| Employee recognition is vital for performance-oriented | | | | year a new selection of gifts would be made available |
| companies that look for mobilizing all employees and | | | | so that with each significant anniversary, employees |
| stakeholders, prominently dealers and distributors, in the | | | | have a fresh selection of gifts to choose from" (Sims, |
| direction of clear business objectives ascertained by | | | | 2001). |
| sales, profits, customer satisfaction, and productivity. | | | | Thus, the center of the program is on the employee's |
| Such performance driven companies need to regularly | | | | anniversary, and not on the increased value of a gift |
| communicate and strengthen their dynamic aims. | | | | he receives. Nelson explains that the companies that |
| Nevertheless, recognition for such organizations goes | | | | have engineered this method have noticed remarkable |
| beyond the conventional character of service awards. | | | | improvement in their service program in terms of |
| In spite of the fact that recognition and incentive seem | | | | efficacy noted satisfaction and decreased costs. 500 |
| interchangeable, the two terms should not be confused | | | | of the Fortune 500 companies have formal Service |
| with one another. While the recognition includes all the | | | | Recognition Programs as they clearly accepts that |
| means that draw attention to employees who | | | | these programs pay by yielding reduced turnover, |
| perform, the incentives usually employ discerning | | | | improved safety performance and lower unscheduled |
| means to persuade people to accomplish a particular | | | | absenteeism costs. These companies have come to |
| objective like increasing sales. Recognition can be | | | | know that the employee turnover is one of the |
| impromptu, indeed to the level that there is no | | | | greatest covert costs, where on an average you hire |
| ceremonial announcement that the organization has a | | | | three and retain one each year. The training cost on |
| recognition program, while the incentives are well | | | | the average for the newly trained employee comes |
| known so as to build enthusiasm through material | | | | out to be eight hours, as an example then the it costs |
| reward. The true beauty of the recognition programs | | | | at least $60 to train a new employee, excluding |
| based on performance is their nature of surprise that | | | | mistakes and poor quality costs. Resulting, in the actual |
| is in contrast to service-award programs that make | | | | training cost to be at the amount of $180 for one |
| necessary ceremonies holding on a routine basis. In this | | | | employee that stayed for one year. This amount will |
| way the employees would be much more interested in | | | | build up as you may hire at least 20 employee to keep |
| performing better rather than just concentrating on the | | | | one for five years costing $1,000. |
| reward. | | | | Employee recognition programs save much for the |
| Employee recognition domain has become to gain | | | | company as no tax is levied on these programs, as |
| recognition among organizations as they begin to judge | | | | tangible gifts above $400 attracts 40% tax. |
| the impact of downsizing on long-term productivity, | | | | Recognition brings in social acclaim for the employee |
| profits, and the quality of products and services. | | | | and is something "extra" for the employee. |
| Previously, employee recognition meant service | | | | By far, recognition is the "Number One" reward that |
| awards, wherein recognition of their service years in a | | | | employees react to and is far more significant than |
| company people got an intensifying series of awards | | | | salary and benefits. Evelyn Clark designs and suggests |
| accompanying a mention in the employee newsletter, | | | | a new way to recognize the employees' efforts, |
| while staying until retirement, they might get a gold | | | | which is by story telling. Clark asserts that the |
| watch. From time to time, companies expanded these | | | | "managers who consistently tell stories of people |
| programs to comprise recognition for diverse actions | | | | "caught doing something right" discover that recognition |
| like superlative customer service; nevertheless often | | | | is truly a highly valued reward. The benefits are |
| these were limited to rewarding nature. | | | | numerous: |
| In the present era, no one just simply depends on the | | | | - "The employee is pleased that the manager noticed |
| incentives and reward system, rather in a downsized | | | | a job well done and took the time to acknowledge it |
| company; employees would ridicule a service award if | | | | - Other employees learn more about the behavior that |
| there were one. Thus, with more understanding of the | | | | the company values |
| employees' needs, companies are becoming more | | | | - Employees are motivated to enhance their |
| proactive when it comes to the employee recognition. | | | | performance |
| While the effective recognition include activities like | | | | - Employees take more pride in their affiliation with the |
| day-to-day, informal, and formal. For example, | | | | company |
| commendation is an illustration of day-to-day | | | | - Productivity and profitability increase" |
| recognition that costs nothing and can be given by any | | | | David Saxby narrates, "I'm amazed by the number of |
