9
Recognition
Introduction
My first experience of recognition was in the early 1990s. I was 21 and in a graduate job at BT, the UK's phone company. I'd been surprised by how much of the engineering team's time was spent writing plans and reports, so I spent my evenings and weekends writing an automated documentation system to make it easier. It took four months to write, and within weeks, 45 people were using it. A month in, my boss's boss, rarely seen, told me he had nominated me for an innovation award. I was flattered—after all, I was just doing what I loved, and didn't even know there was an innovation award. But I remember feeling really great that he had noticed and thanked me.
It was over a year later, when I'd left that department, that I received a generic letter from someone I didn't know, with a gift card enclosed. I'd completely forgotten about the award by then, but the impersonal letter, combined with the realization that they'd taken a year to get it to me, left me with a negative feeling, rather than a positive one.
All in all, I felt worse than if we'd stuck to the point in the story where my boss just said thank you. It was a lesson in how poorly delivered recognition backfires, creating the exact opposite result from the one intended.
The Truth is Recognition Just isn't Working
In the US alone, companies are spending $46 billion per year1 on recognition—about 2% of the total pay bill—but research shows that half of employees don't even know that a recognition program exists. Our research shows that 80% of senior leaders surveyed claim that employees are recognized monthly, but only 17% of employees think their organization's culture strongly supports recognition.
Something is really wrong with what we're doing. What, if anything, are we getting from this enormous $46 billion investment? This chapter focuses on what you can do to get your money's worth out of your recognition efforts by moving the dial to creating recognition programs that truly make a difference for your workforce and your business.
Ditch the Clocks and Watches
Recognition based on tenure, often called long‐service awards, is the oldest trick in the book. Whether we're talking gold watches, engraved pens or electrical goods, it is well past its sell‐by date!
Long tenure isn't a bad outcome. The problem is that spending all of your recognition money on long‐service awards is a terribly ineffective way to make that happen.
Bersin & Associates finds that as much as 87%2 of recognition spend is used for tenure awards. But have you ever worked at a company that had length of service as a company value? The harsh fact of our new world of work is that our most promising employees aren't staying in their jobs for more than a couple of years, so what good is budgeting all that money for tenure awards that most of them will never reach?
We should be investing in employees who live our values and demonstrate the behaviors that build great teams, great products and loyal customers. But we're not. We're spending the money on recognizing employees equally, regardless of performance and regardless of commitment, simply based on their start dates. What we're spending on long‐service awards seems like an indefensible waste of money.
Because they are predictable, long‐service awards often end up becoming an entitlement: “I've worked here 15 years and this is due to me.” While it needs courage to remove entitlements, since you will get a backlash, the best results we've seen are when companies divert money and time from long‐service awards to performance, behavior and value awards. Running a survey can help: Ask your staff if they think you have a real culture of recognition or if you need to do more, and they will almost certainly say you need to change. That can give you the permission and the reasoning to explain to your people why you are making a bold change.
At Reward Gateway, we dropped the money from tenure awards several years ago, diverting it to a continuous recognition program based on our values. We still celebrate tenure, with e‐cards sent on our social wall, allowing colleagues to shout out their favorite memories of someone and having an open dialogue about their contributions. A message, handwritten note or phone call from someone on the leadership team makes the big anniversaries special.
It's Never, Ever, Ever All about the Money
If the biggest mistake we make in recognition is tenure awards, the second‐biggest mistake is to think it's all about the money. Here I want to be really clear: It is never, ever, ever all about the money.
I've seen organizations spend literally years in discussions about how much budget will be assigned to recognition awards and what the process will be for signoff and approval to make sure that money goes to the right people. It's a complete waste of time. R&R, the term HR people normally use, stands for Reward & Recognition. But if we got the emphasis right, we should really be talking about Recognition & Reward.
A cash award, prize or gift is a nice‐to‐have for a recognition program; it can add a bit of fun and, in some cases, it can be motivational. But in almost every scenario I have come across, the thing that the employee values more than anything else is the message. The message is the part that so many organizations get wrong, and very few organizations provide any training or guidance about how to give the right message or how to recognize freely without fear.
