In a recent newsletter, World at Work, the Total Rewards Association, discussed some interesting results of a national survey of employer views on the use of employee health incentives.  The research was conducted by the Midwest Business Group on Health in April of 2013.  Highlights of the findings are as follows:

• 82% of the companies had some form of incentives or disincentive s in place
• There is a growing interest in outcomes-based incentives (achieving targeted biometric goals)
• Most employers determined that incentives were necessary to get employees to participate

“Our national survey found over 80% of responding employers are using some form of incentives, with 41% using or planning to use outcomes-based incentive to increase engagement and participation in employer-sponsored programs.”  Larry Bores President MBGH

• 13% of employers responded that they are currently using outcome-based incentives, 28% are planning to launch them over the next two years and 40% indicated they were studying the issue.
• Of those currently implementing programs, 54% tie incentives to both outcomes-based measures as well as incremental improvement to the outcomes
• 94% of employers used onsite screening to capture biometrics and that employee feedback was overwhelmingly positive
• Of the 18% who did not use incentives, 53% reported it was because it was not a part of their culture, and 47% were not sure it worked.
• The main incentive awards used were reduced premiums at 62%, gift cards at 38% and some type of program merchandise at 35%.
• Employers using disincentives increased the employee share of premium for non-compliance and 14% have higher plan deductibles or out of pocket fees.
• The most incented activities were biometric screenings at 70% and risk assessments at 78%
• The greatest disincentive at 78% was for tobacco use
• 71% of the employers said their incentive programs were very successful and 45% the disincentive strategy was “very successful” or “successful.”

According to research conducted by Gallop consultants Megha Oberoi and Paresh Rajgarhia …

“A company might have a world-class performance management system in place, but the system is only as effective as the managers who implement it.”

The research received data from 50,000 employees in 10 major industries and found that while effective recognition programs are key to a successful organization, there also needs to be solid relationships between managers and their direct reports to make those systems work.

The correlation of scores for the “best” manager showed a corresponding high rating for the recognition system.  In companies where employees rated the systems as “poor”, the managers were also rated as “poor.”  The conclusion of the researchers was simply that poor management and poor programs went hand in hand.  In only 2% of those companies whose managers ranked “below average” did they find that systems were “very good.”

The research also highlighted four key attributes of strong managers:

• They clearly communicated performance standards and expectations for strong performance.
• They emphasized employee strengths rather than weaknesses.
• They worked to get subordinates to understand that the performance management system was    designed to aid in worker’s skill development, not just to help determine promotions.
• They communicated frequently with their team members on performance expectations, instead of just during annual reviews.

The incentive and awards industry has known for years that front line and mid-level management, those that implement the program, are critical to the program’s success. It is clear that a good system is important, but the human element is more important.  This was clearly shown in this research when the consultants said:

“Companies that want to increase organizational and employee performance and productivity should invest in getting the right managers in place and support them in engaging their employees.” 

For a complete summary of this research by Megha Oberoi and Paresh Rajgarhia, please click here.

A recent article in Incentive Magazine brings together interesting viewpoints from the social sciences and behavioral economics.  While there are many principles from the sciences that effect motivation and rewards, these ten are good ones to remember when you are planning your employee recognition systems.

1. Reciprocity


Simply, it’s the law of give and take.  Employees may perform well when recognition is provided to them.

2. Conformity

When your employees see your best people being recognized, they want to emulate them and be rewarded themselves.  Doing this publically always has an impact on the non-recipients.

3. Messaging

Positive feedback takes on a special meaning in your communications to all employees.

4. Validation

Recognition validates the employee’s performance and places a value on their contributions.

5. Justification 


Employees will work harder for non-cash awards, and can easily justify having them vs. getting money to buy essentials.

6. Transferability

Employees can always exchange or transfer awards to others, but the recognition is non-transferable and becomes part of their emotional and psychological bank account.

7. Social Utility 

Non-cash rewards will be experiences that people will want to talk about.  Nobody talks about their income.

8. Separability


Cash awards are lumped in with compensation and considered as such.  Non-monetary awards contain emotional value and memorability.

9. Expectations


Recognition is usually unexpected and is always a surprise expression of acknowledgment.  Understand the differences between recognition and rewards.

10. Equity

Your employees are motivated by fairness.  Be sure to establish the rules of your program so it is equitable to all concerned.

Click here to read the complete article on the Top Ten Scientific Principles to Apply to Rewards and Recognition.

All through the recession there were many who warned that one day when the economy got better that retaining good employees would be a problem.  That’s why employee engagement has been such a hot topic.  It’s high up on the “To Do” list of every HR executive in the country, and will most likely remain there.

