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.

Drive Wellness with Consistent Recognition Awards

 

At the beginning of every year, wellness is a top resolution for many folks.  In fact, research has shown that losing weight and becoming fit are the most common resolutions made for the New Year.  

Changing to a healthy lifestyle is a behavior issue, and a tough one at that.  It’s difficult to start and even more difficult to maintain changing to a healthy lifestyle.  The gyms are full in January and February and by the end of April, back to their normal levels.  It’s natural for people to stop doing what they don’t want to do without some positive reinforcement along the way.  

As many companies have done, consider using consistent and continuous reinforcement along the way.  Minimal gift card awards are idea to promote wellness efforts and keep people involved.  The economic benefits of a long term healthy lifestyle far outweigh the small cost necessary to keep an employee motivated to achieve success. 

We have several award systems available that are easy to implement and administer.  One may be just the one for you. 

The 2021 Incentive Research Foundation Trends Report

 

The recently released 2021 Incentive Research Foundation Trends Report explores how incentive and recognition programs will need to be reimagined to motivate a changing workforce, accelerate recovery, and meet the evolving goals of post-pandemic companies.”

The top trends for incentive, reward, and recognition programs in 2021 include:

Increase in Individual Rewards: In 2020, incentives professionals had a unique opportunity to re-examine the value of individual rewards. Merchandise, points, gift cards, and individual travel rewards proved to be powerful motivators and this trend will continue into 2021.

Large Group Events Deferred – But Still a Priority: Organizations continue to value incentive travel award programs, and many are committed to resuming large group events, despite a series of delays in 2020 and into 2021.

Moving the Middle: Merchandise and gift cards proved to be effective motivators to broader audiences during the pandemic. Looking ahead, smaller reward amounts can be used to “move the middle” 60% of producers and raise the overall performance of the organization.

Personalization & Choice Increase Impact of Reward: Program owners are developing innovative ways to include personalization throughout their programs in order to make a lasting impression on program participants. Increased reward choice, curated selection, and rewards that align with the organization’s culture have maximum impact.

Contracting & Contingency Planning Are More Important Than Ever: The need for planning for disruptions took top priority as a result of the COVID-19 pandemic. Whether designing a large-scale incentive travel program or a local experiential reward, contracts need to be carefully reviewed and contingency plans expanded to anticipate new and evolving disruptions.

Digital Delivery & Virtual Engagement: Many segments of workforce accelerated the move to working virtually during the pandemic, and many people will likely continue to work remotely in 2021 and beyond. Many lessons were learned about the power of virtual engagement and digital delivery of rewards – and their limitations. Incorporating these lessons into communications strategies can help drive program adoption and success.

 

A Refresher on Employee Recognition

It’s always good to refresh yourself on some of the fine points that could give your employee recognition program a spark.  Most of you have seen these tips before, but as with anything worth doing, it’s nice to think about what is currently working and what you can do to make it better. 

Actually at times, it could be more effective to just forget about the formal program and just follow these tips.  When you do it's easy to give the recognition your employees deserve:

See every employee as an individual

Every employee responds differently to recognition. Many appreciate public praise. Others shrink from the limelight. Don't pass out praise on your terms; recognize each employee in the way that produces the greatest impact for that person.

Assume too soon is never soon enough

There's an inverse relationship between recognition and performance: The longer you wait, the lower the impact. Praise employees immediately. Don't wait for "the right time," because the only right time is right now.

Provide details that show you know

Generic praise is nice, but specific praise is wonderful. Don't just tell employees they did a good job. Tell them how they did a good job. Not only will they appreciate the recognition, they'll also know you pay attention to what they do.

Be genuine

We've all received recognition that felt forced, like the boss who walks around once a month and says, "Thanks for your efforts." Only recognize hard work and achievement when you mean it.

Skip constructive criticism, at least for now

Say, "You did a great job, but next time..." and all the employee remembers is what they did wrong or could have done better. Follow up at another time with constructive feedback. Let the warm glow of praise be the feeling the employee carries with them.