“I have all of my important papers going back decades in a box at home. Amongst them are two handwritten thank‐you notes. One is from Nick Driscombe, my ex‐chairman, thanking me for a particularly good year's work. The other is from my old boss Marc Benioff at Salesforce. I'll keep those thank‐you notes for ever.”
—Sion Lewis, CEO Accounting at IRIS Software
The message is key. So many recognition programs spend 90% of the effort on the mechanics of the nomination or the transaction and misfire on explaining what the award is actually for, or they radically restrict the number of thank yous that can be sent to hit a budget number. Many make the process of saying thank you so arduous that few ever get round to doing it.
You can make a message more meaningful with a thoughtful gift, but remember that thing our parents told us when we were kids: It's the thought that counts, not the value. If you want to make a thank you more special, choose something that shows you see the recipient as a real person—a human being, not just an employee. Choose a gift or experience that shows you actually know, or have taken the time to find out, something about them.
“When you buy an experience for someone, you're thinking about them as a person, adding value and meaning to their life. The thought and meaning is worth so much more than the price you pay.”
—Jack Huang, Founder & CEO at TRULY Experiences
Recognition and Visibility Go Together
It's normal to think of recognition as the corporate thank‐you award program, but a key part of recognition is visibility. “Am I visible?” “Can my work be seen?” “Do other people see what I do around here?” are all key questions people ask themselves. When staff or departments complain that they are overlooked or not being recognized, it is most often the small things—the daily and hourly opportunities to acknowledge someone's work—that are being missed.
Reviewing your basic management and communication processes can be a key step in creating a high‐achieving, recognition‐based culture. In fact, it's important to see recognition and cross‐departmental communication together. A key disengager is the feeling that the wrong people are being recognized; it creates a feeling of unfairness (see “The monkey and the cucumber” in the Pay & Benefits chapter). What's important is that recognition goes hand in hand with deliberate efforts to improve the understanding of what different departments do and how their work contributes to the mission.
“I've often thought I spend half my week getting people to be nicer to each other. It's not that I work with bad people; I work with wonderful people. It's just that in my experience, we are very good at seeing our own worlds as challenging and complex, but on the other hand, do a very good job of simplifying the world of others.”
—Shelley Packer, COO at Jiminny
We noticed in our business that sales wins were celebrated most; as soon as a deal is closed, the whole company gets an e‐mail and the salesperson is recognized by his or her peers. The same happens in client success, when a client buys additional services or renews a long‐term contract.
But what about the success of the marketing department? And the product and engineering teams? Are they visible, too? When a salesperson wins a new client, who else was involved in crafting the winning bid? Do they highlight the whole team? Does an e‐mail go to all of your managers, reflecting the totality of the talent and effort involved?
A problem in some businesses is that the same 20% of employees get recognized and the rest are starving to be noticed. Since business success is so often about the many small wins, it's important to expose your quiet achievers, your unsung heroes, giving them the recognition they deserve. Sharing those regular day‐to‐day achievements in a company builds social capital. It increases empathy and understanding by helping people to be kinder to each other. People can see and understand more about what others do and how they add value, and that helps inter‐departmental working, collaboration and decision‐making.
In Practice
Key Outcomes Rebels Strive For
Improved Inter‐Departmental Results When sales hit their target, was it all down to the sales team or did great work between sales, service and product really land the deal?
Peer‐to‐peer recognition between people in different teams helps build connections across the company, resulting in improved results and lower risk. The National Transportation Safety Board found that 73% of incidents occurred on the first day a team worked together and 44% on the first flight.4 Teams that stayed together for years performed better than the rest.
Increased Tenure Rebels do strive for increased length of service from staff who are living their values and displaying the right behaviors—but they know that you get long tenure not by rewarding the tenure itself, but by creating an engaging workplace where people feel that they are seen, heard, recognized and valued for who they are and what they do every day. That kind of culture makes employees want to stay with you for the long term.
Key Rebel Behaviors
The classic way to build recognition programs involves budgets, committees, nominations and process. Recognition rebels really do things differently.
- Make recognition timely and continuous
Rebels build cultures of continuous recognition where saying thanks is an everyday occurrence involving peers, managers, the CEO and the whole leadership team. They move away from annual or quarterly events, recognizing that praise is more effective in the moment.