But at this stage is it a case of too little too late?  Have the cuts and downsizing caused by the recession caused such angst in the ranks that turnover is already with us in a big way?  If so what is around the corner?

While the mediocre recovery may have hidden some turnover problems to date, it hasn’t now.  According to a recently released survey from OI Partners turnover was at 30% in 2012, and is tracking at 51% or more in 2013!  And the turnover this year is crossing all levels of the organization.  The breakout showed 51% front-line workers, high potential employees at 34%, senior executives at 29% and middle managers at 27%.  Will the turnover become even greater due to a better job market?  What would your organization be like if these figures happened to you?

The two main problems caused by turnover are a loss of business and decreased worker productivity.  These became a fact of life the last time the country came out of a recession.  So, managing turnover and recruiting the right talent are high on the HR priority list.  More companies are working hard to show workers how valued they are.  If retention is a problem while we still have a high unemployment rate (real unemployment upwards of 10%), it will only get worse.

According to the survey, coaching with middle management and high potential employees is considered the top method to attack turnover.  OI’s chairman, Patricia Prosser related that “providing coaching to employees in how to become better managers is as important a signal of investing in their career development as are salary and benefit increases.”  From coaching the natural progression is to measurement and feedback of performance followed closely by significant recognition, both with and without rewards.

Turnover is a fact of life.  Managing it with the right tools can help you get through this business phase and come out of it successfully.

It’s hard (impossible?) to argue that Google has done most things right.  Don’t you wish you were among the first few hundred employees they had in the beginning years and had the stock options they received?  We don’t know the stats, but you’ve got to figure that the Silicon Valley has produced more millionaires per square mile than anywhere in the universe, well maybe with the exception of Wall Street, but isn’t that about the same thing?

The fundamental obsession that made Google successful and keeps them successful is analyzing data. They use it for every decision they make.  It even has a big function in the HR department called People Analytics.  Recently they used the analytics within HR to makes its incentives and recognition programs more meaningful.  Unlike many companies that plan employee recognition programs, Google shuns benchmarking and best practices and prefers to do their own data gathering and analytics instead.  In addition they examine external research to assure they are on solid footing and make sure they don’t duplicate work that has already been done.

According to Kathryn Dekas, people analytics manager at Google…

 “Focusing on the users is a big tenet for Google.  Within HR are users are our Googlers and we want to provide them with the most unique experience.” 

The new system that they created to recognize and reward employees was done in house and has been, or will shortly be rolled out to all employees.  Interesting to note that that this system was done in house and was not typical points based delivery system.  This allowed them to control the award delivery and give their people what they wanted, based of course on the analytics!

We would encourage any company thinking of implementing or redesigning their employee award efforts to mine some of their own data, and not just purchase some off the shelf points based system that may or may not provide the type of motivation that your people really want.

Ok, it is pedestrian to say to anyone reading this post that employees who feel recognized and cared about produce more and better work.  We all know that. 

And, we know that almost all of you practice employee recognition in your workplace.   

But, we also know that not all of you use this one simple practice that can add to the success of your recognition efforts: 

Put it in writing! 

Not just notes to make the recognition presentation or to send the info to management, but put it in a formal letter or memo, even suitable for framing.  Send the letter to all appropriate levels of management, make sure one goes into the personnel file for the individual and then last, but not least, attach a handwritten note and send a copy home for the family to see. 

Simple, easy, cheap, and more than effective!

Ever had a job that you thought was really meaningless?  One that if you went away tomorrow you think no one would notice? We wonder how many employees go through their daily work lives and wonder just that.  It’s certainly not the stuff that fully engaged employees are made of, is it?  But unfortunately too many employees go through days like that, and that’s a shame because it’s not their fault.  The fault lies with all levels of management that don’t take the time to let their employees know that they matter, really matter to the success of the company. 

Why? 

Simply because when employees understand why their job matters, they will do that job better.   

If you don’t know or can’t explain why a job matters, why do you have that job in the first place?  Is this one of those positions that is first to be eliminated when times start to get bad?  Do you find it difficult to draw any kind of direct relationship between that job function and the internal or external customer that benefits from that work? 

Connect the dots for each employee; let them know the importance of that job all the way to the top of the organization and more importantly to the external customer.  When the employees know how their performance contributes the overall business and why they matter, they will be more likely to be more involved, get engaged, solve more problems and add more value. 

When all levels of management take the time to do this, they will also be in a much better position to recognize and reward that employee for superior performance.  That of course sets everything in motion to be able to be repeated up, down and across the lines. 

The answer to these questions depends on which side of academia you research, or which book of the moment happens to get the most press.  Actually, press on the argument of intrinsic v. extrinsic motivation has died down somewhat lately.   

