We hear and read the distressing news on a daily basis: stocks are plummeting, people are losing their jobs by the tens of thousands, and companies are looking for ways to cut costs while keeping their existing workforce engaged and motivated. A strategically executed employee recognition program supports an organization’s financial objectives, improves talent outcomes and reinforces cultural values for a low cost with a high return on investment. Human resources leaders can realize savings to the bottom line through a properly deployed strategic recognition program while simultaneously boosting morale, productivity and employee engagement.

However, the more pressing issue is that many HR leaders – and their CEOs – do not understand or effectively measure the impact of recognition programs overall. Especially in the current economic downturn, senior executives need to understand the value of recognizing and motivating employees – to both the company morale and bottom line.

We recently asked more than 150 middle- and senior-level HR and HR-related personnel about CEO perceptions of recognition programs as they relate to corporate objectives within their organization. The survey revealed HR leaders may believe their recognition programs align with company values and strategic objectives but they are not seeing bottom-line results. However, HR leaders cannot validate these concerns as the majority is not measuring results often enough or even at all.

A clear majority of HR respondents (88 percent) believe their recognition programs need improvement and that their CEO would agree.

While an encouraging 58 percent of HR leaders believe their CEO would say their recognition programs reinforce the strategy, values and appropriate behaviors of the organization, an alarming 42 percent say their programs offer no strategic benefit to their organizations, indicating a tremendous waste of resources and misappropriated recognition investment that have no effect on employee engagement and motivation.

Overall, HR leaders (45 percent) feel their programs fall short in driving bottom line results.

Not only are companies clearly not building their recognition programs to ‘CEO code’ – a program that is aligned with the organization’s strategy, mission, values and behaviors – but also a staggering 38 percent of all organizations surveyed are not measuring their program’s results in any way, leaving CEOs in the dark on the effectiveness and true value of their recognition programs.

In a time when our economy is in crisis, employee appreciation, motivation and engagement are crucial to boosting employee morale and productivity, as well as bottom-line business results.


Aligning Program Objectives with Organizational Goals

Human resources leaders need to take further steps to develop strategic recognition programs that meet the CEO’s expectations by:

• Developing training programs for managers: 48 percent of respondents said their company does not formally train managers on recognition philosophy or program specifics.

• Communicating with employees: 54 percent of respondents said their company does not have a comprehensive communication plan to raise awareness of the program, increase participation and build an appreciation culture.

• Keeping the rewards criteria simple: 62 percent of respondents don’t believe their organizations have concise and easy-to-understand recognition criteria that reflect the organization’s goals.

• Rewarding everyone consistently across the organization: 70 percent of respondents say their recognition program recognizes more than the top performers, but 55 percent don’t believe their organization has appropriate and consistent awards across business units in different countries.

• Measuring results a CEO cares about: Executives want to know how recognition drives performance and productivity as well as how well different divisions or groups understand the company values and help achieve company objectives. To positively impact these aspects, program measurement and reporting must happen far more frequently than on an annual basis.

Strategically executed recognition programs have the potential to support an organization’s financial objectives, save millions of dollars in wasted resources and outdated programs, and improve talent outcomes and reinforce cultural values for a low cost with a high return on investment. By consolidating many disparate and tactical recognition programs onto one centralized platform, business leaders realize savings to the bottom line through a properly deployed strategic recognition program while simultaneously boosting morale, productivity and employee engagement. Especially in the current economic downturn, senior executives need to understand the value of recognizing and motivating employees – to both the company morale and bottom line.

According to a 2007 study by Deloitte/The Economist Intelligence Unit, “Research indicates that while values and cultural attitudes provide a foundation for employee engagement, to drive performance and results, there must be a clear link between executable strategy and behavior. Achieving this link is a top priority, and in most cases the CEO – not HR – appears to be leading the charge.”


Strategic Recognition Best Practices

To build a successful recognition program, HR leaders need a set of best practices to formulate recognition programs that are true human capital strategic initiatives.

• Formulate a clear global strategy for recognition: Develop a philosophy of recognition that mirrors company strategic objectives and use this as the basis for a manager training program.

• Secure an executive sponsor to communicate regularly with employees: Use the global reach, influence and visibility of an executive to promote the recognition program across the company. Be sure to incorporate multiple media such as posters, videos, e-mail messages, and newsletter articles so all employees are impacted by the communication program.

• Tie recognition to the company values and strategic objectives: By linking all behaviors and actions recognized to a company value demonstrated or strategic objective achieved, employees understand how their daily actions impact the success of the organization as a whole, which gives them purpose and satisfaction in their work. This approach also clearly defines criteria for recognition that apply universally for all employees, everywhere in the world.

• Make the program available to all: By opening a recognition program to all employees via a peer-to-peer recognition model, all employees are encouraged to notice the above-and-beyond efforts of their colleagues and reward them accordingly.

• Offer a global reward of choice: Personally meaningful and, critically, culturally relevant rewards are the lynchpin of a successful global strategic recognition program. All employees deserve to have a wide range of choice available to them.

To be successful in the 21st century, recognition programs need to be strategic and in line with senior executives’ expectations, and high-ranking company officers need to buy into the goals and objectives of the program. Our research and experience working with Fortune 500 companies tells us that many senior level executives are beginning to sponsor and participate in the strategic employee recognition implementation process, but this latest research shows that much more work remains to be done.



Derek Irvine is of the vice president of global strategy for global strategic employee recognition strategist firm Globoforce. He can be reached Derek.irvine@globoforce.com.