
that should be thought of independently for the purpose of recognition.
It is important to note that these subsets may vary by region, industry or
even company. These definitions can also vary by hours worked, provision
of tools, job autonomy, benefits and compensation. Figure 9 lists the
subsets that we have identified in our research and provides definitions
for each of them.
Definition
Executives / Leadership
Senior leaders within the organization, including chief-level positions and those reporting
directly into those positions. Also includes senior managerial positions.
Managers
Professionals / Salary /
Exempt
Hourly / Nonexempt
An employee whose level of work entitles him / her under the Fair Labor Standards Act
or other regional laws to overtime pay by an organization. The hours worked by these
employees are tracked on an hourly rate and fall within full- or part-time regional status.
Contingent / Contract
Individuals who are likely within one of the above audiences, but who have been placed
in a subgroup, as well, for the purposes of providing additional attention or focus. This
group can include specific functions, regions, job levels or status (e.g., HiPos).
Source: Bersin & Associates, 2012.
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Executives /
Leadership
Managers
Create, exemplify, guide and reinforce the attributes that meet the criteria for recognition.
Communicate examples of what is deemed worthy of recognition to all company employees.
Distribute rewards, as appropriate.
Use recognition metrics to further assess the engagement, performance and retention of
talent across the organization.
Professionals /
Salary / Exempt
Hourly / Nonexempt
Organized Labor /
Union
Contingent /
Contract
Critical Talent
Segments
Participate in recognition programs that support the company, their teams and which also
help employees to grow as individuals.
Communicate upward to managers when they do not understand what they need to do
to be recognized.
Share feedback about when they do / do not feel acknowledged.
Participate in recognition programs that support the company, their teams and which also
help them to grow as individuals.
Communicate to managers when they do not understand what they need to do to
be recognized.
Share feedback about when they do / do not feel acknowledged.
Embrace behaviors and performance aligned with the companys culture. Whether or not these
workers participate in formal and informal recognition programs is often dependent on the
industry, length of project, and other requirements specific to the organization and contract.
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Once you have considered the recognition roles and responsibilities for
key audiences within your organization, it is important to think about
what programs you should create to meet the needs of those audiences.
This next section of the report, Part 2: Program Design, will discuss the
key elements to consider in designing a recognition program.
Recognition Strategy
Design
Visibility
Budget
Frequency
Criteria
Recognizers
Recognition Activity
Direction
Delivery
Customization
Approval
Measurement
Rewards
Audience
Executives | Managers | Professionals | Hourly | Organized Labor | Contingent | Critical Talent Segments
Business Outcomes | Performance | Behaviors | Employee Satisfaction |
Engagement | Retention | Activity andw Participation Level
Purpose of Recognition | Business Goals | Alignment with Culture | Talent Management Integration | Vision | Transparency | Accountability | Globalization
Multi-level Structure
Launch
Key Messages Branding Plan | Employee Training | Marketing | Communications
Source: Bersin & Associates, 2012.
Copyright 2012 Bersin & Associates. All rights reserved.
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Fundamental Elements
Budget
The first fundamental program design element is budget. A welldesigned and documented budget ensures all stakeholders are on the
same page in terms of how the program money will be spent. There are
three fundamental considerations pertaining to the budget amount,
allocation and control. This section will discuss each of them in detail.
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KEY POINT
There are three
fundamental
considerations pertaining
to the budget amount,
allocation and control.
41
Amount First, leaders should determine the amount that will be spent
on a recognition program and from where it will come. The recognition
budget generally comes from centralized HR funding (e.g., compensation
or other program), business units or functions, or a combination of
sources. According to 2011 data, recognition budgets typically average
2.0 percent of the payroll budget, though the median amount budgeted
is one percent.32 Intuit, for example, established a budget of one percent
of payroll for its awards program.33 Departments can budget more or
give higher-level awards by reducing spending in other budget areas. The
average 2011 recognition budget is down slightly in 2011 compared with
2008 (2.0 percent of payroll spend versus 2.7 percent, respectively).34 We
think the decline partially reflects the recent challenges and volatility in
the economy.
