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Powering Up Your Organization Through Employee Recognition

Posted on 03 Jun 09

The more employees are recognized for their contributions in an organization, the more they become engaged and provide added value in today’s competitive environment. However obvious this may be, senior executives are constantly looking for ways to generate more power through their people — to accelerate performance with more effective people programs for their organization. One way, according to a new white paper series from Towers Perrin, is manager-delivered recognition of employee performance.

The first part of the Tower Perrin white paper demonstrates that manager recognition of employee performance can increase engagement levels by a surprising amount. According to the 2008 Global Recognition Study that Tower Perrin conducted for O.C. Tanner, a major provider of appreciation awards, training and consulting, recognizing employee performance can lift engagement scores anywhere from 20% to 60%, depending on the strength and effectiveness of the program (see exhibit above).

The research determined that effective recognition from managers has three basic requirements:

• Inclusiveness
• Communication
• Trust

The most obvious deficiencies appear in the inclusiveness category — failure to recognize employee performance often enough and ensure that opportunities for recognition are sufficiently available throughout the organization. Managers improve a bit when it comes to communication. The scores for reciprocal trust are alarmingly low, with more than 40% of respondents in the recognition survey giving neutral or negative responses regarding their trust of supervisors.

The second part of the Tower Perrin white paper describes what steps companies can take to make their recognition programs more effective in all three areas. Some of these steps are common sense, but they all have to be followed, and they all are important:

Inclusiveness. Here, managers need to ensure wide availability of recognition opportunities, which in turn requires following a specific set of requirements that assure fairness. It’s especially important not to play favorites — a consistent concern of employees.

Communication. It's not enough just to keep the information flowing. You have to be unambiguous and make the connection between performance and rewards of all types. This requires communicating openly with employees and encouraging new ideas. Fostering a sense of reciprocity and employee self-determination is key.

Trust. The Tower Perrin analysis of the O.C. Tanner 2008 Global Recognition Study showed that trust in the manager goes up when the manager engages in personal, candid conversations with the employee, defines clear and relevant performance targets, and holds people accountable for the results.

The Psychology of Employee Recognition

The findings of Tower Perrin are consistent with psychological research about the behavior and attitudes of people at work. Recognition, engagement and performance form a self-reinforcing system. Employers that understand these linkages, and how to take advantage of them with strong, effective recognition programs, can turbo-charge their organizations and see a measurable improvement in results.