Actively find employees to praise

We're all trained to spot issues, hunt down problems, and eliminate errors. We're usually not trained to find people doing things well. Spend part of every day looking for positives. (You might be surprised by how skilled your employees really are.)

Leverage the surprise factor

Unexpected recognition is incredibly powerful. Winning the employee of the month award is great, but being recognized in the middle of a meeting for outstanding achievement can feel even better.

Spot opportunities to share the "praise wealth"

It's easy to recognize your great employees. They're great because they perform well. Look for ways to praise less stellar performers when they deserve the recognition. Sometimes all an average performer needs is a little attention and encouragement.

And keep in mind providing praise will get easier over time, because when you do a better job of recognizing employees they naturally perform better - and that gives you even more achievements to recognize.

The Importance of Incentives and Recognition on Workplace Performance in a Tight Labor Market

Research from TLNT shows some interesting facts about the role of incentives, rewards and recognition in companies today.  Following are some key points from that research: 

• While 93% of organizations are aligning their rewards programs with organizational goals, only a third of them say performance or productivity motivation is a primary goal.

• 71% of organizations say the objective of their programs is to increase employee engagement.

 • 45% of companies see IRR programs as strategic, training managers on how to use them, encouraging and monitoring their usage.

• Non-cash incentives are taking on an ever greater importance. In 1996 24% of organizations reported using non-cash incentives. In 2016, 84% were.

 • The effectiveness of cash-based annual incentive plans is questionable. 42% of companies see them as effective; 36% are undecided.

• 37% of HR professions say that non cash incentives in the form of recognition awards, gift cards, etc. have a greater impact on engagement, while less than a third say that about cash.

Recognize Employees at More All Levels of Performance

Superstars will always be superstars.  That’s what they do, that’s what they have done, and that’s what they will continue to do.  And your superstars will always be the ones who get the recognition, who get the awards, who get the promotions.  And frankly that’s as it should be.

But we keep hearing from managers and employees alike, that there’s a whole group of just regular performers out there who rarely if ever get any of recognition or appreciation at work.  We see that all the time in employee surveys that say that lack of recognition and appreciation are top reasons why people leave their company and search for a new career.

It’s unfortunate, but while managers know this exists they are either reluctant or uncommitted to find a way to recognize performance at all levels.  It’s easy to reward someone who hit the cover off the ball, but what do you do with the consistent faithful workers who are there day after day just doing their job?  They probably represent the middle 70-80% of your workforce that is called just “regular” employees.  They are the hard working people you can’t do without.  They are the ones who quietly slip out the back door for another company who will respect them more than you do.  They are the backbone of your company.

Unlike superstars, there might not be any standout performance or above and beyond behaviors in this group, but we all know that nothing would get done without them.  And it’s precisely because they don’t produce standout exceptional work that they are ignored, and if you are implementing a recognition program based on the above and beyond, these will never be winners.

Do you know what it’s like to go through you work life and not be recognized? 

In any well planned recognition system you must be careful to not just recognize the superstars.  A great way to accomplish that is to apportion some of your recognition budget for a peer to peer program and let your employees recognize themselves.  You may be surprised who they find to reward, and as easily surprised at the reasons for the award. 

The United States has a long and proud history of our men and women in the military.  Did you know that the vast majority of the recipients of the Medal of Honor were not the standouts, not the he superstars, not the leading officers of their time?  They came from the “regular army, navy air force and marines.”  They were just the middle of the pack that did extraordinary things at extraordinary times.  We often term the majority of our employees as “regulars.”  Is it time to see them in a different light?

These are the people who are trained and focused on doing the right thing and they do it day in and day out.  These truly deserve your appreciation.  Don’t forget them when you plan your next recognition campaign. 

Is Making a Years of Service Award Tax Deductible a License to Steal?

In 2017 the top 1 percent of taxpayers paid a 27.1 percent individual Federal income tax rate, which is more than six times higher than taxpayers in the bottom 50 percent (3.6 percent).  Many on the bottom 50% paid no income tax.