Allocations The second element that organizations need to think
about is budget allocation. As shown in Figure 12, there are three major
areas requiring consensus. First, organizations need to consider how
much of the budget will be used to pay for staff (internal or external)
to administer the program. Second, organizations need to think
about what portion of the central budget will be distributed to each
department (e.g., for discretionary rewards or other programs). As part
of this process, conversely, stakeholders should determine if individual
departments need to contribute any funding. Lastly, organizations
should decide how they will allocate the funding toward centralized
program initiatives (e.g., rewards allocations for tenure programs or
technology allocations).
32 Source: http://www.worldatwork.org/waw/adimLink?id=51194.
33 Source: http://talentmgt.com/articles/view/intuit_spotlights_strategic_importance_of_
global_employee_recognition/3.
34 Source: http://www.worldatwork.org/waw/adimLink?id=51194.
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Decentralized
Program Funding
Centralized Program
Funding
Staff / Administration
Total Budget
KEY POINT
As part of this process,
it is essential to design
budget approval
processes, and clarify
what needs sign-off and
what does not.
Control The final budget decision is control. There are two major
components to control control over individual recognition rewards
and control for all other program spending. As we mentioned earlier,
some organizations decentralize the control of certain rewards, such as
Top 100 in revenue or customer service, to business units or functions.
In these instances, organizations need to determine who has input into
how dollars are spent, as well as who has the final say on spending.
For example, when will a committee take a vote and when will budget
dollars be up to a managers discretion? As part of this process, it is
essential to design budget approval processes, and clarify what needs
sign-off and what does not (This will be discussed in more detail in the
approvals section of the program design part of the Framework).
The final element of control is determining how the budget will be
monitored for spending not related specifically to individual recognition
rewards. This could be spending on recognition events, time spent by
employees reviewing recognition nominations or any other similar
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Performance
Behaviors
Tenure
Tied to anniversaries or
length of service
1 2012.
Source: Bersin & Associates,
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Individual
Enterprise
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Some of the programs just mentioned only touch the top performers.
Sometimes adding runners-up or Top 100 category helps to
recognize more people. That said, these people are still usually at
the top of their region or division, so these additional categories
may not sufficiently diversify the types of recognition. Another
way organizations try to include more people is by incorporating
programs that have the potential to indirectly lead to improved
performance. One example is a perfect attendance program.
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Recognizers
KEY POINT
Recognizers are defined
as the people within an
organization or outside of
it who give recognition to
an employee or group of
employees.
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Internal Employee
Recognizers
External Audiences
Recognizers
Senior Leaders
Customers
Managers
Partners
Teams
Third-Party Award
Constituents
Individuals
Certifications
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Direction
Another fundamental program design element is the direction in which
recognition flows. As shown in Figure 16, there are three general
directions in which recognition occurs top-down (e.g., manager
to employee), peer to peer (employee to employee) and bottom-up
(employee to manager). The impact of recognition can be maximized
when recognition flows in all of these directions throughout the
organization. An increasing number of programs are designed, so that
employees across the organization have the potential to be a recognizer,
as well as the recognizee the one receiving the recognition.
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Definition
Peer to
Peer
Bottom
up
Top
down
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KEY POINT
Lilly Canada wanted to
move to a solution that
would recognize and
reward sideways, up and
down as well as peer to
peer, and also supervisor
to subordinate and
subordinate to supervisor.
The HR team took the budget that it had for all of the other
rewards programs and reallocated that dollar amount into a point
value for use with the new system. This meant that Lilly Canadas
awards nomination process, along with all the dinners and gift
cards, were replaced with a performance-based points system.
Based on the number of people managed by each supervisor,
points budgets for supervisors were developed. The solution was
implemented to mimic the same performance leadership behaviors
that show up in Lillys performance management system and
code of conduct, in which performance management, leadership
assessment and rewards are tightly integrated together.
Training and transparent exposure were key to a successful
implementation. The transparency of the rewards program
online made it easy to see who was and was not being rewarded,
as well as for what supervisors were giving out points. The
transparency of the system also helped managers learn best
practices from each other. The HR team used both training and
learn-as-wego processes to bring the new rewards program to
managers, knowing that some managers would be concerned
with over-recognition.
