Published on February 10, 2009
TheWhitePaper* ISSUE 3 JUNE 2008 Recognition: The ‘Tipping Point’ in Building Employee Engagement A vital step to unlocking the engagement dividend in your organization
TheWhitePaper* Are Your Employees Engaged? Studies show engaged employees stay longer, are more productive, more consci- entious, and make fewer errors. They are simply prepared to go the extra mile, daily delivering their extra discretionary effort to your organization. That translates into improved customer satisfaction, higher sales and a healthy bottom line. En- gaged employees are also strong word of mouth ambassadors reporting on what a great place to work your company is (to future employees and customers alike), but currently, only one in seven employees is fully engaged in the workplace. One in four is actively disengaged! What about everyone else in the organization? Well, they fall somewhere in between. Every day, Globoforce helps Global 2000 companies improve employee engagement levels through our Here is the bad news for organizations that don’t awardwinning, strategic, employee recognition solu- take engagement seriously: tions. We don’t just talk about the merits of building “Organizations with large numbers of dissatisfied an engagement culture in which each and every em- employees have more absenteeism and lower pro- ployee is driven to succeed, we make it happen. ductivity – as well as 51% higher turnover rates than those with engaged employees.” We share with you our insights into creating a positive, engaged environment where your people see best - James Harter practices, strong ethics and exceptional performance Chief Scientist, Gallup’s International Management. being recognized and rewarded consistently, openly and fairly; an environment that encourages loyalty, commitment and honesty of effort, resulting in signifi- cant Return on Investment (ROI). Only one in seven employees is fully engaged at One in four employees is actively disengaged. his or her workplace.
TheWhitePaper* Employee Engagement Matters Employee engagement is the latest buzz within organizations today, but what does it mean for your company? Well, for starters, “Engagement” is not just another buzz word. It’s a real business Return on Investment opportunity. Studies show that improved employee engage- ment leads to demonstrable increases in profits, sales, customer loyalty and above average productivity. Employee Engagement = Big So, what’s the secret to achieving this engagement dividend payout? ROI Dividend! In our view, recognition is the “Tipping Point” that Companies that utilized an effective employee rec- makes the vital difference between employees being ognition program enjoyed a 109% three year me- “willing” ones, or truly “engaged” ones. dian return to shareholders vs. a 52% return for the same period for those companies that did not. Recognition is no longer a “nice to have”. It can be the Watson Wyatt Study of three million employees, as “glue” within your Engagement Strategy if you aim to: quoted in Forbes magazine (2004). * Be competitive Gallup studies based on surveys of millions of em- * Communicate to employees they add value and ployees globally, have proven positive engagement you acknowledge them results in: * Create an engagement culture * Get the engagement dividend payout * 27% higher profits * 50% higher sales * 50% higher customer loyalty * 38% above average productivity How Engagement Affects Financial Performance—One-Year Study In today’s competitive global econ- Companies with low employee engagement Companies with high employee engagement omy, getting more discretionary ef- fort from employees is the key to 12-month change in operating income 19.2 -32.7 business success. 12-month net income growth rate 13.7 -3.8 12-month earnings per share growth rate 27.8 -11.2 40% 30% 20% 10% 0 -10% -20% -30% -40% - Towers Perrin Global Workforce Study 2007-2008
TheWhitePaper* So How Do You Implement Employee Engagement? What does the research tell us? Building a recognition program within your organi- zation helps establish this culture of engagement Companies with recognition cultures are proven to across your global organization. succeed at approximately twice the rate of those that do not. The evidence is built on various studies over Recognition programs help employees see the bigger recent years from well respected sources. picture (a key characteristic of all engaged employees). They build the trust critical to full engagement and fos- What type of results should I expect? ter a “thank-you” culture throughout an organization, motivating employees to take pride in their work. At Globoforce, we firmly believe that the results you will achieve depend on your organization’s Effective recognition programs are those that ensure level of ambition. consistency by assessing behaviors and results deserv- ing of recognition, and then recommend the appropriate When it comes to your program’s success, the phrase award level. Organizations should, therefore, implement “the tempo starts at the top” really does hold true. a program that provides positive reinforcement for con- Senior level validation of the program and ambition for tributions that align with the company’s overall goals. the program’s success is essential. In order to effec- tively build a culture of engagement within your orga- nization, your employee recognition program should “If you take all the evidence, there’s a compelling case be driven by a core, in-house program management that an organization with engaged people [will] do fina team with senior executive “program champions” that ncially better than one with disengaged people.” encourage employees to make recognition a part of their daily work life and drive program objectives. - Towers Perrin, 2004. Add to this how your recognition program will not only become a conduit to communicate and explain The “Tipping Point” is Recognition company values, but more importantly help put these values into day to day action, and you will be In our opinion, recognition is the “tipping point” in well on the road to success. capturing the engagement dividend. A 15% improvement in levels of engagement corre- lates with a 2% improvement in operating margin. In January 2005, a Globoforce client with over 40,000 global employees launched a new, global employee recognition program. In the space of just 24 months, this new program has helped increase employee en- gagement/satisfaction survey scores from the 60%s to the high 80%s.