The vast majority of the rank and file employees in business today are, on average, in the bottom 50%. If they pay any Federal income taxes at all in all likelihood it will be less than 10%,  probably closer to the 3.6%.  

Without getting into the weeds on the rules for taxation of employee awards, $400 of awards you give to your employees for years of service is not taxable, but only if it's merchandise, or tangible personal property.  Gift cards are taxable just like you are giving them cash.

Not a week goes by that I don't discuss using gift cards for years of service programs, and not a week goes by that I don't have a client say they can't because the merchandise is not taxable, but gift cards are.  And that's true, and it's also true that you will spend $400 for the merchandise award (and more if shipping and taxes are not included) as well as $400 for the gift card net.  So your budget is the same.  And frankly there are many clients who don't want to rock the boats of their tax department to try to use gift cards, even if they are a much better value for their employees.

This simplistic comparison certainly assumes that the merchandise you pay $400 for has the same value as the $400 you spend on the gift card.  They're both $400...Right?  But this comparison without a doubt also assumes they are the same real value to the employee.  That is certainly and completely not true!

For decades, years of service award companies have been using the ploy of “their awards are not taxable” to load their selections with such high priced merchandise that actual comparisons show are almost always priced higher than retail…sometimes as much as double retail.  For those suppliers the "it's not taxable ploy" is a license to steal.  Is using taxation as the reason to not give your employees the best value the right thing for them?  Shouldn't this be what it's all about, recognizing them for their performance over the years with something meaningful?  Is giving them a $400 item that they see online for $250 meaningful to them?

Don't Kid Yourself...Your Employees Know the Truth

In the age of online shopping where comparing merchandise is a way of life, determining the value of these awards is easy.  We all shop that way every day, and we're always looking for the best value. When the employee learns that you paid $400 for the item, rest assured  they will go online to find out what it's really worth. That’s the main reason many employees ask for gift cards in the first place.  

So How to Use Gift Cards

We have many clients who use gift cards for years of service programs.  They are much simpler to use, all of our gift card systems are suitable for these programs.  Some clients decide to pay for the taxes themselves, but many others just add the amount of the gift cards they give to the employees W-2 at the end of the year, and the employee is subject to the tax on that $400.  But as mentioned about, many aren't even paying Federal Income Tax and if they are it is usually less than 10% and more likely below 4%.  Using our $400 as an example, it the merchandise item shows a real value through comparison of only $250 online, what do you think the employee would prefer?  Getting a $400 gift card, paying the $12-$40 in taxes, purchasing the $250 item online and the having $100+remaining would be our bet.

That would seem to be a easy decision to us.

And by the way, in the last research completed by the incentive industry, shows the usage of gift cards in years of service programs is approaching 50%.  Now we know why!

Finally most clients don't have the time to do the comparisons necessary to make an informed decision on using gift cards.  But we do, we have done many of them, and will gladly do one for you if you'd like.  Just let us know.  It won't cost your budget any more, but it will guarantee that the majority of that budget gets into the hands of your employees, not those high priced merchandise suppliers.

Citizenship at Work

Citizenship matters; it can transform countries, states, and local communities.  It can also transform your company. 

Organizational behaviorists have been studying citizenship at work since the late 1970s. The evidence uncovered strongly suggests that when employees choose to be good citizens at work, it makes a difference in having a positive culture.

To determine if you have a culture of good citizenship at work, you might want to seek answers to what extent you think that your employees do these things?

·       Do your employees often ask “How can I help?” 

·       Are they willing to share expertise, knowledge, and information to help improve the effectiveness of others on my team?

·       Do they always try to lend a helping hand to those people on their team that need it?

·       Do they try to resolve unconstructive interpersonal conflicts with their coworkers?

·       Do they touch base with other team members before taking actions that might affect them?

In many respects, having good citizenship at work is about the same as following the principle of the golden rule…

“Do unto others as you would have them do unto you.”

When you have good citizenship at work it helps to create a sustainable competitive advantage. When aggregated over time and people, citizenship adds up and helps your organizations become more effective. Studies have shown that across a variety of indicators, organizational citizenship accounted for anywhere from 18 to 38 percent of the variance in performance outcomes.