36
Engagement with a Dynamic Rewards Program, Bersin & Associates / Katherine Jones, July
2011. Available to research members at www.bersin.com.
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Approval
In the context of this Employee Recognition Framework, approval is
defined as the level of complexity and approvers needed for recognition
to take place. As shown in Figure 17, there are three levels of approvals
to consider, including rigorous, informal and none.
Approval
Process
Approvers
Informal
Recognition approval
requires input from a variety
of constituents to ensure
the right behaviors are
recognized and the reward
is appropriate.
Rewards programs tend
to have a high monetary
component or a great deal
of symbolism attached
to them.
None
Recognition approval
requires at least one other
person in addition to the
person who initially wants
to recognize the employee.
Rewards tend to be
symbolic or token.
Recognition approval
requires no input in addition
to that of the person
who desires to recognize
another.
Rewards tend to be praise
or token awards.
No level of signoff
required.
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Definition
Open to all employees and / or other
audiences, such as customers, media
or partners
Considerations
Public
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Definition
Given in a more intimate
environment, such as in front of
a team or department
Considerations
Group
One-on-one recognition
Private
KEY POINT
When thinking about
visibility, organizations
need to consider the
right balance between
what the employee
prefers and the program
requirements.
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Frequency
In the context of recognition, frequency refers to the rate at which
the recognition occurs or is repeated over a particular period of time.
Recognition can be given annually, quarterly, monthly, weekly, daily or a
combination of these timeframes.
The primary factor determining recognition program frequency is the
program purpose and criteria, which we have already discussed at
length. Many programs are event-driven and frequency is determined
based on key dates. For example, highest annual revenue or MVP criteria
requirements can take a year to complete. As a result the event would
occur once a year; however, reminders about the performance levels
necessary to attend the event could be sent out on a quarterly basis.
Conversely, some performance and behaviors occur spontaneously. In
these instances, recognition frequency could be daily or whenever the
behavior occurs.
It is important to take into account employee needs when determining
frequency. At the beginning of this report, we discussed the importance
of employee motivations. When determining appropriate frequency,
consider how recognition will motivate employees. For example,
managers and peers comprise an employees close network at work
regular recognition from this group will enhance the employees sense
of belonging, in addition to communicating the value of the employees
specific activities. On the other end of the spectrum, senior leaders
tend to be representative of the entire organization and recognition
from them will likely have a greater impact on an employees sense of
esteem and accomplishment. Since this type of recognition contributes
differently to the employees motivation, less frequent recognition may
be appropriate. There is no universal right answer when determining
recognition frequency, as this is something that will vary based on the
goals of the program, the organizations culture and the people involved.
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KEY POINT
Generally speaking,
more genuine, targeted,
thoughtful recognition
is better than less, as
it reinforces the right
behaviors immediately.
57
Delivery
Delivery refers to the methods used, so that recognition can touch an
individual or group of individuals. There are four main ways in which
recognition is delivered, including face to face, letter / email, event and
online platforms, as shown in Figure 19. Organizations should consider
each one, and how it relates to the organizations and employees needs.
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Face to Face
Letter / Email
Events
Online Platforms
Once your organization has had a dialogue about the delivery platforms,
it is time to move to the next section of the Framework in which
customization will be discussed in detail.
Customization
We define customization as the way an organization may alter its
recognition program to meet the needs of employee types, business units
and geographies. Figure 20 shows some of the different populations
requiring customization.
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Considerations
Employee Type
Business Unit /
Function
IT versus Finance
Geography
Key Questions
Measurement
As we have alluded to throughout this report, measurement is an
important aspect of developing a comprehensive recognition strategy.
Specifically, you should consider how to design your organizations
measurement approach, methodology and reporting (as shown in Figure
21). Once you have thought through these elements, create an action
plan to move your organization forward.
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Approach
Methodology
Measurement
Action Plan
Reporting
Approach
A measurement approach details how the organization will measure the
program and identifies who will be responsible for this task. For example,
large and global organizations may engage a group of local champions
on the project team who can more easily gather and assess information
in different countries and regions. When approaching measurement,
organizations should also consider defining what results they will
measure immediately and what will be measured over the long term. For
instance, if your organization has not valued recognition in the past,
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it could take from several months to years for some cultural changes to
appear. Other changes may be noticeable almost immediately.