TheWhitePaper* What Is Your Ambition? If your ambition is to get that engagement dividend, we recommend that you make Recognition the GLUE in your Engagement Strategy. Based on the growing mountain of research on the These are the ingredients that will differentiate the engagement topic, most observers recommend five mediocre engagement programs from the most ex- essential ingredients, as “must haves” in an effective tremely effective programs. What is really remark- engagement strategy; these are in addition to the ba- able is how pivotal an effective recognition program sic foundations of good HR practice. can be in helping you to achieve your goals in each and every one of these five essential ingredients. Let’s look at these five essential ingredients of the engagement puzzle: 1. Know Your Workforce goals. Now, you’ll have ALL your employees interested! Building these into a recognition program makes them Who are they, demographically, culturally—but most tangible and real for everyone, everyday. important of all—psychologically. What’s their level of satisfaction—or engagement? You’ll need a bench- mark before you get started to know how extensive The Successful, Innovation-Driven Culture your “psychological contract” with your employees Employees perceive company as successful is today. What satisfies and what dissatisfies your Employees do not perceive company as successful employees? You will likely find non-cash rewards will be an ideal basis for, both recognition and improving Support for Risk Taking Can try new things in order to be innovative performance by satisfying the human ego. They ap- 69 peal to the recipient’s need for Psychic Income™ by 46 providing your employees with a tangible symbol of Credible Leadership Senior management has sincere interest in employee well-being achievement that fulfils their needs. 47 26 2. Build Confidence in Your Leadership Supervisory Relations Immediate manager encourages new ideas and ways of doing things and Your Corporate Strategy 64 44 This one is a must have—there is no substitute for good leadership and having the right strategy. But where Rewarding Innovation Immediate manager recognizes and appreciates good work companies so often let themselves down is by not mak- 68 49 ing these real, every day living entities for all employees to emulate. Publishing documents about your mission 0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% statement or posting it on a wall is not enough. Effective % of respondents agreeing with statement recognition programs have senior level support and will - Towers Perrin Global Workforce Study 2007-2008 be purposely built around the company strategy and
TheWhitePaper* 3. Inspire 4. Communicate Often Feeling inspired in your workplace naturally increas- When it comes to engagement, you can never com- es your desire to do more, and do better. Recognition municate too often! We encourage you to think programs offer executives the platform for commu- about your employees as you would your customers. nicating their vision. They are also an opportunity to Launching an engagement and recognition program brand that vision. One of our clients communicates is like launching a new product – it requires continu- everyday to employees through their recognition ous communications through all stages of its lifecycle program about “The Power of YOU”. Successful to keep it active and effective. Frequent program com- programs are those with CEO-level support. Having munication raises program awareness, increases par- a CEO act as a program “champion” validates the ticipation, boosts performance, and, most importantly, program goals and supports program implementa- helps develop that culture of engagement. tion, helping your organization to inspire and meet its engagement goals. 5. Build an Appreciation Culture Employees will be quick to ask what’s in this for me? For the company the answer is simple—remember to say “Thank You” often! Aside from offering fair and merit based total rewards programs, make sure to mark the difference between compensation and recognition. If you only have compensation programs, you simply will not be saying “Thank You” often enough. Build- ing a recognition program will ensure everyone must say “Thanks,” in both formal and informal ways, but most importantly in a way that boosts your employees Psychic Income™, not just their monetary income! Successful programs are those that award frequently, at all levels and across all geographic regions, for their genuine contributions to the organization. With more people receiving awards, the greater the awareness will be that the company is committed to building a culture of appreciation.
TheWhitePaper* Today’s “Most Admired” Companies Have the Recognition Factor! Today, Globoforce is working with the biggest and the An engaged workforce captures the discretionary ef- best—great companies including P&G, Discovery fort of every employee, resulting in increased pro- Channel, Avnet, Intuit, Dow Chemical and Amgen. ductivity and success. We are helping to foster a culture of engagement Central to an engagement culture is a global recogni- through fast and timely recognition that’s rooted in tion strategy that rewards teamwork and reinforces their corporate vision and values. company values and mission. Do You Have the Recognition Factor? It’s time for you to take control of your recognition program. With a set of specific program objectives Is your employee recognition program delivering the in mind, you can design a program that recognizes results your company wants? people in your organization who exhibit high perfor- mance that positively reinforces personal, business If your ambition is to capture the engagement divi- and functional goals and helps achieve company dend, you need to match your recognition strategy success. to that ambition. Evidence has shown a profound impact on people who receive recognition and, like- wise, a profound impact on the bottom line for the organization that fosters an engagement culture.
About Globoforce Globoforce is the leading worldwide provider of on-demand strategic reward and recognition solutions for Global 2000 companies. Globo- force’s flexible and efficient recognition tool can scale from one user to millions of users with ease, offering global companies a powerful and secure solution to implement and manage their companywide or divisional employee recognition programs. Through a dynamic, easy-to-use, on-demand technology platform, Globoforce transforms the way companies engage, motivate and empower their workforces across the world. Co-headquartered in Southborough, Mass., and Dublin, Ireland, Globoforce was recently selected by the Great Place to Work® Institute as one of the “50 Best Companies to Work For.” Globoforce won a 2007 Process Innovation Award for the creative deployment of Dow Chemical’s global, on-demand employee recognition program. Globoforce also won Human Resource Executive magazine’s coveted “Top HR Product of the Year” award in 2004 for its revolutionary on-demand software solution. Some of Globoforce’s world-class customers utilizing this enterprise- class solution include Amgen, Avnet, Dow Chemical, Intuit, Procter & Gamble and Reuters. www.globoforce.com. Globoforce (North America) Reservoir Corporate Center 144 Turnpike Road, Suite 310, Southborough, MA 01772 USA Phone: +1 (888) 7-GFORCE (436723) Fax: +1 (508) 357 8964 Email: email@example.com Globoforce (Europe) 6 Beckett Way, Park West Business Park, Dublin 12, Ireland. Phone: +353 1 625 8800 Fax: +353 1 625 8880 Email: firstname.lastname@example.org © 2008, Globoforce Limited. All rights reserved.