| person, to anyone anytime. While the form of informal | | | | companies that spend thousands of dollars to improve |
| recognition can take a diversity of forms, it has certain | | | | their technology, increase their marketing efforts and |
| limitations and oftentimes contains a low-cost, material | | | | set up that next killer sales program. Yet they don't |
| beckoning of appreciation or congratulations, the formal | | | | quite see the benefit of making an investment in |
| recognition includes awards for achievements, service, | | | | recognizing the most valuable asset they have: their |
| etc., and the celebration episodes at which all | | | | front-line employees. These are the people who |
| contributing employees take part and get recognition. | | | | interact with the customer every day, handle |
| However, a formal recognition customarily has | | | | customer-service conflicts and generate revenue for |
| inevitable policy and legal requirements. | | | | the company". According to Saxby, recognition does |
| In "1001 Ways to Reward Employees" and the "1001 | | | | not only means honoring the top performers, rather it is |
| Ways to Energize Employees", Bob Nelson and | | | | regarding recognizing people who better their skills all |
| suggests the significance of awards and recognition | | | | the time to give improved customer service and sell |
| and the reason that they are essential tool of | | | | more product. Saxby points out that recognition does |
| employee motivation, team building and productivity. | | | | not talk only of money, rather it concerns about a |
| According to Nelson, the American organizations did | | | | mere hand-written thank-you note or an inscription that |
| not always identify or accept this, as for a much | | | | sits in the entryway for the world to look at. Further, |
| longer time corporate America thought that high | | | | recognition must not be limited to the annual event or |
| salaries, cash bonuses and good employee benefits | | | | the monthly meeting where people are acclaimed for |
| were all that was needed to motivate their employees. | | | | their efforts, rather a positive attitude or an improved |
| While these factors do in an effective way provide a | | | | behavior must be recognized and praised immediately. |
| form of short-term motivation, however, much | | | | Recognition can come in different ways, like reinforcing |
| research finding points out that money is not an | | | | positive performance, providing incentives and rewards, |
| effective long-term motivational tool. Before 1954, what | | | | motivating with "high-impact" messages, rewarding |
| termed corporate motivation was the formula of | | | | extra efforts, honoring current employees and |
| Frederick W. Taylor that encapsulates that money | | | | personalizing the work experience. |
| was the primary motivator for all performance. | | | | Hiam (2002) suggests, "If you recognize and make a |
| Contrary to this scientific management formula, in the | | | | bit of a fuss about the good things employees do, then |
| Hierarchy of Needs Abraham Maslow in 1950's denied | | | | you will find yourself spending a lot less time worrying |
| this scientific management and originated that | | | | about the bad things they do. They will do less of the |
| individuals were not machines as they in truth have | | | | negative, and they will strive to do more of the positive |
| various levels of motivational contentment that need to | | | | things you are recognizing. It is far, far easier to lead |
| be appeased to a certain degree. Form this theory it | | | | people to improved performances by thanking them |
| becomes apparent that contentment on top of that | | | | when they do it right than giving them "grief" when |
| degree could be better consummated by using other | | | | they do it wrong". Hiam (2002) further incorporates |
| less expensive and increasingly effectual forms of | | | | that employers must "praise and recognize" their "star |
| reward. | | | | performers", and "recognize good effort, not just |
| In the 1995 issue of "Employee Relations Today", | | | | results". |
| Professor Kenneth Kovach reported that his most | | | | Handel in the reports, "In the business world, the |
| recent research proved the two most referred to | | | | greatest commodity to have is the best and brightest |
| factors of motivation by employees were not salary | | | | people. A recent survey by World at Work and the |
| and benefits, but more or less, an interesting job and | | | | National Association for Employee Recognition (NAER) |
| recognition for doing that job well. Frederick Herzberg | | | | shows that companies are beginning to realize this |
| also identified this importance of recognition by the | | | | more each day, as employee recognition programs |
| employer in his finding that employee accomplishment | | | | are still used extensively in these tough economic |
| and recognition are two motivating factors inherent to | | | | times. According to the 2002 Employee Recognition |
| the job environment. Furthermore, he asserted that the | | | | Survey, 84 percent of the 391 responding companies |
| job satisfaction is contingent on these factors over | | | | have an employee recognition program. This shows |
