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Employee Recognition

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Title: Employee Recognition


1
Employee Recognition
  • David Cherrington

2
Questions about Recognition
  • Do recognition programs influence employee
    attitudes?
  • Do recognition programs change employee
    performance?
  • Do recognition programs impact the companys
    bottom line?
  • What makes a good employee recognition program?

3
Types of Motivation Theories
  • Need Theories
  • Maslow, Rogers, and McGregor
  • McClelland
  • Herzberg
  • Reinforcement Theories
  • Classical Conditioning
  • Operant Conditioning
  • Social Cognitive Theory
  • Cognitive or Decision-Making Theories
  • Expectancy Theory
  • Equity Theory
  • Goal Setting Theory

4
Expectancy Theory
Performance
Reward
Effort
Motivation is a function of beliefs
5
Expectancy Theory
Performance
Reward
Effort
Valence
Instrumentality
Expectancy
6
Kinds of Rewards
  • Primary Rewards
  • Food and water
  • Sex
  • Removal of pain
  • Rest
  • Secondary (or learned) Rewards
  • Social approval
  • Achievement
  • Work values
  • Personal values
  • Recognition

7
Classes of Rewards
  • Intrinsic Rewards
  • Rewards that are self-administered and come from
    the job itself or the nature of the activity
  • Extrinsic Rewards
  • Rewards that are given by others
  • Physical rewards, such as money, gifts, awards
  • Psychological rewards, such as praise and
    recognition

8
Herzbergs Theory
  • Hygiene factors
  • Company policy and administration
  • Supervision
  • Working conditions
  • Salary
  • Interpersonal relationships
  • Personal life
  • Status
  • Security
  • Motivator factors
  • Achievement
  • Recognition
  • Work itself
  • Responsibility
  • Advancement
  • Growth

9
One Factory Theory versus Herzbergs Two-factor
Theory
One-factor Theory
Dissatisfied Not motivated
Satisfied Motivated
Herzbergs Two-factor Theory
Hygienes
Dissatisfaction
No Dissatisfaction
Motivators
No Satisfaction
Satisfaction
10
Intrinsic Reward TheoryWhy Rewards FailAlfie
Kohn, Punished by Rewards, Houghton, Mifflin Co.,
1993
  • Rewards Punish Rewards and punishment are two
    sides of the same coin. Every reward system is
    also a punishment system for those who fail
  • Rewards Rupture Relationships Reward systems
    create hierarchical relationships where those at
    the top control those at the bottom

11
  • Rewards Ignore Reasons Rewards are based on
    results and ignore environmental limitations and
    unequal circumstances
  • Rewards Discourage Risk Taking Minds that are
    foucsed on rewards fail to explore new ideas and
    creative solutions.

12
  • Extrinsic Rewards Destroy Intrinsic Satisfaction
    Anything that is seen as a prerequisite comes to
    be seen as less desirable. Rewards are usually
    experienced as controlling and we recoil from
    situations where our autonomy has been
    diminished.

13
Minimizing the Damage
  • Get rewards out of peoples faces
  • Offer rewards after the fact as a surprise
  • Never turn the quest for rewards into a contest
  • Make rewards as similar as possible to the task
  • Give people as much choice as possible about how
    rewards are used
  • Try to immunize individuals against the
    motivation-killing effects of rewards.

14
Summary Motivation Model
  • Effort
  • Expectancy
  • Instrumentality
  • Valence

Performance
15
Summary Motivation Model
  • Ability
  • Skills
  • Training
  • Effort
  • Expectancy
  • Instrumentality
  • Valence

Performance
X
  • Goal Setting
  • Specificity
  • Difficulty
  • Acceptance
  • Commitment

16
Summary Motivation Model
  • Work
  • Design
  • Ability
  • Skills
  • Training
  • Effort
  • Expectancy
  • Instrumentality
  • Valence

Performance
X
  • Organizational
  • Structure
  • and Culture
  • Goal Setting
  • Specificity
  • Difficulty
  • Acceptance
  • Commitment