- Build trust
Rebels believe they don't need committees, complex systems and rulebooks to manage recognition programs. With recognition budgets on average less than 2% of the overall salary budget, they prioritize education over process and communication over compliance, and build self‐policing recognition cultures based on trust.
- Link deeply to values
Rebels create multi‐layered recognition programs, including peer‐to‐peer, manager and company‐wide, linking them deeply to values and behaviors, showing staff that your values really count and aren't just words in the handbook.
- Encourage lateral recognition
In many companies, the relationships most in need of investment are the lateral ones between colleagues in different departments. Rebels develop programs that enable lateral recognition, fueling the development of trust, empathy and social capital between teams. This peer‐to‐peer recognition is 35% more likely to have a positive impact on financial results than manager‐only recognition.5
- Make recognition personal
When investing in gifts and incentives, rebels make them personal, using an understanding of someone as an individual to buy a meaningful gift or experience, or using technology to allow staff to share what they're saving for or would like to receive.
Making a Start
Start with Visibility Take some time to think about the different job roles and departments in your organization. How many of your roles have results that are visible enough to be recognized: How could they or should they change? The first problem with most recognition is a lack of visibility. You'll have to address that, finding ways to see everyone, including your unsung heroes.
Communicate and Educate Start an open conversation with your managers and leaders about recognition. Steer the conversation away from money—it's not a priority to create new recognition budgets. The most important thing that most companies can do is get rid of the fear of saying thank you and help managers see the power of prioritizing a little time for recognition every day. Many managers start out with an absolute terror of saying thank you too often, or thanking the wrong person. This must be overcome to create a culture of recognition.
Implement Peer‐to‐Peer and Forget the Money I'm always saying there is no one‐size‐fits‐all, but implementing non‐monetary, peer‐to‐peer awards based on your values is as close as you're ever going to get to a universal quick win. Use technology with a social wall or sharing wall if you can, and there will be an instant uplift in your culture of recognition. The technology cost will be minimal (we know one rebel who implemented it using postcards stuck to a noticeboard).
THE PLAYS
Giving the Boot to Traditional Recognition Awards: Venables Bell & Partners
Situation
At Venables Bell & Partners, a San Francisco‐based marketing agency, employees are not just the face or the heart and soul of the company; they are the “product, the craftsmen of what we do,” says Paul Venables,6 founder and CEO. To ensure the company's “product” (the staff) were motivated to develop the best for its clients, the agency needed to create recognition programs that would truly embrace the creativity of its craftspeople and align with the company's three values of being honest, fearless and independent.
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The result is a variety of recognition programs or awards that are far from traditional, taking creativity to the next level. “We believe that when it comes to our awards, it's better to be quirky, have a bit of fun and not be too corporate,” says Venables.
The first example is their long‐service program, or what they call the “boot award,” which is given at five years of service. Employees receive two things: a life‐sized glass boot and $1,000. The catch, and what makes this different from traditional long‐service awards, is that the money is not for the individual; it's to be used for others in the company. Whether it's picking up the tab at a local bar, taking team members out for a bit of 1:1 coaching or pooling award money to take a group out for a meal, the intent is to use it for others. “It's a way for the veterans to share what they know, carry on the culture and build relationships across the company. It creates cross‐pollination, sharing with the wide‐eyed and hungry youngsters what it takes to succeed,” says Venables.
Another example are awards given out at the annual holiday party. They've been developed to recognize employees for their contributions, doing so again in a fun and quirky way.
- Golden toilet: given to the employee who “takes care of shit gracefully and with class,” says Venables; the awardee receives a full‐size golden toilet.
- Multiplier: given to the employee where everything they touch gets so much better, doubling their salary for a month.
- Ass‐kicker of the year: given to an accomplished kicker‐of‐asses who gets things done; the awardee receives a bonus check.
- Spouse/partner/significant other: since the agency always includes significant others at key events despite the expense doubling, this award is given not to employees, but to the significant other for their support; they receive a weekend away for two at a spa, complete with babysitting services.