| and above anything. Thus a well planned recognition | | | | that despite a tough economy, companies realize the |
| program can, lessen turnover, assist in retaining | | | | importance of making sure their top performers are |
| competent people and elevate pride and loyalty in the | | | | happy. In fact, although the economy has dipped |
| company, which not only improves performance but | | | | substantially, employee recognition programs are |
| also brings about positive attitudes and raise a | | | | gaining in popularity, as 41 percent of respondents |
| productive and perpetual work environment. | | | | indicate they are doing more with their recognition |
| The programs that are meant to serve the purpose of | | | | programs than they were 12 months ago. More than |
| recognizing employees' efforts must be designed in a | | | | half (54 percent) of the respondents that said they do |
| manner that not just satisfies the importance of | | | | not currently have a program indicated they are |
| employees' recognition, but also take into consideration | | | | considering implementing one in the next 12 months. |
| the workforce diversity. Another thing is the | | | | Companies hope to achieve a number of things |
| involvement of the employees in this program | | | | through their recognition programs, but creating a |
| downright the grassroots level. Once designed, it is the | | | | positive work environment is the top reason cited, with |
| responsibility of the management to evaluate the | | | | 84 percent of responding companies citing this as a |
| existing program and make changes whenever and | | | | goal of their program. Other goals include, reinforcing |
| wherever feasible. Giving lapel pins or corporate logo | | | | desired behaviors (76 percent) motivating high |
| jewelry where the employees already possess them | | | | performance (73 percent), increasing morale (69 |
| would not create much of the sensation or motivation. | | | | percent) and supporting organizational mission/values |
| Kovach (1995) accentuates that there definitely is a | | | | (68 percent). The most popular method of recognizing |
| gap that exists between employee needs and | | | | employees is through gift certificates and cash, with 63 |
| employer's understanding of those needs. This gap is | | | | percent and 58 percent of companies reporting they |
| widened as the management overlooks the | | | | use these forms of recognition. The most common |
| differences in corporate culture and the consequent | | | | reason for giving a recognition award is "length of |
| contrariety in personal tastes evident in distinct | | | | service," (75 percent) followed by "above and beyond" |
| departments within an organization or at dormitories | | | | performance (64 percent)". |
| strewn across expansively "different demographic, | | | | Emery (2000) reports that "In today's fiercely |
| psychographic and geographic areas". Current | | | | competitive labor market, cash is key to attracting |
| research corroborates that a selection "program | | | | skilled technical employees, human resources |
| targeted at the employee's lifestyle is the most | | | | managers and business experts agree. But spiraling |
| appreciated and cost effective approach. The awards | | | | salaries and mammoth bonuses don't bind workers to |
| should be something that the employee wants, needs | | | | their employers. What employees really want is |
| and will use and cherish. It should be something special | | | | recognition for a job well done." |
| to the recipient. People never forget who gave them | | | | Experts maintain that it is not just the money that binds |
| something of personal value, nor do they ever forget | | | | employees to the organization; rather it's the |
| why it was given. | | | | recognition. However, if the awards are tied to the |
| The problem is that many recognition programs do not | | | | performance, then only the money matters but does |
| offer awards that employees really want. There is no | | | | not lessen the importance of recognition programs. |
| validity in benchmarking the most popular items in most | | | | Experts further elucidates that the "companies that |
| existing programs because the selections are often | | | | offer cash bonuses tied to performance are using their |
| obsolete. The most expensive award you can give | | | | money productively, but they need to offer other |
| someone is something they didn't want in the first | | | | rewards and make sure those rewards are tailored to |
| place, have no use for and will not use" (Nicastro, | | | | the organization and its employees". |
| 2002). Accordingly, Nicastro (2002) further researches | | | | Why Good Employees Leave: |
| in to the subject and narrates that the things that are | | | | - 41% Feelings that opportunities for advancement are |
| considered practically accepted with today's | | | | limited |
| employees are "electronics, fashion jewelry, brand | | | | - 25% Lack of recognition |
| name timepieces and watches, collectibles, sporting | | | | - 15% inadequate salary and benefits |
| goods and lifestyle targeted gifts. The most | | | | - 10% Unhappiness with Management |
| appreciated awards are items that the recipient would | | | | - 5% Bored with Jobs |
| like to own, but has not or can not justify buying for | | | | - 4% don't know/didn't answer |
