Ask Christi: The Importance of Recognition
November 19, 2008
Incentive problems on your mind? Incentive online columnist and recognition expert Christi L. Gibson has the answers.
By Christi L. Gibson
Dear Christi:
I've been trying to build a case for maintaining and strengthening our organization's employee recognition programs. If I had to a chance to speak directly with my company's C-level executives today, I don’t know what I would say. I know I'm intimidated by the fact that the economy is in the ditch and most are just trying to dig their way out, but isn't that when you need a strong recognition program? I believe the stress levels in our workplace will go through the roof. What do you suggest?
Louise—Milwaukee, WI
Dear Louise:
You are completely correct. When recognition programs are dropped the only thing that will increase is stress. To help you build your case for maintaining and strengthening your organization's employee recognition programs, I would suggest you present documentation of your recognition program achievements that demonstrate the outcomes.
Recognition professionals must align their recognition programs to their organization's business goals and initiatives. By doing this, executives will see their objectives being accomplished. Metrics need to be developed and shared regularly with executives that show the tie of return on investment to specific recognition initiatives. With solid figures in hand showing your recognition programs are meeting business objectives, these programs are less likely to be reduced or eliminated. Executives will see the link between employee satisfaction, customer satisfaction and stockholder value. The most fortunate organizations are those that have managers and executives at all levels who appreciate the value that employee recognition and employee engagement brings to the table. Once this is realized you will see one of the greatest benefits in that part of your employee’s recognition now comes from being proud to work for your company.
Dear Christi:
I'm sure there are studies that have been done showing the importance of employees and recognition, but for the life of me I don't know where to look. I'm putting a presentation together can you give me some information to use?
Brant—Grand Forks, ND
Dear Brant:
An organization's greatest asset is their body of employees. Forum for PPMM cites that 85 percent of a company's assets are their employees, their institutional knowledge and talent and the company's reputation. Employee worth is also a common thread found in a PNC Bank Corp. survey. According to PNC Bank Corp., knowledgeable and attentive employees account for 80 percent of the reasons customers are satisfied. In other words, happy employees equal happy customers which equals increased revenues. If that coin is flipped, the opposite is true. The Forum Corp. reported that 70 percent of unhappy customers abandon vendors/businesses because of poor service.
In order to survive down times it is vital that an organization provide its customers with exceptional service. To attain high customer satisfaction, companies must first invest in solid employee recognition programs that reinforce and align with the organization's mission. This investment provides organizations with loyal employees motivated to deliver top quality customer service.
In past years, corporate America spent nearly $46 billion dollars each year on incentives for its employees and executives, including gift and reward cards. Last holiday season gift card sales totaled more than $26 billion, up from $17 billion in 2003. It is imperative that these incentives be linked to behaviors that produce the organization’s desired outcomes otherwise the incentives are worthless.
It bears repeating, to realize loyal, paying customers you have to have loyal, happy employees. To get and keep loyal, happy employees in these tight times it is crucial that organizations invest in their employees by providing them with a solid recognition program.
Dear Christi:
Our CEO has announced that all sales incentive luxury programs are cancelled until further notice (undoubtedly fallout from the bad PR AIG got). Instead, the CEO has suggested gift cards be given to these execs. I am concerned this complete shift in rewards from luxurious attention to plastic do-it-yourself will create dissatisfaction and ultimately resignations. Isn't there a way we can continue as before since our company is profitable and no shareholder problems. Please advise.
Marjorie—Tampa, FL
Dear Marjorie:
I have discussed this very concern with many and have received various responses. So what it comes down to is this, whether or not an organization's sales incentive luxury programs are the right thing to do is ultimately decided by that organization's shareholders, employees, board, etc. With that in mind, I would recommend you discuss with your CEO his/her thoughts leading to this decision. You may find at this time this decision is the correct way to go. Your next step is in how you present this to your employees. A gift card given to them by the CEO himself at a private lunch may have more value and meaning to your top performers than the luxury incentive. You are changing the incentive but that doesn't have to make it any less meaningful. Be creative and purposeful. Ask what your employees would value as recognition, you may be surprised.
On the flip side, there are many organizations like yours who are profitable and like you are not experiencing shareholder problems. These organizations are maintaining their existing formal recognition programs including their special events to recognize their top performers. They are continuing their annual recognition events and keeping a focus on the importance of their team members.
During this economic downturn and ever changing time, your decision must be made thoughtfully and with careful deliberation.
INCENTIVE online columnist Christi L. Gibson, the executive director of Recognition Professionals International, formerly known as National Association for Employee Recognition (NAER), has been with RPI since 2001, and has been published in newspapers and periodicals and interviewed on both ABC and FOX News. She can be reached via e-mail at Christi@recognition.org.
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