The final example is the Fearless project award, which links directly back to the agency's second value of being fearless. Employees pitch ideas for fearless projects and the entire workforce selects the winner, who receives $15,000 to go out and do their project, with the responsibility of sharing the outcome and experience.
These programs have made a difference in the motivation and engagement of the agency's workforce. In three years, staff turnover is down 75% and remains way below the industry average. Over a quarter of the staff have been employed for five years or more, and the agency has experienced double‐digit revenue growth every year in that timeframe. “Our culture is everything,” says Venables. “I have faith that if we can cultivate the right culture, it will attract and retain the right people, and they will in turn do the right kind of work.”
Recognizing an Offline Workforce: ICC Sydney
Situation
ICC Sydney is an exhibition and convention center in Australia that is dedicated to bringing extraordinary experiences to its visitors. The same holds true for the workforce, with an Employee Value Proposition (EVP) saying, “Together we do the extraordinary.”
With this focus on people and on the “extraordinary,” the company decided to put in place recognition programs to thank the workforce for their dedication and reward them for their efforts. The challenge was: How can you do this for an operational workforce, where only 20% sit in front of the computer, with the remainder working out in the venues? How do you create something that is equal for everyone?
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The answer for ICC Sydney was to create not just one recognition program but three, helping to meet their objectives in a variety of ways.
- Checkbooks
People leaders are given physical checkbooks from the “Bank of Extraordinary,” which act as instant recognition for everyday achievements. Checks can be given out by leaders as well as by peers, with leader approval, to employees who demonstrate behaviors in line with company values. These checks, which come in $5, $10 and $20 denominations, can be redeemed for gifts or banked to save for larger gifts. There's a wide and interesting selection, ranging from a bottle of wine to movie tickets, to having your house cleaned.
- The Extraordinaires
The Extraordinaires is ICC Sydney's annual recognition program, with winners nominated and selected by peers. There are nine categories—three based on ICC Sydney values, three based on their EVP and three aligned to the business. Winners are selected by a panel of employees representing all levels within the company, who vote based on specific selection criteria. Crystal engraved trophies are awarded and photos are taken to hang on a special wall, giving the employee and others something to remember long after the award ceremony.
- Golden Ticket
The Golden Ticket award can only be awarded by the CEO, and is done in special circumstances when an employee has gone above and beyond. A recent award example is an office employee who heard on the radio that a fire had started at an exhibition and ran down and put it out, going above and beyond to manage the situation. The award is a choice between an extra day of vacation or a stay at a five‐star hotel with their partner.
Together these awards highlight, recognize and reward employees for truly being extraordinary. “It is only through the extraordinary efforts of our team that we can deliver extraordinary events. Reward and recognition has been the cornerstone of our success and has been the key ingredient to bring our HR programs together,”says Mathew Paine.7
A Recognition Program that Will Make You Smile: Hershey Company
Situation
Go to the Hershey Company's website and you'll find that it says, “We've been bringing goodness to the world, one smile, one moment and one person at a time.” In 2013, the company's engagement survey found a decline in how employees felt they were being recognized, which opened up an opportunity to deliver on the company's mission better. What could the team do to bring smiles back to the faces of employees?
The answer was to design a new global recognition program, called, aptly, Hershey “SMILES”. Since the program's been in place, it's outperformed expectations with an increase in employee engagement scores of 23% (14 basis points) over a three‐year period. The program is so much a part of the company and the culture that, as Cesar Villa, Director of Total Rewards, says, “One employee is recognized every seven minutes.” That's a lot of smiles!
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Before putting SMILES in place, Hershey's had different recognition programs in 26 countries, so its 18,000 employees were having different recognition experiences. SMILES, which is now delivered to all employees globally in five languages and is based on the company's global behaviors, provides a combination of both consistency (one program and one platform) and flexibility (six recognition levels to choose from).
The six recognition levels range from a simple thank you to a financial award in the amount of $250 (or local equivalents). “We started with four levels, but found we needed additional levels to award for specific situations,” says Villa. To ensure levels are selected in a consistent way, the recognition platform asks five questions, leading the person requesting the award to the right level, and provides additional tips and training.