17
Summary Motivation Model
  • Work
  • Design
  • Ability
  • Skills
  • Training
  • Rewards

Intrinsic
  • Effort
  • Expectancy
  • Instrumentality
  • Valence

Performance
X
Extrinsic
  • Organizational
  • Structure
  • and Culture
  • Goal Setting
  • Specificity
  • Difficulty
  • Acceptance
  • Commitment

18
Summary Motivation Model
  • Equity
  • Comparisons
  • Work
  • Design
  • Ability
  • Skills
  • Training
  • Rewards

Intrinsic
  • Effort
  • Expectancy
  • Instrumentality
  • Valence

Satisfaction
Performance
X
Extrinsic
  • Organizational
  • Structure
  • and Culture
  • Goal Setting
  • Specificity
  • Difficulty
  • Acceptance
  • Commitment

19
Implications from Theory and Research on How to
Motivate Others
  • The best summary principle regarding motivation
    is People do what they expect to be rewarded
    for doing
  • Set clear and specific goals with employees.
  • Employees should feel that they can accomplish
    the goals. Thus they need to have the ability,
    training, and resources to succeed.
  • Goal accomplishment should be linked with
    highly-valued intrinsic and extrinsic rewards.
  • Rewards should be seen as fair and equitable.
  • Recognition must be seen as sincere and deserved.

20
Principles of Meaningful Recognition
  • Describe the persons contribution
  • Identify specific actions and outcomes
  • Describe the contributions in the presence of
    significant others
  • Explain why it was helpful
  • Identify how it helped the company or society
  • Express sincere thanks
  • Verbal expressions are essential
  • Awards can increase the symbolic meaning

21
As a general rule, the most meaningful extrinsic
rewards are
  • 1. Awards that have symbolic meaning due to their
    association with the organization (such as items
    that symbolize the companys value or contain the
    company logo)
  • 2. Awards that are perceived as precious and
    luxurious (such as those made with gems and
    diamonds)
  • Awards that are valued by the person because of
    their instrumental value (such as travel,
    vacations, office or home accessories, or
    sporting equipment)
  • Awards that have enduring value (such as most
    non-cash awards)
  • Experiences that make people feel special (such
    as banquets and other celebrations in their
    honor).

22
What types of employee recognition awards are
there?
  • Service/Anniversary awards
  • Peer-to-peer appreciation
  • Performance awards
  • Spot awards for good citizenship behaviors
  • Safety
  • Sales performance
  • Suggestions ideas
  • Attendance
  • Employee of the month/year awards
  • Retirement awards.

23
When and How are Awards Given
  • In a staff meeting
  • During a performance review
  • In a public gathering, e.g. banquet
  • Wall of Fame
  • Peer-to-peer interchange
  • Mass media, e.g. newsletter
  • Spontaneous comments supervisors or peers
  • Mail, e.g. email or written notes.

24
What Awards are Given?
  • Certificates or plaques
  • Gift cards
  • Personal praise and commendation
  • Praise in public
  • Money
  • Merchandise
  • Travel and vacations.

25
Why do companies use employee recognition
programs?
  • Increase employee retention and reduce turnover
  • Increase employee loyalty
  • Make a statement about whats important to the
    company
  • Build self esteem, reinforce desired behaviors,
    create an atmosphere of appreciation and trust
  • Quality, continuous improvement and effective
    organizational change
  • Bottom-line concerns- increasing profitability
    and sales- are secondary.

26
Research The Effects of Incentive Programs on
Employee Attitudes
  • Respondents
  • 1367 employees
  • 73 companies

HR Programs
Incentive Programs
Employee Attitudes
vs.
Recognition Practices
27
Attitudes vs. Incentive Programs
  • Three Employee Attitudes
  • Job Satisfaction
  • Employee Engagement
  • Organizational Commitment
  • High-performance HR programs (14)
  • Piece-rate incentive
  • Merit pay increase
  • Annual bonus
  • Profit sharing or gain sharing
  • Group or team incentives
  • Formal performance evaluation
  • Employee newsletter
  • Career development or training
  • Written job descriptions
  • Promotion from within
  • Grievance or complaint system
  • Flexible work schedule
  • Quality of work-life
  • Employee attitude survey
  • Recognition Awards (8)
  • Length of service
  • Above and beyond performance
  • Sales performance
  • Retirement
  • Suggestion or creative ideas
  • Employee of the year or month
  • Safety performance
  • Attendance

28
Results Evaluating Our Original Questions
YES!
  • Do recognition programs influence employee
    attitudes?
  • Do recognition programs change employee
    performance?