Regardless, you can’t be in the incentive and reward business without an encounter somewhere along the way with someone who takes special glee in telling you that the incentives and reward programs just don’t work.  There is almost a religious fervor in their tone when they do.  Like politics, it’s a waste of time engaging in the argument as you won’t convince someone to change their mind anyway. 

At AwardEmployees.com, we don’t delve too deeply into the psychology of human motivation.  We just know it exists, the tenets or which are embedded in any award program ever implemented.  Our fundamental beliefs were formed early on by a relationship with Dr. Aubrey Daniels, the world’s foremost authority on applying the scientifically-proven laws of human behavior to the workplace.  Using his fundamentals, we have been involved with implementing hundreds of successful reward and recognition systems across American business, large and small.  We don’t need to get into the argument, we don’t speak scientific…we just know it works! 

For those who need to understand the whys and wherefores of intrinsic and extrinsic motivation, and wish to get deeper into it, we offer you two articles that do a pretty good job of explaining some of the differences.  One is titled “Why Extrinsic Motivation Doesn’t Exist” by Steven Reiss, PhD and the other “Driving Me Crazy Again” by Aubrey Daniels mentioned above. 

Frankly, our perspective is that both of these motivation types are at play in everything humans do, and they both have an effect on the success of a reward program.  After analyzing these types of programs going on 40 years….as we said we just know it works!

Who best to reinforce the added value that employees show us every day than one of their peers. 

Frankly it’s a tad arrogant to think that any manager has the ability to know everything that’s happening within their span of control at all times.  And if you know one that does they either they don’t have enough on their plate or are heavily into micro-managing.   

Let’s face it, unless front line and mid-level management is directly involved in the day to day operations of each employee, it is virtually impossible to see all the tremendous performances that go on every day in every organization.   

There was a time when companies wouldn’t have dreamed of approving  a recognition budget that gave every employee in the company the authority to give that budget away to their peers without management involvement.  But peer to peer programs are more prevalent today than ever and are growing yearly.  Why? 

First, because these programs really work.  Clients that run them brag about them.   Here’s a quote from Carolyn Stokke,  Recognition Program Manager at Bonneville Power Administration who manages their peer to peer program for over 3000 employees:   

“We’ve been implementing a peer to peer program for over 10 years and consider it very successful.  While other recognition programs have come and gone, the P2P program has stayed in place because it gets our people involved and keeps them engaged encouraging improved performance of all our associates.  I have no doubt this program has paid for itself over and over again.” 

Second, the right employees are getting recognized because the ones doing the issuance know what’s going on.  They know who’s doing the job and who isn’t.  They’ll know who is deserving of recognition because they work with them either in the same department or in cross-functional departments.   

And third, because they take it seriously and want it to be effective and produce results.  They know it’s a good benefit and are glad to have it.  They also know how powerful a thank you is to their fellow employees and they want to be the ones giving the thanks. 

Your employees have the ability to make a peer to peer program successful.   Many managers unfortunately don’t, or won’t.  Your employees know what works, and you can rest assured that the money you give them either $25, $50 or $100 each per year will be used wisely.   

As the manager in charge, you will be guiding and overseeing the rules and analyzing the results.  The programs are transparent and vendors you use for awards can supply you with great reporting to assure that the funds are being handled properly. 

Please let us know if we can assist you in planning or improving your peer to peer recognition program.

Knowing the value of your employees and recognizing them for their performance should go hand in hand.  It has always been interesting to me that in so many organizations, management hasn’t taken the time to communicate that value to the employee.   

While everyone seems to think companies understand the worth of the individual to the company, you don’t often see companies express that worth as a hard dollar number.   That wouldn’t be viewed by most as politically correct and probably only mentioned in high level financial meetings.  It’s crass to think in terms of employees as just numbers.  Instead they are looked upon as assets.  Which is of course, a number isn’t it? 

To determine employee value, some would simply say that what you pay them determines the value; others might argue that the value is the outcome of their performance.  Metrics like “revenue per employee” and “net income per employee” can be combined to come up with “return on employee” which can then be used as a benchmark within an industry.   

So why is this important?  If you don’t have knowledge of the value of your employee how do you answer their question… 

“What should I specifically do to add more value?” 

And if you can’t answer that, how can you design and implement a reward and recognition system that drives improved performance? 

Improved performance is not about working harder or being busier (although unfortunately too many people in management see it this way).  It’s about doing what’s necessary to succeed by delivering a better result with less effort. 

Let your employees know their value to the organization and impact on the customer.  Then help them formulate the things they can do to improve.  When you connect the employees work to a business outcome, their performance becomes relevant.  And then you’ve got the core of a successful employee recognition system.