| themselves". Nicastro (2002) further investigates that in | | | | (Source: Robert Half International Inc.) |
| a study of 3000 service recognition programs, it was | | | | In a NAER Regional Conference, Empowering |
| found out that the awards that are most adored are | | | | Excellence Through Recognition, 2002, following |
| when they are given on or near the employee's | | | | factors were identified as to the significance and |
| employment anniversary date. The study also | | | | materiality of the employee recognition programs. The |
| revealed that the "most common complaints by | | | | first factor that was identified was knowing whether |
| employees is that their anniversary came and went | | | | the employee wants recognition in private or public |
| without any recognition. Whenever possible awards | | | | keeping in place the cultural norms and etiquette. There |
| should be presented in front of peers, with someone | | | | was also a suggestion of creating a web site of |
| from administration, who is known, recognized and | | | | generic recognition that can be individualized. There |
| respected making the presentation. This does not | | | | must be a cultural promotion of peer to peer |
| mean you need to have an awards banquet; a small | | | | recognition so as to make everyone responsible to |
| departmental ceremony with cake and coffee can be | | | | recognize every other peer. Such sort of employee |
| just as effective. Recognize the achievement, talk | | | | recognition programs and cultural initiates have no cost |
| about the recipients accomplishments, contributions to | | | | at all, and organizations need to worry about the cost |
| the company and a short work related anecdote. | | | | that are or need to be incurred. Once embedded in the |
| Make the recipient and the accomplishment special. It's | | | | culture, it's a free ride. Further it can be an easy way |
| the timeliness, the respect and the special recognition | | | | to retain and motivate, and may be a part of fun as |
| that makes a lasting impression". | | | | recognizing for an accomplishment or improved |
| In the article, "Consultant Dispels Myths About Award | | | | performance may bring in surprises. This would not |
| Programs", Bob Nelson (2001) further elucidates most | | | | only makes the employee think they are valuable for |
| of recognition programs are outmoded. This Nelson | | | | the company but also ingrain in them a sense of |
| references to the 10-year national study, the | | | | belonging and association with the company. Involving |
| Independent National Study of Recognition Policies and | | | | employees in the design and implementation of the |
| Practices, by Perspectives Resources, Inc. This study | | | | employee recognition programs also bring about great |
| finds out that the outmoded factors of recognition de | | | | sense of valuation among the employees. It would |
| motivates rather than motivates the employees as | | | | certainly be more fun if the "employees tell YOU what |
| they no longer meet the employees needs and the | | | | they enjoy". |
| corporate objectives. "Companies are spending more | | | | An employee recognition program must incorporate |
| than $500 million annually on service award programs | | | | both the formal and informal awards in the program, if |
| that don't work," says Edward L. Ford, recognition | | | | given instantly have great significant value and esteem |
| consultant, "and minor changes will not address the | | | | and pride. A just Thank you card would serve the |
| problems. At the same time, with all the downsizing | | | | purpose most often. Other forms of recognition |
| and change taking place in business today, recognition | | | | identified in the conference were singing recognition |
| is more important to the morale of employees than | | | | that generates no cost to the company, an on-line |
| ever. It is imperative that companies take a fresh look | | | | thank you where the management gets a copy, |
| at what constitutes effective recognition -- including | | | | meaningful and sincere feelings both by the giver and |
| what the needs of the award recipient are." Giving | | | | the presenter, and even more better if the nominator is |
| insights in to the less important award program as | | | | involved. |
| compared to reward program, Nelson assets that | | | | But all this recognition efforts comes when the |
| organizations are haunted by myths that were | | | | manager is well aware of the beneficial impacts of the |
| prevalent in 60's and 70's. The first one that he points | | | | employee recognition programs and the positive |
| out is that "Logo emblems of gold and diamonds make | | | | attitudinal effects it brings about. And training the |
| the best award". Where for the myth he gives that the | | | | managers can do this. Which involves cost. Managers |
| "Corporate emblems are outdated, and 95.8 percent | | | | must be made aware of how recognition makes |
| of employees would rather have practical | | | | people feel through statistics and survey results, and |
| merchandise items as awards". | | | | must have a control of recognition, even if they don't |
| The reason that he points out is that employees are | | | | have a budget. This is the only short-term cost that is |
| used to these service awards and that these have | | | | and must be borne by the companies to carry out the |