Q Have you ever been formally praised at work?
29
Results Evaluating Our Original Questions
Yes
  • Do recognition programs influence employee
    attitudes?
  • Do recognition programs change employee
    performance

YES!
Sig. level .001
30
Results Post-hoc Analysis
The mere existence of recognition programs does
not seem to have a large impact on attitudes.
31
Results Post-hoc Question
Q If the mere presence of a recognition practice
does not improve employee attitudes, then what
does?
A How well the program is executed
32
Conclusions
  • Formal praise and recognition
  • Significantly affects employee attitudes
  • Significantly improves job performance
  • Additionally
  • In order to improve employee attitudes, it does
    not necessarily matter which incentive an
    organization implements but how well it is
    executed.

Two case studies
33
Case Study MGM Grand
  • Encourage behavior which will drive MGMs
    performance.
  • Recognize Individual team effort and quality
    improvement.
  • Allow Management to develop, enhance and maintain
    culture.
  • Recruit and retain top caliber people.
  • Recognize more employees more frequently.

Result Vote best place to work 2005 2006
34
MGM Grands Employee Activities
  • Star of the month
  • Employee of the Year Galas
  • Maximum Vegas Performance (MVP) Programs
  • Voice Foundation fundraising celebrations
  • Diversity Events
  • Patriotic Celebrations
  • Book Fair
  • Jewelry Fairs
  • Blood Drives
  • Talent Shows
  • Pet Photo Contests
  • Summer Fun Events
  • Thanksgiving Turkey Giveaway
  • Employee Holiday Parties
  • Employee Holiday Gifts
  • Golden Key

35
Award Program Star of the Month
  • Employee picture on grand marquee
  • 500.00
  • Hollywood star
  • Shopping Spree
  • Limo ride to mall
  • Tuxedos, gowns, shoes, make-up, accessories
  • Trip filmed by MaxTV
  • Each Star of the Year Nominee receives
  • 1,500
  • Trip for two valued at 2,500 to an exotic locale
  • A week of paid leave
  • Presidents Breakfast
  • President Thanks Employees
  • Watch Video of Shopping Spree

36
MGM Grand Gala
  • Entering Gala
  • Limo Rides to Gala
  • Red Carpet walk with Paparazzi
  • Professional Photographers
  • Five Star Dinner
  • Introduction of Nominees In front of 1,800
    fans
  • Tribute Video
  • Popular Entertainer

37
Case Study Cargill, Inc.
  • Why is recognition important to Cargill?

A 2004 survey by Robert Half International
Limited praise and recognition was ranked in
the top three reasons why employees leave their
jobs.
Fortune magazines 100 best companies to work
for Recognition Fourth highest ranking factor
in making organizations a desirable place to work.
38
Cargills Formal Awards
  • Best Plant Award
  • Environmental Health Safety Award
  • Business Excellence/Spicolla Award
  • Chairmans Award High Performance
  • Chairmans Award Customer Focus
  • Chairmans Award Innovation
  • Chairmans Award Leadership
  • Annual BU/Functional Awards

39
Cost/Benefit Analysis of Employee Recognition
Programs
  • A U.S. employee who earns 32,111 receives an
    average of 10,290 in funds they expect but dont
    actually see (insurance, sick pay, holidays,
    pension).
  • Add in another 1,548/year for training, payroll
    expense, health claims processing, etc.-most
    employees dont realize these costs exist!
  • The cost to build loyalty trust through a
    recognition program is minimal-approximately less
    than 1/10th of 1!
  • Compared to other employee maintenance costs,
    employee recognition programs have the highest
    ratio of visibility per .