To work alongside the SMILES program, two other programs support the renewed culture of recognition. The first is a quarterly social recognition called “Remarkable People,” a program to highlight employees who have been recognized during a specific time period. The second is the “Milton Hershey Award for Excellence,” which is an annual celebration to recognize remarkable successes across all areas of the business. Together, these programs drive employee engagement and link to the company mission by recognizing one person at a time, bringing one smile after another.
Adding a ThankMe to Your Recognition Program: Coleman Group
Situation
When Joanne Sullivan,8 Corporate Social Responsibility Director, moved from the hospitality to the demolition sector, she saw some immediate opportunities. She had seen first‐hand the power of recognition with hospitality customers and employees, and wanted to bring this to Coleman to overcome the challenges of engaging with a workforce dispersed across 10 moving worksites who demolish big and complicated buildings. She developed an innovative and cost‐effective recognition program that increased employee engagement from 60% to 82% in just one year. That's a huge achievement at any company, but even more so since she had to win over the hearts and minds of a workforce unaccustomed to recognition.
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When Sullivan first went to the business with her recognition ideas, they “just stared at me, and said that no one would like them.” She decided to give it a go anyway, and introduced “Wacky Wednesday”, which involved sending each site a box containing old‐fashioned games and sweets. Sullivan said it was hit and miss, but when she asked for feedback, ideas rolled in for the next event, so next they did a “Quiz Week”, posting questions on the company's online intranet each day relating to business and company values, with teams winning prizes for the best answers.
These smaller events grew into “ThankMe Week”, which now takes place twice a year. It's the company's way to “genuinely say thank you,” says Sullivan, with a new activity launched on the intranet daily. Recently, one of these weeks included “Munchy Monday”, where each site bought breakfast for employees; “Time Off Tuesday”, where an employee's name was picked every hour to get their birthday off; “RewardMe Wednesday”, where employees won cash prizes through the company's discounts portal; “ThankMe Thursday”, where senior leaders created and posted a video to thank employees for their efforts and contributions; and “FreeTime Friday”, where all employees could go home two hours early.
According to Sullivan, “We plan it well in advance so it doesn't affect day‐to‐day activities, and give managers a month's notice to plan their workloads.” This is extremely important, since 70% of their workforce works for clients offsite, and the business wants all employees to have the same experience. “We've had to get creative,” says Sullivan, but employees have helped the HR team come up with new ideas to keep the week fresh and effective. This works, along with peer‐to‐peer e‐cards and manager instant awards, which empowers managers to give small cash awards to employees with no approval required. Together, these programs create a culture where employees feel appreciated 365 days a year.
Recognition that “Crushes It”: SnackNation
Situation
SnackNation, a office snack delivery service, had been holding a “Crush It Call” every Friday at 4 p.m. since the company was founded. The entire team would form a circle, go around the room one by one and recognize someone who had “crushed it”—gone above and beyond in a way that exemplified the company's core values—and then name one thing they were grateful for. It had become a signature part of the company culture, embodying the desire to “shine a light on the accomplishments and every‐day victories that might otherwise go unsung,” according to Jeff Murphy, Director of Communications.
But then something happened: The company grew. With more than 100 people, it simply took too long to go around the circle. Was it time to give up on the tradition, or did the company need to find a way to keep it alive? Luckily, the company chose the latter, and evolved the Crush It Call to achieve the same effect, while still meeting the needs of the growing business. It's contributed to the company being named to Entrepreneur magazine's Top Company Culture in 2017, and by the LA Business Journal as one of the Best Places to Work in Los Angeles.
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The company first tried a technology‐driven approach to accommodate the growing team, with employees posting their Crushes on a digital portal. Automatic e‐mails were sent directly to the person being recognized, with a running feed of Crushes for the entire company to see at any point in time.
The digital version of the Crush It Call left out something essential, though: The element of human connection. “To us, giving a Crush is like giving someone a gift,” says SnackNation co‐founder and CEO Sean Kelly.9 “And giving someone a gift is much more special in person than virtually.”
Eventually, the Crush It Call went back to its in‐person roots, but this time on a voluntary basis and with a 30‐minute time limit. While everyone still attends, only those who volunteer present their Crush. They also end with a company leader speaking on a specific weekly theme, helping the team see the bigger picture of what was accomplished and what should be celebrated. It's a good way to maintain the human element while making the program feasible with such a large group.
