Recognition program metrics are old news by the time you get them.
And that “old news” element makes these numbers from the past called lagging indicators. They are a lagging indicator because we observe these measures after, or lagging after, any change has occurred.
These lagging indicators create a conflict for you as the recognition program owner. Outcome measures from your programs are easy to measure. But you can’t do much to change them once you get them.
My recommendation is to supercharge your programs by using leading indicators as well.
Implementing the Recognition Plan for Successful Impact
Many consultants enter organizations prepared to tell the leaders where they are failing in the area of the consultant’s expertise.
The process I have taught you over our four-part treatise on How to Create a Recognition Strategy, headlined the need for you to identify your own recognition strengths and weaknesses before starting the strategy piece.
If you have followed along so far, you will know the importance of crafting a Recognition Purpose and Philosophy statements. Following your assessment of recognition practices and programs you have everything you need to design a complete Recognition Plan to elevate recognition practices and programs in your organization.
That is often where consultants exit the scene. You have a plan with goals set and tactical objectives to make things happen. But then they leave you. And often things sputter out or nothing happens at all.
If there is one thing, I think is essential with a recognition project like this, is to provide you with the tools to implement the plan. Let’s get it off the paper and into action. Focus on moving into the implementation phase.
To be successful with any recognition program, create criteria that you can measure your success by. How else will you know whether your recognition programs are achieving the results you want from them?
In our Recognition Maturity Model, we have built in four criteria that help determine where you stand with recognition across nine categories, such as leadership, culture, programs, and analytics.
Look at the following criteria to see where you think your recognition programs stack up.
Many people have clicked on a previous version of this blog post wanting to learn how they should set up a point-based reward program.
Unfortunately, some individuals and recognition and reward providers suggest certain ideas as being best practices so the client’s employees will consume more points. So, buyer beware and let’s learn some principles versus supposed best practices to guide you.
My goal is to provide you with objective information along with solid principles for you to make wise decisions by. I will also give you some pros and cons for some options.
When I assist company leaders in creating a recognition strategy, I take them through defining and crafting a purpose statement and philosophy statement as part of their strategy design.
Essentially, I am asking them to answer the question, why are you doing recognition?
WorldatWork asked the same question and received the following responses. These are the top seven of the 17 choices people had to select from.
1. Create/maintain a culture of recognition
2. Create/maintain a positive work environment
3. Reinforce desired behaviors
4. Increase employee engagement
5. Support organizational mission/values
6. Motivate high performance
7. Increase retention or decrease employee turnover
You can ask the same “why” question about giving rewards, too. Why are you giving rewards if you are combining them in a recognition and rewards program? Not enough people stop to define their reasons or purpose for giving rewards besides recognition.
One of the
questions I am often asked when it comes to rewards is what to reward people
with as well as when are you supposed to give those rewards.
It’s important
to remember that rewards can be tangible, monetary, or experiential in nature.
This opens the door to all kinds of creative options and ideas for what to give
to people or give them access to choose.
And broadly you
give rewards to individuals or teams whenever they reach pre-set goals, a
significant achievement, or a special service was performed.
Now let’s dig a
little deeper so you can better understand these elements.
I have seen
where after a poor performance on the recognition measures of a recent employee
engagement survey that the CEO tells all the leaders and managers to go out
there and give more recognition to people.
You can probably
guess why the senior leader asked them to do that. The reason was to
improve the recognition scores on the next engagement survey.
This mandate
from on high doesn’t work.
Giving more
recognition to the people you work with for the sake of the numbers is not why
you want to recognize others more.
It is not about
numbers and measuring the occurrence of recognition. It is about giving
recognition more purposefully.
We need greater accountability for the success of our incentive programs. Planning to calculate the ROI of incentive programs from the start will help us focus on results. Following the Top 10 Ways to Measure the ROI of Incentive Programs will be a handy checklist to ensure the success and ROI of your incentive programs.
1. Identify the problem you want incentivized. Assess the current performance problem to determine the needs, conduct a gap analysis, and look for potential improvements you think could be incentivized. Too many accidents, not enough sales, losing too many people, or not reaching performance targets.
2. What are the costs of the problem? Analyze the direct and indirect costs currently associated with the identified performance problem or need. Like: What are salary and operational costs for a retail store? What are turnover costs? What is the number of lost-time days due to accidents?
3. Determine the achievable objectives. Propose one or two key measurable objectives to be targeted by incentives. Example: percentage of reduced voluntary turnover; increased quarterly productivity indicators at retail stores; percentage of sales performance numbers; or, reduced number of annual accidents per year.
4. Figure out the best measures to use. Identify the specific behavioral measures you will use to determine the right program success measures. When you define the performance well enough you will know the behaviors you want more or less of. You’ll then know if the behaviors occur or not and how to measure them.
5. Calculate the costs of incentives. Project the overall costs associated with conducting an incentive plan to improve the performance problem. Determine the value of incentives, the frequency or number of behaviors required for an incentive, the time period of the incentive plan, and multiply to determine total costs.
6. Keep tabs on budget spend. Monitor the costs associated with producing the improved performance results along with implementing the incentive plan. ROI is about return on investment of monies spent, which includes administration costs, monitoring, data collecting, and analysis.
7. Gather the data you need. Collect baseline data of target performance results from the period before the incentive plan began as well as during the implementation period (e.g. year before versus current year). Do as much as you can before the incentive plan so you can deal more with data following implementation.
8. Create a before and after analysis. Analyze and calculate the costs of the targeted performance problem before and after the incentive plan. Here you monetizing as much of the data as you can. Make friends with the folks in finance to help you put a dollar figure on as many data points as is possible.
9. Consider reasons for the success, or not. Give a general interpretation of the results observed of performance outcomes achieved while using incentives. This is putting the human observation and deductive reasoning as to whether things worked or not. Your hypothesis can then be validated by the data collected.
10. Work out the ROI. Calculate the actual return on investment. The math is easy: It’s the estimated dollar amount of the impact made by the incentive plan minus the combination of the annual incentive payout costs plus administration costs, then divide the previous total by the impact dollar amount, and finally multiplied by 100. Previously published in Incentive Magazine
Previously published in Incentive Magazine
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.
How are your career milestone or service award programs doing these days?
It seems the majority of organizations have tenure or long service award programs. According to WorldatWork’s 2017 Trends in Employee Recognition, length of service recognition remains the top ranked recognition program with 85 percent of organizations.
Historically, and especially within the public sector, career milestone years were only acknowledged when an employee reached 25 years or longer. Today, most progressive organizations commence with at least 5 years and then celebrate every 5-year increment thereafter.
But when you look at the US Bureau of Labor Statistics the average tenure for salaried employees is 4.2 years. That average drops to 2.8 years for the mobile 25 to 34 year old employees.
“Great managers don’t need to be reminded of the power of praise.”
I think he’s right.
In those organizations where recognition flourishes as a way of doing things, you will always find leaders who get it. They know the importance of recognition. They personally strive to practice giving effective and meaningful recognition. And they encourage everyone to be exemplary recognition givers. (more…)
