Recognition: A Secret Ingredient in Effective Talent Management

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When most HR leaders think about strategic talent management, they think of traditional levers:  leadership development, learning and performance management.  Few leaders focus on employee recognition, despite the fact that it is a $46B1 industry, with most organizations spending 1 percent of payroll2.  Today, however, we released new research, The State of Employee Recognition in 2012, to our membership that reveals that employee recognition could be the untapped secret lever many organizations seek to improve business outcomes.  Specifically, our research found that organizations with recognition programs that are highly effective at improving employee engagement had 31 percent lower voluntary turnover than those organizations with organizations with ineffective recognition programs.

However, recognition is not a stand-alone process. In research we released to our membership last spring, we found that employee recognition is just one critical element of successful performance management. The other important elements of performance management include goal setting and revising, coaching and development planning. (Research members can access research on those topics here:  goals, coaching, and development planning.)  These elements of performance management work together in concert to ensure employees receive the ongoing feedback and support they need to understand how they are performing and adjust their behavior in real-time. In fact, our research shows that organizations that revise their goals quarterly or more often – thus encouraging employees to change their behavior to adjust to changing circumstances – are nearly 50 percent more likely to be top financial performers, when compared to organizations that revise their goals once per year.

As one of the critical elements within performance management, employee recognition has the potential to make a substantial difference to how employees perform.

Recognition enables employees to be “caught doing something right,” reinforcing the right behaviors immediately.  Further, recognition helps create social norms that communicate how they are expected to behave. Unfortunately, our research shows that most recognition programs are not very effective (according to HR). Most organizations’ (87 percent) programs are focused on tenure (which does not improve employee engagement), unknown to many employees (58 percent of employees stated their organization has a recognition program, whereas 74% of HR respondents indicated their organization has a program), and so old as to not longer be aligned with the organization’s business strategy and culture (approximately 55 percent of programs are 6 years or older).

To refresh their programs, HR leaders need an understanding of how their organization compares to others and how to approach redesigning their organization’s current approach.  The research launched today, The State of Employee Recognition in 2012, is designed to fill that first need.  Our Employee Recognition Framework, launched to our membership earlier this spring, fulfills the second. 

In a free webcast today, we will introduce this new framework and explain how organizations can use it to design or refresh their current recognition approach.  Similar to our other frameworks, the Employee Recognition Framework is designed to be a graphical representation of how all the different elements of recognition fit together and the most important decisions an organization needs to make when developing a recognition strategy and program.  The Employee Recognition Framework represents a critical tool for organizations that are trying to refresh or entirely redesign their recognition approach because it helps leaders to approach recognition in a holistic fashion and design programs that are truly aligned to business strategy and outcomes while also fulfilling the needs of employees to appreciate one another. 

I hope you will join me for the webcast today and continue with us on the journey of understanding employee recognition. 

~Stacia

1 Incentive Marketing Association:  http://www.incentivemarketing.org.

2 “Trends in Employee Recognition,” World at Work, May 2011.

Stacia Garr

Stacia Garr writes on trends and best practices in talent management, focusing on topics such as performance management, employee engagement, career management and workforce planning. In her blog, she likes to share what she's learned about how to make talent management programs more frequent, collaborative, engaging and effective.

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