Methodology
We view methodology as the underlying rules and protocols for
measuring recognition. For example, what will you measure to show
the impact of recognition? Will you use employee engagement scores,
performance reviews, sales results, retention data or something else?
After you know what you would like to use across multiple departments
and geographies, it is important to think about how you will get this
data. It is critical to partner with the owners of this data, so that you can
get what you need quickly.
Reporting
Determine early on what types of information you will share, with whom
the reports will be shared and how frequently reports will be distributed.
Many companies create dashboards for the leadership team that
show everything from rewards redeemed and time spent on an online
recognition website, to the list of behaviors changed and the business
goals achieved. Sometimes report creation and distribution require levels
of customization. For example, will you share different reports with
leaders in the U.S., as compared with those in Australia?
Measurement Action Plan
The answers to the questions introduced in the previous section will
enable you to create a measurement action plan. We have summarized
these questions as follows.
What resources do we need to measure our programs? Who do we
need to engage and how should we engage them?
What methodologies will be used to show the impact of recognition?
What tools will we use to measure key performances, behaviors
and actions?
From what regions and departments will we collect data?
When will data be compiled by the recognition team and when will it
need to come from someone else?
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Rewards
Overview
KEY POINT
Our research found
that 57 percent of
organizations with a
recognition and reward
program had strong
financial performance.
37
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Reward Types
Organizations use several types of rewards to motivate employees.
As shown in Figure 22, these can be divided into three categories
emblematic, token and monetary. We define emblematic rewards as
recognition that represents an acknowledgement of contribution, but
typically cannot be converted to something with monetary value. We
include certificates, plaques and trophies in this category. Although they
cost some money to produce, they are not seen by the recognizee as
having monetary value. Token rewards include items that cost money
but are viewed by recognizee as rewards of token value, usually less
than $100. The monetary category includes rewardsthat are not of token
value. This category generally includes rewards that cost more than $100.
Token
Gift cards
Candy / flowers
Lunches / dinners
Merchandise
Points that convert to other
token items
*Note: The items listed in this figure are suggestive of the types of rewards
within each category, but are not exhaustive of all types of rewards.
Monetary
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KEY POINT
Progressive organizations
are flexible in that they
allow staff members
to give different
rewards to different
people. This allows
for a greater degree
of thoughtfulness and
reward customization.
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into a given task than if they were not offered any sort of financial
compensation. On the other hand, if they are given a friendly gift, such
as a candy bar, they will tend to exert more effort. Interestingly enough,
once a monetary value is attached to a gift, the transaction is likely to be
seen as though it exists in a monetary market, and effort tends to be less
than if the dollar value had not been made apparent.40
Three additional items should be considered as part of program design
employee support, vendor strategy and talent management integration.
We discuss each of these in detail in the following sections.
Employee Support
Employee support should not be forgotten when designing your
recognition program. One of the first things to do is to establish a
go-to person or group of people the employee can contact with
questions about the recognition program. This person may be within
the business unit, HR, or perhaps with the vendor who helps administer
the person. The employee support persons responsibilities should be to
answer questions about the overall program, the rewards program and
its requirements.
Vendor Strategy
Vendors play an important role in the design and implementation of a
recognition program. They can generally be divided into the following
(not mutually exclusive) categories (see Figure 23):
1. Survey vendors;
2. Tangible rewards vendors;
3. Consultants; and,
4. Technology vendors.
40
Source: Effort for Payment: A Tale of Two Markets, Psychological Science / James
Heyman and Dan Ariely, University of California, Berkeley and Massachusetts Institute of
Technology, March 2004.
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Surveys
Technology
Recognition
Vendor
Options
Tangible
Rewards
Consultants
KEY POINT
Organizations need to
evaluate vendor costs
across the organization
to identify talent
management process
improvements and other
operational synergies.
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KEY POINT
A well-designed
recognition program
will integrate with and
add value to other talent
management programs
such as compensation,
benefits, performance
management,
engagement, learning
and even recruiting.