“The Crush It Call is arguably more important now than ever before,” Kelly explains. “Besides facilitating team bonding and sending everyone into the weekend with smiles on their faces, the practice helps break down the siloes that can develop as organizations grow. It also helps give everyone a more holistic understanding of the business, and inspires new avenues for collaboration.”
Building Your Recognition Pyramid: Homeserve
Situation
Homeserve, a home emergency repair business, had a recognition program that had worked fine over the years, but as the business grew, it had “lost some direction, with employees not feeling recognized and with a lack of consistency,” according to Liz Crutchley,10 Head of Reward and Benefits. The company decided to develop a new recognition strategy, one with a very straightforward objective of “keeping it effortless,” which aligned with HomeServe's customer‐first service approach.
It has been highly successful, helping Homeserve increase employee engagement from 56% to 82% over the last three years, as well as earning recognition itself, ranking third on Glassdoor's Best Places to Work after never having been on the list in the past. In addition, Homeserve also made the list of Bloomberg's Best UK Employers.
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The new recognition strategy, “Special Thanks and Recognition” (STAR awards), was developed using a pyramid approach, creating four levels of recognition to engage and recognize employees against the company's people behaviors.
The first level is anytime e‐cards, where employees at any level can send e‐cards delivering a simple message of thank you. The next level is “Above and Beyond” awards (bronze, silver, gold and diamond), with increasing financial value ranging from specific demonstration of one of the people behaviors through demonstrable performance to help the business achieve its strategic goals. Anyone can be nominated, with senior managers approving and then awarding employees money to be spent through the company's online employee discount platform.
The third level sees all those who received gold and diamond awards put forward for a Quarterly award, with public recognition to showcase their contributions and additional financial rewards through the discount platform.
Finally, for the Annual award, the best of the best are selected from quarterly award winners and invited to a memorable award event and receive praise and recognition from the executive team for their significant contributions and to celebrate their accomplishments.
The theme throughout the four levels goes back to Homeserve's initial objective, which was “keeping it effortless.” Each and every program is easy to understand and easy to use. It must be working, since the company's 3,000 employees sent more than 22,000 e‐cards and more than 5,000 STAR awards in one year alone.
Making Your Employees Feel Like Stars: Virgin Group
Situation
For more than five decades, the Virgin brand has been recognized for providing a “unique and exceptional customer experience,” whether that's in its banking, travel, entertainment, health and fitness, or communications business. All of it is accomplished through the company's brand values of “delightfully surprising, red hot, and straight up.”
How does this translate into a group‐wide recognition program and event? How would Virgin create an annual recognition tradition to bring the group together, celebrate and recognize amazing employees from all over the world, creating the excitement and buzz that Virgin delivers to customers?
The answer? “Virgin Stars of the Year”, which is one of the major highlights of the Virgin calendar. As more businesses have joined the Virgin family, the reward has grown from a simple dinner with founder Sir Richard Branson and his family to an event that could give the Oscars a run for their money.
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During the year, recognition is left up to the individual businesses, but when it comes to annual recognition, that is done at the Virgin Group level with the Star of the Year event. About 50 employees are selected from the 71,300 staffers around the world for bringing the Virgin brand to life, and brought to London for what Samantha Smart, People Strategy Business Partner, calls “a once‐in‐a‐lifetime magical experience.”
There's magic in everything surrounding the program, whether it's the event itself or how employees are recognized. The event always has a theme; a recent one was “Willy Wonka meets Alice in Wonderland.” The team brought the theme to life by serving cocktails in teacups, having a golden gate and having no other than Sir Richard Branson greeting attendees dressed as Willy Wonka. The awards, besides bringing awardees to London (many for the very first time), gave recipients goody bags brimming with gifts from different brands. Awardees also had their pictures taken with Branson and, finally, actually had stars named after them.
Besides delivering against the objective of making employees feel valued and appreciated, and giving them a once‐in‐a‐lifetime experience, the awards also have been proven to increase retention, increase engagement and increase employee net promoter scores (eNPS). And why not—a night like this would certainly make anyone feel like a star!