Let's face it: The past several years have been challenging. Employees that have a job are stressed out. More often than not they are doing the work of several people. Their supervisor runs around mumbling "be glad you've got a job" and things of that nature. Employers are often sending a message to employees, and not the one that is intended.
2.6 million jobs were lost in 2008. Everyone knows people out of work, friends and family both. In May of 2009, according to the U.S. Bureau of Labor Statistics, the unemployment rate had risen to 9.4%. Across the board, Americans felt losses of income, employment, wholesale-retail sales, and industrial production. It might be a natural conclusion that companies would take this opportunity to trim expenses, including employee recognition programs whose ROI are hard to track.
The reality is that this is far from the case. While it is difficult to track the return on investment, recognition programs clearly have a positive effect on employee morale and cutting these programs would cause that to plummet.
A recent study showed that 75 percent of HR managers indicated they are maintaining their employee recognition programs. This is even though they are cutting the budget in other areas of the company. Another 5% indicated they had increased their recognition budget. This is done while knowing that further layoffs are coming and these cuts will impact productivity levels.
In order to measure success metrics, companies recognize that they need to have employee recognition programs in place. To make your employee recognition program successful, measurable and personal, you need to start with the end result in mind. How can your company business strategy be linked to recognition in a measurable manner? This is key, and doesn't require complicated analysis. Senior management needs to buy into your recognition program and lead the way. If you want to improve employee satisfaction by 6%, then find a metric that can be measured and use that to drill down to get results. Since "employee satisfaction" isn't readily measurable, look instead at employee participation levels and other indicators of employee engagement that you have. Recognition programs are key indicators of employee participation. Identifying key supervisors that are lacking in recognition training becomes apparent when measuring participation levels. Those that are giving recognition regularly have higher participation and satisfaction levels.
Another measurable metric is manager utilization of recognition. You may set a target of 75% manager utilization. If your managers understand and use recognition, they are more likely to take advantage of a system to practice giving it. With that system in place, you can see which managers are using the recognition system and which are not.
Next step is to analyze your existing programs and identify which ones are working and which ones are not. Use employee surveys and ask employees directly what kinds of treatment they like and what they don't. Various firms offer surveys in cultural assessment and can offer cost effective surveys that will deliver on the spot metric results.
Implementing the right program is a key step to making recognition strategic and allow you to capture employee recognition activity in an efficient maner. Depending on the programs involved, you may want to outsource the administration of the program. Recognition nominations and reward redemptions may need to be on an outsourced platform if your staff can not support it. Don't tackle projects that you can not support long term.
As you study your metrics and understand the results, what does the data tell you about the workforce and employee recognition? Your data has to be measurable. How many employees were nominated in the month of July for the Mentoring Award? If you have a formal system in place to track this, it is possible to assess participation rates by managers and employees. This data can then be correlated to employee engagement to assess participation rates.
Measure employee attitudes with straightforward survey questions. Make sure your employees feel empowered and free to answer and express their true thoughts in a open and candid maner. We have seen the best success from companies that have:
- a framework for strategy
- have executive buy in
- the systems in place to capture data and effectively measure their employee recognition practices for ROI justification.
Measurement of recognition metrics will also show employee accomplishments and areas for employee improvement. When the time comes to evaluate, having the data is the key to success.
Do you struggle with ROI on employee recognition programs? One area to look at is comparing the production of the long-term employee with the cost to attract, recruit, train and retrain a new employee. Employee turnover costs and retention rates are quantifiable. You can use this as you look at justifying length of service recognition programs and the value to the organization.
Employees like recognition. It can be a pat on the back, a formal thank you, a group presentation, an incentive, a gift or a symbolic award. If you have the opportunity to upgrade your recognition, now is a good time. Success is measured by the stories we hear, the data that is produced, the money saved, the talent we train and the smiles on our employees' faces during this recession. This proves why we need recognition programs.