What are the Most Important Drivers of Employee Performance?

 

10-24-21 What are the Most Important Drivers of Employee Performance?

 Recent research by the Cicero Group, a premier management consulting firm focused on implementing data-driven strategies for a broad mix of organizations across the globe, indicates that employee recognition is a driver of employee performance.

 We have seen similar research on the same subject for years, and frankly while the %’s of what the top drivers are always a little different…, the categories are much the same. 

Employee recognition is virtually always in the top third of drivers.  Why?  Because it works.  All companies seem to understand this, but their approach to how to implement these efforts differ widely from place to place.  

The Cicero research demonstrated that  one of the most effective ways to increase engagement is simply to recognize employees for their performance, in both formal and informal ways.

How to Design Effective Employee Recognition Programs

 

An employee recognition program can improve employee well-being, satisfaction, employee retention, and health. The impact of recognition can loom large over a company. 

According to 83% of HR leaders, employee recognition programs benefit organizational values, and 85% say they positively affect organizational culture. 

The challenge for companies is how to design an effective recognition program.  We deal with companies every day that tell us they are looking for ways to improve their current programs.  Many are stuck in an age-old “years of service” program that does little if anything to motivate change in the complex business climate of today. 

 When you are considering revamping your recognition program here are 5 keys to making it meaningful:

1.    Be relevant. Tie the award to specific achievement of certain objectives, either by                         individual or team.

2.     Timing is everything.  Recognition that arrives months later isn’t nearly as meaningful as recognition that is received immediately. Put systems in place to recognize employees and take advantage of the opportunity when it is presented.

3.     Recognition comes in many forms. As far as giving and receiving appreciation goes, everyone has a preference or style.  Many feel that it is best to ask the employees what they want, but a word of caution.  In over 90% of the time, the answer to this question will invariably be cash.  That may be what they say they want, but it’s not necessarily what will motivate them to incremental performance. 

4.     You don’t need to break the budget bank.  Thanking your employees for their daily efforts can motivate them just as much (and sometimes even more) as recognizing achievements.  The appreciation should also come from both managers and peers; some employees find recognition from peers to be even more motivating.

5.     Bringing it all together.  Employees appreciate the recognition that lets them know how their efforts contribute to the success of the company and their team is valued.  Employees gain a sense of security in their value to the company, motivating them to continue their great work. 

If employee recognition is important to your organization, you need to spend some time designing one that will produce results.  Unfortunately, most companies don’t take advantage of the professionals in the award industry who are available usually without charge (if you are buying their awards) to assist you in this regard. 

In difficult labor markets, hiring and retaining good employees is a constant issue.  You spend a tremendous amount of revenue on this, doesn’t it just make sense to spend a small fraction of that money on a recognition program that you measure to produce results?  With a well designed employee recognition program you can turn regular hires into game changers.

The Positive Effects of Properly Designed Employee Recognition Programs

 

Employee recognition awards have become a $46 Billion market.  In the last decade or so, employee research abounds that shows that employee recognition increases productivity, reinforces quality performance, promotes morale and builds positive relationships.  

A recent survey of employees conducted by “A Great Place to Work” found that teams scoring in the top 20% of engagement experience 59% fewer turnovers. 

However according to Gallup’s employee engagement statistics 53% of workers in the US are not engaged and up to 65% of employees haven’t received any form of recognition for good work in the last year.  It simply follows that when people aren’t appreciated for their hard work, they aren’t as inclined to continue to produce. 

Following are some thought-provoking statistics about employee recognition programs:

•  87% of company recognition programs emphasize tenure…

 While memorable recognition milestones such as 5-year, 10-year and 20-year work anniversaries are important, it is far more important to plan recognition efforts for your employees based on their results and behaviors

• Over 91% of HR professionals believe that recognition and rewards make employees more likely to stay.
•  An employee who has been recognized is 63% more likely to stay at his or her current job within the next three to six months

 Plan Your Recognition Efforts Around:

• Recognizing an employee going above and beyond to help a customer
• Providing avenues for peer recognition allowing your employees to acknowledge the efforts of their support teams
• Attract new employees
• Raise average ticket price
• Achieving short term operational goals
• Encourage developing of revenue generating or cost reduction ideas and ways to achieve them
• Drive operational excellence
• Measure training effectiveness
• Reduce order error

More Stats From Recent Surveys

•  A lack of recognition and engagement was contributing to 44% of employees changing jobs 
• Business productivity increases by 31% when employees are happy
• Recognition improves employee engagement productivity and performance by 14
• 92% of workers are more likely to repeat a specific action after receiving recognition for it.
• More than 40% of employed Americans feel that if they were recognized more often, they would put more energy into their work
• Employees mentioned that interesting work (74%) and recognition and rewards (69%) as the top factors that keep them at their current employers
• There are many ways in which you can recognize employees besides just money...in fact, 65% of employees prefer non-cash incentives.