It starts at the top.  When our leaders help us, they help themselves by encouraging a work environment where the “helping virus” can thrive.  When leadership treats us with courtesy, dignity, and respect, we feel positive at work, and good mood moves people of all personality types to be better citizens.

There’s been a lot written recently about “fairness” in companies.  Sometimes

the hardest thing to do as a citizen is to be fair to people that aren’t fair to you, care about people that don’t care about me, and help people that have thrown you under the bus.  But if you ever hope to have a truly successful company you first have to choose to be good citizens.

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

Study Highlights Opportunities in Employee Recognition Programs

According to a study conducted by Maritiz Motivation Solutions Employee recognition programs are effective -- but many miss out on opportunities to be even more effective.

Based on an online survey of 117 companies with more than 1,000 employees, the "Culture Next Employee Engagement and Benchmarking Study" found a majority of companies (80 percent) believe their employee recognition programs are at least "moderately effective" in driving employee engagement, and nearly a quarter (22 percent) believe their programs are "very effective."

Here are a few facts uncovered by the survey:

• Seventy-eight percent of companies have a documented employee engagement strategy

• Sixty percent of companies fund at least four to six different types of recognition programs, the most common types being service anniversary, above-and-beyond performance, and employee referral programs

• More than half of companies offer formal manager training on how to use recognition programs effectively

• Sixty percent share recognition-related communications at least monthly

Communication has always been at the heart of a successful recognition program.  Your employees want to know what’s going on, how they can earn more recognition and what the program is doing for the organization.

Those surveyed in the “very effective” category:

·       communicate about recognition daily or weekly

·       offer more program training

·       have higher budgets, devoting 0.76% more of total payroll than average companies

Most of the companies said that budget is the "greatest inhibitor to success," while those in the "very effective" category cited manager participation as well.

To make your recognition program more successful then, you need to have a strategy, a documented plan, a way to measure success and sufficient budget to motivate, frequent communications and effective manager training.

Lastly, have a technology platform or social engagement component or you are missing an enormous opportunity to connect with millennials and Gen Z, who will be the workforce majority in the next few years.

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

Reward Items of No Value Get Thrown Away

This Delbert cartoon Adams raises a very appropriate discussion regarding employee recognition awards.  It is a debate that has been going on for years and years, and no doubt will continue for years and years.   

Why?  Because if you were to draw a straight line continuum to depict the awards industry, advertising specialty items would be on one end of the spectrum and strategic full service employee incentive and recognition programs that included research, training, communications, feedback, awards and analysis would be at the other.

The debate arises anywhere along that line where the advertising specialist sales folks think they carry the type of products that are appropriate as awards.  And they could be right, some of their items could be appropriate.  But unfortunately most don’t, and actually if you prefer to give your award winner a choice of what they can receive, many would choose another award.  But often clients don’t really want to give a choice.  They’ve chosen the item because it fits their need to communicate something; the theme, the company, the outcomes, the goals etc. 

So, when considering awards for your incentive or recognition program, think about this cartoon.  Will the items you choose eventually be thrown away and considered as something with little or no value?  Will they be relegated to the bottom desk drawer or the closet?  What are you trying to accomplish; motivate increased performance or simply communicate something. 

When your award backfires and your employees see relatively little value in it, it can do more harm than good.  Remember, the award categories termed advertising specialties do just that.  They advertise something. 

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

What Happens When Incentive Program Design Fails?

There are legions of stories in the incentive industry of programs gone bad, some very bad, some that destroyed careers, fiscal years, channel reputations or even lives.  Many did not achieve the objectives outlined or over achieved them and budgets skyrocketed out of control. Still others were just embarrassing like using alcohol to motivate salespeople (some of whom were recovering alcoholics) or sweets to diabetics…you get the point.

Recent research conducted by the Incentive Research Foundation found that while the two thirds of the companies used outside suppliers for awards, less than half looked to suppliers for expertise in the best ways to recognize or motivate participants.  Why?

