How to Create a Recognition Strategy – Part 1 of 4

Of key importance to recognition programs is having a recognition strategy, a written statement of an organization’s philosophy and purpose for recognition, along with a strategic plan for integrating recognition practices and programs for reinforcing and supporting an organization’s business and people strategies as well as the organizational culture.

This four-part post will show the importance of the recognition strategy and how to create one, including how to develop and implement an effective recognition plan.

The Importance of a Recognition Strategy

Before discussing recognition strategies, it is helpful to first consider recognition itself. Recognition plays a critical role in organizations because it is a strong driver of employee engagement, an important lever for obtaining higher performance, and a good tool for maintaining employee retention.

From an engagement perspective the 2011 BlessingWhite “Employee Engagement Report” stated a key factor for contribution to performance is “regular, specific feedback about how I am doing” as one of seven engagement drivers¹. Another study on “The Impact of Rewards Programs on Employee Engagement” showed intangible rewards had a greater impact on employee engagement than financial rewards². It is interesting to note that since the 2008 economic downturn 23 percent of surveyed companies have increased their use of recognition programs³. Finally, keeping retention in mind, a Salary.com Employee Satisfaction & Retention Survey 2007/2008 reported 17% of employees leave a job due to insufficient recognition⁴. It is critical to get recognition right.

Recognition and reward programs are also expected to produce a Return on Investment or at least generate positive business impact. For example, a WorldatWork study found that 85 percent to 95 percent of all incentive programs reach or exceed their goals, and that the return on investment (ROI) on non-sales employee programs (200 percent) is actually greater than the ROI on sales incentives (134 percent)⁵. Another study found cash rewards can generate a 14.6 percent uplift in performance compared with no incentive, while tangible rewards produced a 38.6 percent uplift in performance compared with no incentives⁶.

In order to achieve similar results, recognition must be planned and strategized to be effective. Organizations must place higher importance on developing well-crafted recognition strategies so they can generate the desired business results and employee engagement they are looking for.

However, few organizations actually have a written recognition strategy. In its 2015 survey, Trends in Employee Recognition, WorldatWork identified just over half of its member organizations — 53 percent — have a written recognition strategy⁷. Nearly all of these organizations (97 percent), which had recognition strategies, were aligned with their business strategy, which suggests they understood the impact employee recognition practices and programs have on employees and their performance.

Recognition Professionals International (RPI), a non-profit professional association for recognition practitioners and providers, has Recognition Strategy as their first of seven best practice standards. They define a Recognition Strategy as: “The organization establishes and maintains a recognition strategy that promotes employee recognition at all organizational levels and is fully documented… Each element of the program should be focused on identifying employee behaviors that advance the organization’s goals and values, and recognizing and reinforcing these behaviors”⁸.

RPI’s seven best practice standards of excellence help companies exemplify and create consistency with recognition programs and practices across industries. RPI uses these seven standards for their annual review of nominees for “best practices” in these seven strategic categories.

Over the next four weeks, I will show you how to develop a recognition strategy and plan that can powerfully benefit your organization.

Next week: Part 2 – Crafting a Recognition Purpose and Philosophy Statement

References

1. BlessingWhite “Employee Engagement Report”, 2011 http://www.blessingwhite.com/eee__report.asp
2. A WorldatWork study on The Impact of Rewards Programs on Employee Engagement by Dr Dow Scott, Ph.D., Loyola University and Tom McMullen, Hay Group, 2010
3. Towers Watson – Looking Towards Recovery – Focusing on Talent and Rewards 2009/2010 U.S. Strategic Rewards Report
4. Salary.com “Employee Job Satisfaction & Retention Survey 2007 / 2008” https://secure.salary.com/myhr/layoutscripts/mhrl_register.asp?src=doc_download_jobsat08_insight&linkid=1&linktype=Research
5. Brendan P. Keegan, “Incentive Programs Boost Employee Morale & Productivity”, Workspan 03/02 (March 2002), pp. 30-33
6. Scott Jeffrey, “Right Answer, Wrong Questions”, SalesForceXP, September/October, 2004
7. WorldatWork “Trends in Employee Recognition”, 2015 https://www.worldatwork.org/adimLink?id=78679

Roy is no longer writing new content for this site (he has retired!), but you can subscribe to Engage2Excel’s blog as Engage2Excel will be taking Roy’s place writing about similar topics on employee recognition and retention, leadership and strategy.