For many years the incentive industry had a very difficult time measuring the effectiveness of employee recognition programs.  With the preponderance of employee research that give us stats as shown above, the benefits of a valued workforce are many and varied.  For one thing, appreciated employees report increased job satisfaction. That satisfaction is itself tied to increased loyalty and lower turnover — and that, of course, leads to higher overall productivity.

 

Is Giving a Gift Card Just Being Lazy?

 

A very interesting result comes from research conducted by the Journal of Experimental Social Psychology on the relationship between gift pricing and appreciate.  When researchers asked people to recall a gift they gave and then to rate how much they thought recipients liked it, higher prices went with higher ratings. But when people made the same ratings for a gift they had received, price was completely unrelated to enjoyment. 

It seems that function counts. Gifts that are actually usable are far more appreciated than those that aren’t.   Gift givers tend to focus on how pleasurable it would be to use the gift but overlook how easily or often the gift will be used.  Givers might favor the beautiful and dramatic because they think about gifts in the abstract.  Recipients, in contrast, imagine themselves using it, and so focus more on utility. 

Delayed gratification is also okay. Recipients don’t mind waiting, especially for a gift that would be more satisfying in the long term. 

 Don’t be afraid to give people what they ask for. Gift givers think that unexpectedness adds value because it shows thoughtfulness; however, recipients actually think it’s more thoughtful to give a gift that they requested. They see it as showing that the giver attended to and honored their wishes.

 Give experiences, not things. Because people are willing to wait, givers should consider research over the last decade showing that experiences lead to more long-lasting satisfaction than new possessions. A family vacation is a better bet than that diamond necklace. But givers are leery of experiences because they worry it’s more likely they’ll pick something the recipient doesn’t want. The answer is simple, give them a choice. 

When giving gifts it’s always best to set aside your own desires and try your best to anticipate what the recipient wants. Using a vast choice of gift cards is an easy way to avoid all of the above.  They truly give the recipient what they want when they want it.

 

Money Doesn’t Always Change Everything

 

According to the September 2021 issue of Sales and Marketing Management, using money as an incentive award doesn’t always change everything.  In fact, it may not change much of anything accept spending more and not achieving your goals.

For as long as we have been in the employee awards industry there has always been a blurred line between using cash and non-cash to improve performance.  To be overly simplistic, the easiest way to consider the two methods is in relation to what you are trying to accomplish.  Cash is part of the contract you use to hire and retain your employees.  It brings them to work, but it doesn’t necessarily motivate them to perform at the high level you want them to.  Non cash is more often than not used for achieving specific objectives with clear start and stop timing and sound measurement and feedback of that objective.  One of the biggest reasons that cash is also used in these kinds of programs is for ease of administration…all you have to do is just add some money to the paycheck.  Right?

Recently we had a potential client that had been using non-cash awards to reward employees but moved that budget to cash after a survey of employees found cash is what they wanted.  Frankly if you ask any employee group what they want for a reward they will universally say cash.  Unfortunately, when companies make that change, they rarely do any kind of measurement at the end of the reward program period to see if the change had any meaningful effect on the outcomes.  Worse, the extra cash in the paychecks will get lost in income and provide little if any motivational or lasting trophy value.  Over time it will just be considered as expected compensation and be very difficult stop.   You will assuredly end up spending more money on awards using cash than using non-cash.  In addition, the White Conference on Productivity showed conclusively that it took $3 in cash to produce the same results as $1 in non-cash.  Many clients tell us they wish they had never gone to cash rewards in the first place. 

Why consider using non-cash rewards as the best recognition for stellar work:

      ·       These rewards have emotional value that make them far more effective in driving                    employee loyalty

·       The perceived value of non-cash rewards tends to be significantly higher than the actual cost.

·       They make it easier for workers to celebrate each other’s success and talk about how they were rewarded.

·       Millennials and GenXers particularly appreciate non-cash rewards, especially for unique experiences.

 Your employees work hard.  Show your appreciation for their contributions and inspire them to reach goals with rewards they want.  Don’t just put another $50 in their paycheck.  It will get lost in the shuffle and you may lose the meaningful connection between the reward the performance.