| little bearing as to the impact of the awards. Secondly, | | | | recognition culture in the organization, and once |
| with the downsizing culture, employees in this era do | | | | ingrained in the company's culture, the managers and |
| not possess any corporate identity, which further yields | | | | the companies need only to harvest the fruit. Thus, |
| it insignificant. In a study, that based on the Employee | | | | concluding, recognition is a mean to set up a high |
| Needs and Wants Recognition Index (ENRI) only 4.2% | | | | performance team in addition to other methods. |
| of employees choose logo jewelry over merchandise | | | | Nevertheless, it is not a mathematical formula of |
| for awards. The second myth highlighted is | | | | calculating how much must be spend on employee |
| "Recognition programs incorporate award choices that | | | | recognition per person. This would mean recognizing |
| employees really want", wherefore, the fact is, | | | | the poor performers too, and that would reduce the |
| "According to the ENRI, 70 percent of employees | | | | impact and the excitement of the recognition program. |
| would choose something other than what they are | | | | Of course, there must be a budget set for the awards |
| offered". The third myth outlined goes as "A simple | | | | and incentives, but when it comes to the recognition, |
| change in selection or awards will substantially improve | | | | there, as has been discussed not much investment to |
| your recognition program", where the fact "To address | | | | be made. Juts make the horse understand how to |
| employees' changing attitudes, more and more | | | | carry the cart and drink the water from the well. The |
| companies are reengineering their recognition policies". | | | | rest is done automatically. However, the first part is |
| Nelson suggests that the reengineering process | | | | admittedly hard to accomplish, and that depends upon |
| actually do help companies salvage money "rather | | | | the managers' aptitude and competence. Some are |
| than spend more on recognition, while allowing them to | | | | charismatic and needs little training while some need |
| provide awards that employees really want. For | | | | not to train, as they are unchangeable. |
| example, 117 companies that re-engineered their | | | | References |
| programs during 1994 and 1995 saved an average of | | | | Nicastro, Ric. The Best Ways to Motivate And |
| 42.9 percent on their programs, and their average | | | | Reward Employees, The Need For Recognition, San |
| award cost per employee per year dropped from | | | | Diego Business Journal, reprinted in 2002 |
| $17.66 before reengineering to $9.21 afterwards". The | | | | Nelson, Bob. Consultant Dispels Myths About Award |
| fourth myth is "Companies should reduce or eliminate | | | | Programs, 2001 Rewarding Employees Smarter. New |
| years of service awards", where as the fact is | | | | Employee Recognition Ideas From Bill Sims! Reprinted |
| "Companies should not cut programs at random. | | | | with Permission from Bob Nelson, author of the Best |
| Instead, they need to make all recognition programs | | | | Selling Book "1001 Ways to Reward Employees". |
| more effective by aligning them with shifting employee | | | | Topic: RECOGNIZE YEARS OF SERVICE, DON'T |
| attitudes and updating them annually". Nelson asserts | | | | REWARD |
| that the companies must first "identify which types of | | | | Kovach, Professor Kenneth. Employee Relations |
| awards are most appropriate in your present | | | | Today, 1995 |
| corporate culture. Employees may like the types or | | | | Clark, Evelyn. Retain Employees through |
| recognition your program offers. Their dissatisfaction | | | | Recognition--Tell Their Stories! |
| may lie in the awards they are offered". | | | | Ellender, David E. Employee Benefits: Asset or |
| Today, majority of the employee service programs | | | | Expense? 2000 |
| involve giving an employee logo jewelry with a | | | | Saxby, David. Employee Recognition Can Make a |
| "jewelling sequence" for their consequential years of | | | | Difference. |
| service in the organization. In spite of the fact that the | | | | Hiam, Alex. Employee Recognition: Why It Matters. |
| cost of such programs can cost millions of dollars, | | | | Rewarding employees for a job well-done will do |
| unluckily, there are some deadly flaws regarding their | | | | wonders for their performance--and your bottom line, |
| effectiveness. For instance, oftentimes an employee's | | | | 2002 |
| anniversary date goes overlooked, though in the | | | | Handel, Jeremy. Employee Recognition Programs |
| employee's mind the specific anniversary date is | | | | Increasing Despite Softer Economy, Oct. 29, 2002. |
| important. The faults in the recognition programs can | | | | Emery, Gail Repsher. EMPLOYEES: Show Me the |
| be eliminated thereby reducing the company's cost | | | | Recognition, Vol. 15 No. 14, 2000 "Empowering |
| and increasing the effectiveness of the employee | | | | Excellence Through Recognition" NAER Regional |
| recognition programs standardizing the activity of | | | | Conference Summary, Seattle, WA September 20, |
| recognizing each employee's anniversary, while | | | | 2002 |
| consequently letting increased pliancy of choice on the | | | | Nelson, Bob. |
| part of the employee of items of similar value. "Each | | | | |