What are the parameters for flexible work schedules as part of the
recognition program?
Another important component to consider is performance management.
For example, To what extent should recognition feedback be captured
in the performance management system and who will be responsible for
ensuring this takes place?
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Recognition Strategy
Design
Visibility
Budget
Frequency
Criteria
Recognizers
Recognition Activity
Direction
Delivery
Customization
Approval
Measurement
Rewards
Audience
Executives | Managers | Professionals | Hourly | Organized Labor | Contingent | Critical Talent Segments
Business Outcomes | Performance | Behaviors | Employee Satisfaction |
Engagement | Retention | Activity andw Participation Level
Purpose of Recognition | Business Goals | Alignment with Culture | Talent Management Integration | Vision | Transparency | Accountability | Globalization
Multi-level Structure
Launch
Key Messages Branding Plan | Employee Training | Marketing | Communications
Source: Bersin & Associates, 2012.
Overview
Page 1
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1. Launch;
2. Management and governance; and,
3. Metrics and evaluation.
Launch
Launch is the time when the stakeholders need to create and execute
a plan that communicates the recognition programs purpose and its
benefits to employees. The four key elements include a branding plan,
employee training, marketing and communications. This next section will
discuss each of these elements in detail.
Branding Plan
A branding plan helps to convey to employees the details of the
recognition program. As part of the program strategy and design section
of the Framework, organizations should have collected feedback from
employees to understand how they perceive recognition and what
they would like from the program. In addition, key program criteria
should have been defined. This information should be included in the
branding plan. Other factors that will inform the branding plan are the
organizations overall brand, the variations on that theme for existing
complementary programs and appropriate message segmentation
for different employee populations. For example, what will you say
for programs targeting HiPos, midlevel managers in China or another
population? What messages will be the same and what will be different?
The overall recognition program and individual rewards program
messages should be simple, meaningful and consistent. For example, the
Calgary Marriott uses the name S.P.I.R.I.T. and it includes the things the
organization values special recognition, participation in the community,
introducing new business, recruitment, innovation and team recognition.
The performance and behaviors valued are clearly articulated in the
programs name.
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Employee Training
KEY POINT
Training is one of the
most important elements
of the launch section.
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KEY POINT
Managers should be
equipped with the
knowledge about how
to recognize employees
in a thoughtful and
meaningful way.
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41 Source: http://kern.org/.
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Kern County also shows the complete details of its program on this
external website, as shown in Figure 26. A summary of the recognition
program is shown at the top of the page. (In addition, Kern County posts
a brochure about recognition on its website (see section, Appendix I:
Additional Figures for more details.)
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Figure 26: Kern County Superintendent Schools Recognition External Website Page
Summary
Program
Components
Communication
With the branding plan, training programs and marketing materials
created, it is time to communicate the recognition program(s) to
employees. At this juncture, it is important to determine who within
the organization will communicate the initial launch of the program.
You should also establish who will continually communicate about the
program, so as to maintain the greatest levels of engagement. Within
both of these communications, it is important to communicate to
employees what they get out of the recognition program why they
should recognize peers and what they will gain from supporting each
other and the organization as a whole.
Executive sponsorship of the program is perhaps most strongly
demonstrated by the companys CEO. For example, KPMG in Canada had
its CEO launch the initial recognition program; he continues to support
the program by talking about it frequently when he has conference calls
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42 Source: http://talentmgt.com/articles/view/intuit_spotlights_strategic_importance_
of_global_employee_recognition/3.
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KEY POINT
The likelihood of
inequity increases when
a subset of people in
the organization use
the program and others
do not.
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KEY POINT
Generally speaking,
the exact business
outcomes vary from one
organization to another,
but all should be items
that are measurable
and drive the business
forward.
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KEY POINT
Measuring performance
is critical to the success of
the overall recognition
effort.
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key criteria and business outcomes. For example, consider the following
questions, Did the rewards program in Division A contribute to a rise
in revenue by X percent compared with the previous year?, and Based
on our criteria, what performance improved the most? With answers to
these types of questions, organizations can best determine how well its
recognition efforts are performing and which changes to the programs
are warranted. Furthermore, organizations can more accurately adjust
performance metrics and benchmarks as necessary.