40
ROI Linkage Analysis for Scotiabanks Applause
Program
Applause Participation
Employee Satisfaction
Customer Loyalty
Financial Return
Higher Applause participation is linked to higher
employee satisfaction
Growth in applause 3-4 growth in employee
satisfaction
6-9 difference in employee satisfaction 3-4
difference in customer satisfaction
1 change in customer satisfaction 3.4 change
in revenue
41
Budgets for Recognition Programs
  • Among the nine companies that were nominated for
    the RPI Best Practices winners in 2010, the
    amount budgeted for the recognition programs
    (among those who provided budget information)
    were
  • A telecommunications company with 36,000
    employees budgets 1.0 of payroll
  • An international bank with 60,000 employees
    budgets 0.7 of payroll
  • A healthcare company with 3,400 employees budgets
    0.2 of payroll
  • A bank with 23,000 employees budgets 8 mil
    (which equals 348 per employee).

42
Principles of Meaningful Recognition
  • Describe what the person did
  • Explain why it was helpful
  • Express thanks
  • Said in the presence of co-workers
  • Made by a knowledgeable superior
  • Awards have symbolic significance

43
Keys to success in implementing an employee
recognition program
  • Peer-to-peer recognition
  • Participants must believe that the program has
    value and have an understanding of expected
    performance results
  • Build fairness into awards programs
  • Involve employees in the design implementation
    of the program
  • Careful planning due diligence
  • Evaluate program to be sure it meets your goals
  • Involve senior management and be sure their
    support is evident
  • Be sure the award is timely
  • Have a well-planned presentation that is
    personalized and acknowledges the employees
    contribution.

44
Does it work?
  • The most powerful motivator is pure, genuine
    recognition. This type of recognition is far more
    powerful than rewarding employees with money.
    (John Ferrara, Executive VP, Goldmine Software
    Corp. from Incentive, Feb. 1998)
  • It is vitally important for managers and
    supervisors to understand that todays work
    force, particularly Generation Xers, respond
    positively to more than financial motivation.
    (Rosalind Jeffries, President, Performance
    Enhancement Group, from HR Focus, Jan. 1997)

45
Recognition Professionals International (RPI)
  • dedicated to the enhancement of employee
    performance through recognition, including its
    strategies and related initiatives. The
    association provides a forum for information and
    best practices sharing as well as education to
    foster the use, excitement, effectiveness, and
    enthusiasm of recognition.

46
RPI Best Practice Standards
  • Standard 1. Recognition Strategy
  • Standard 2. Management Responsibility
  • Standard 3. Recognition Program Measurement
  • Standard 4. Communication Plan
  • Standard 5. Recognition Training
  • Standard 6. Recognition Events and Celebrations
  • Standard 7. Program Change and Flexibility

47
1 Recognition Strategy
The ultimate goal of a recognition program is to
make people feel appreciated. To what extent has
the organization created a culture of
recognition? Organizations that have effective
recognition programs identify their values,
goals, and objectives and sponsor both
spontaneous (informal) and planned (formal)
recognition programs that are aligned with them.
48
1.1. How well has the organizations values,
goals, and objectives been defined? (.35)
49
1.2. How many and what kinds of recognition
programs does the organization sponsor? (.05) a.
Informal, spontaneous programs -On the spot
comments and awards -Thank you cards, letters,
or emails -Comments made in public meetings,
e.g. department meetings, staff meetings, company
seminars -Publicly printed commendations, e.g.
newsletters, emails, plaques
50
b. Formal planned programs (.02) -Outstanding
performance awards for which high performers
receive awards, such as merchandise, cash, or
travel. -Length of service awards. -Planned
recognition events that are intended to say
thank you, e.g. banquets and picnics. -Recogniti
on displays, e.g. walls of fame, employee of the
month
51
1.3. How well does each recognition program
contribute to the organizations values, goals,
and objectives? (.50) What are the objectives
of each program? What are the selection
criteria? What is the process for identifying
and nominating people? How well does each
program endorse the organizations goals?
52
2 Management Responsibilities
Successful recognition programs require excellent
leadership at both the policy making level of
senior management and the program level of
administration.
53
2.1. How supportive is senior management? How
much are they involved in defining the
organizations recognition strategy? How
enthusiastically do they participate in training
managers and personally recognizing employees?
(.46)
54
2.2. Has top management selected an effective
staff to administer the recognition programs and
provided them with adequate resources? (.25)
55
2.3. Do the people responsible for recognition
programs have the authority and autonomy to act?
Specifically, do they have the authority to
(.15) -Design program elements to implement the
recognition strategy -Establish recognition
practices and procedures -Negotiate with
vendors for award options -Negotiate programs
with labor organizations, if appropriate
-Create and administer recognition budgets
56