You can’t learn incentives in college like marketing or communications, or advertising.  It’s not taught.  Yet it is a subject that uses upwards of $100 billion in corporate budgets annually in all its forms.  A great incentive/motivation program requires the combination of sound research, skill training, dynamic communications, a complete award offering the information technology to run it and professional analytics to tweek it and make it effective. 

If you interested in how incentive have gone wrong, Google “Incentives and the BBC”, or Lehman Brothers, or Well Fargo, or the teachers union in Atlanta about the “No Child Left Behind Act.”  Certainly all of these programs started with good intentions, but good intentions don’t make up for poor design planning. 

Most companies have marketing communications departments, but when they want to undertake a multi-million dollar corporate change they look to outside Marcom’s or their own advertising company to lend a hand. But when it comes to incentives the majority of companies think they can do it themselves.  But when you do remember that there are many things that can go wrong, not the least of which is a program that spends lots of money and doesn’t achieve results.  Basedon our experience that happens up to 50% of the time. 

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

What Motivates Best in the Workplace?

For years we have followed LinkedIn discussions from a variety of groups such as the Harvard Business Review, HR Professionals Worldwide and LinkedIn HR.  There are a tremendous number of knowledgeable HR professionals on these sites and subjects and discussion topics that can keep you involved for hours. 

“What Motivates Best in the Workplace” is a topic from a while back that brought responses from HR professionals from literally from every corner of the world.  We often see the employee engagement we deal with on a daily basis as particular only to our own culture, but they are not.  Everyone has to deal with them to one degree or another.  What is interesting is that there is a lot of commonality in the answers, regardless of the cultures. 

The topic question above added some subtext to it to stimulate the responses.  This subtext included:  “Is it money, personal ambition, team, leadership, all of the above? When faced with a demotivated workforce, what common thing among people consistently brings out the best in us all?”

If you would like to read the string of responses from places like Saudi Arabia or India, please click here.  We think you will find it interesting

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

Combining Human Drives for Better Reward Programs

In their book “Driven: How Human Nature Shapes Our Choices,” Harvard Business School professors Paul Lawrence and Nitin Nohria laid out a new theory on human behavior. The idea: we are all influenced and guided by four drives: acquiring, bonding, learning, and defending. Recent research by the Incentive Research Federations on the neuroscience of behavior economics discusses these drives and their significance to current reward and incentive planners.

Nohria and Lawrence found that the drives act as motivational “hot buttons” and when pressed individually motivation can rise marginally…but when combined motivation can grow exponentially causing large impacts to engagement, retention and commitment.   The IRF research essentially concludes that reward and recognition systems can provide companies with a powerful tool because this single intervention can activate these four drives.  Let’s examine each drive in relation to a reward and recognition program:

Drive to Acquire

Employees are driven to acquire tangible goods, intangible skills and status.  Reward systems are driven by goal setting which requires clear and defined consequences for achieving them.  They train managers to recognize positive work performance aligned to the behaviors they are trying to achieve.

Drive to Bond

Employees desire to have authentic relationships with other employees. Companies want employees to work in partnership to solve difficult problems.  When organizations provide rewards for group achievement they are working in tandem with the drive to bond.

Drive to Innovate

It’s natural for employees to want to learn more about their company as well as the world around them.  They can use the knowledge to create new thoughts, systems, processes, relationships and goods based on what they learn. Organizations can add time to their recognition efforts to allow employees to learn and formulate ideas, awarding them for those ideas that are implemented.

Drive to Defend

Employees want to be safe and secure and they will defend the objects, people and ideas they hold dear.  Companies want to minimize the activation of this drive and the negativity that comes along with it.  They can use the communication channels associated with reward and recognition systems to remind employees often of their importance to the companies mission. 

In summary the IRF research maintains that…

“In a single instance of giving an employee a reward or recognition, the organization allows an employee to acquire status (and potentially good or services), to bond with their team or the person giving the recognition, to more deeply comprehend what is important to the organization, and to defend the very deeply held belief that he or she is good at what they do and has chosen the right organization for employment.

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net