It is also important to once again point out that recognition is a
supplement to traditional performance management (e.g., reviews,
360s and promotions). With that, as part of the evaluation process,
organizations need to identify what elements of the recognition
program should be measured and documented as part of the
performance management process.
Behaviors
Measuring the valued behaviors is critical to the programs success.
Similar to what was discussed in performance, organizations should
review their criteria, and determine if the behaviors recognized
actually contributed to the individual performance of employees and
business outcomes. Furthermore, organizations need to determine if
the behaviors highlighted as most valuable supported their objectives
pertaining to culture. Questions to consider include the following.
Did we recognize the right behaviors?
Were employees aware of what the organization values the most?
After reviewing the metrics and assessing what contributed to them,
organizations are best prepared to make any necessary changes to their
programs and adjust metrics as necessary.
Employee Satisfaction
As part of the strategy and program sections in this report, organizations
were asked to consider getting feedback from employees about rewards,
including how they would like to be recognized, what training they
needed, and more. Based on these findings and the resulting design
decisions, it is critical to go back and get a pulse on how employees
view your programs. To do this, many organizations once again conduct
surveys or use other methods (e.g. informal on-one-ones or focus groups)
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45
For more information, The Employee Engagement Primer, Bersin & Associates / Brenda
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85
Employee Engagement
Employee Retention
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Your 87
Company
Logo
Goes Here
Turnover Rate
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KEY POINT
This Employee
Recognition Framework
is designed to help your
organization consider all
of the elements necessary
to build a recognition
program from scratch
or redesign how your
programs currently
operate.
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KEY POINT
You need to consider
what the ideal mix
of rewards is for your
organization, based on
its business goals, the
behaviors you want to
recognize and employees
needs.
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KEY POINT
The Employee
Recognition Framework
is intended to help your
organization better
engage employees
and drive business
performance over the
short and long term.
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Final Thoughts
Recognition and rewards programs are not really new to the business.
However, the way in which these programs are incorporated into the
business is changing.
Progressive organizations have developed a holistic and equitable
recognition strategy designed to drive improved employee engagement
and targeted employee behaviors. Over the next few years, we think
organizations will increasingly embrace recognition as an important
approach to driving change and improved performance. As such,
recognition has the potential to become an increasingly core and
strategic tool of the HR function.
This Framework is intended to help your organization understand how
all of the elements of recognition fit together and the key decision
points necessary for creating a strategic recognition program. The end
goal is for you to understand how to develop a program that effectively
integrates recognition into your organizations business and talent
management strategies and ultimately contributes to improved
business outcomes.
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Appendix I
Additional Images
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Appendix II
Glossary of Terms
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95
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Appendix III
Table of Figures
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98
12
15
18
19, 36
27, 28
30
Figure 8: Questions Your Organization Must Answer before It Makes Other Decisions
in This Framework
35
37
38
Figure 11: Bersin & Associates Employee Recognition Framework Design and Rewards
39
42
43
45
49
51
53
54, 55
58
59
60
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63
66
Figure 24: Bersin & Associates Employee Recognition Framework Governance & Management,
Metrics & Evaluation, and Launch
68
73
Figure 26: Kern County Superintendent Schools Recognition External Website Page
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85
87
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About Us
Bersin & Associates is the only research and advisory consulting firm
focused solely on WhatWorks research in enterprise learning and
talent management. With more than 25 years of experience in enterprise
learning, technology and HR business processes, Bersin & Associates
provides actionable, research-based services to help learning and HR
managers and executives improve operational effectiveness and
business impact.
Bersin & Associates research members gain access to a comprehensive
library of best practices, case studies, benchmarks and in-depth market
analyses designed to help executives and practitioners make fast, effective
decisions. Member benefits include in-depth advisory services, access to
proprietary webcasts and industry user groups, strategic workshops, and
strategic consulting to improve operational effectiveness and business
alignment. More than 3,500 organizations in a wide range of industries
benefit from Bersin & Associates research and services.
Bersin & Associates can be reached at http://www.bersin.com or at
(510) 251-4400.
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