2.4. Are the people responsible for the
recognition programs providing sufficient
leadership and direction to administer the
programs effectively? (.10)
57

2.5. How often does senior management review the
recognition programs to determine their
effectiveness? (.10)
58
3 Program Evaluation
  • Recognition programs need to be evaluated to
    ensure that they are achieving their purposes and
    they are cost-benefit effective. Data evaluating
    recognition programs can be examined with respect
    to
  • comparisons over time within the company,
  • comparisons across similar companies,
  • overall percentages of employees who report
    positive attitudes, and
  • organizational effectiveness metrics.

59
The ideal methods for data analysis should
incorporate rigorous research methodologies, such
as a pretest-posttest control group design with
random assignment, a posttest only control group
design, a time series design, or a
quasi-experimental design.
60

3.1. Since the purpose of recognition programs is
to help employees feel appreciated, what changes
have occurred in feelings of appreciation,
organizational commitment, and perceived
organizational support? (-.09)
61

3.2. How satisfied are people with the
recognition programs? (.17)
62

3.3. How many employees participate in the
recognition programs? (.05) As recipients of
recognition experiences As persons providing
recognition to others.
63
3.4. What improvements have occurred in measures
of organizational effectiveness?(-.06) Turnover
Attendance Productivity Profitability
64
4 Recognition Program Communication Plan
An effective recognition strategy requires that
everyone knows how the recognition programs
operate, how to participate in them, and who is
being recognized.
65

4.1. Have the recognition programs been carefully
described and communicated throughout the
organization? Is there a culture of recognition
within the organization? Is this information
visible and easily accessible to all employees
through such media as bulletin boards, posters,
video, email, Intranet web sites, and company
handbooks? (.17)
66

4.2. Are program events, such as nomination
deadlines and ceremonies, adequately communicated
to all employees? (.03)
67

4.3. Are the people who are being recognized
informed of their selection in a meaningful way?
While there is an exhilaration associated with
surprise announcements, great satisfaction can
also be derived from anticipating a future event.
Either way, people should be informed in ways
that are perceived as meaningful and special.
(-.16)
68
5 Recognition Training
An effective recognition program requires that
everyone knows how the recognition programs
operate. Effective training needs to be a high
priority as an ongoing activity within the
organization.
69
5.1. Do all members of the organization
understand the principles of effective
recognition so they can participate in
spontaneously recognizing others at appropriate
times? (.32)
70
5.2. Have managers and supervisors been taught
how to identify people and nominate them for
recognition? Do they have a clear understanding
of the criteria for recognition? Do they know
how to document their recommendations? (.01)

71
6 Recognition Events and Celebrations
Although the most meaningful expressions of
appreciation involve intrinsic satisfaction,
celebrations and awards ceremonies can add to the
meaning and significance of recognition
experiences.
72

6.1. How well are the recognition events and
celebrations focused on expressing meaningful
appreciation on an individual basis? (-.31)
73

6.2. Are the recognition events and celebrations
adequately funded? Are they cost effective?
(-.40)
74

6.3. How well do the recognition events and
celebrations align with the organizations
culture? Do they endorse the organizations
values, goals, and objectives? (.20)
75

6.4. How well organized are the events and
celebrations? Are they fun and interesting? Are
they planned efficiently to avoid wasting the
time of the organizers? Is there an award
tracking system to facilitate the program? (-.17)
76
7 Program Change and Innovation
Effective recognition programs achieve a balance
between preserving the culture and traditions of
the organization while at the same time adapting
to changing goals and personal needs.
77

7.1. How well do the recognition programs
preserve the organizations culture by
reinforcing its traditions and rituals? (.20)
78

7.2. Is there a continuous improvement process
to improve the recognition programs based on
useful feedback? Are the events and celebrations
perceived as new and exciting? Are the awards
continually perceived as valuable? (-.10)
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