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Recognition & Awards Trends & Implications for 2002

February 1, 2002
Related Topics: Featured Article, Compensation, Benefits

The editors of Workforce have looked into their 2002 crystal ball and identified what they think are the major issues affecting HR management today. Then they examined the impact of these issues on individual HR functions.

What's happening in your company that contradicts or confirms these trends?

Read the quick synopsis below. Then to give your opinion, click on the Recognition & Awards Survey.

Workforce will tabulate these results and include them - and selected comments - in the next version of this article.

Major Trends Affecting Human Resources Management in 2002

Trend #1: Significant HR issues are intertwined with the current economic climate.

The economic climate has significant HR implications, and conversely, some HR issues are affecting the economic climate.

For instance, there is an ongoing labor shortage, obscured, in part by the current - but temporary - economic cycle. This labor shortage will have long-term effects on businesses' ability to compete in the world marketplace. Therefore, HR must manage to that labor shortage, despite contrary evidence.

Trend #2: Tough times require continued cost-cutting beyond layoffs.

It looks as if the 9/11 events may have helped to delay the country's economic recovery. Thus, many companies will continue to look for ways to cut costs.

In 2001, layoffs targeted less-skilled and marginal performers. In many organizations, only key employees are left. Additional staff cuts could hurt current business and hinder future economic recovery.

Companies cannot over estimate the importance of key employees to an organization and the continuing need to retain the best and the brightest.

As a result, HR will need to look at both trimming expenses and fulfilling HR's demand to keep and attract the best employees.

Trend #3: "Re-engineering" - or its next iteration - will become an important way to cut costs.

Since downsizing won't achieve the necessary cost-cuts, companies and HR departments will have to re-engineer their processes and do what they now do faster, cheaper, and smarter.

HR will have two roles:

  • First, it will have to look at its own department and make HR more efficient, more cost effective, and a greater contributor to bottom-line stability.

  • Secondly, HR will work with executive and line management to support their re-engineering efforts.

Trend #4: The pending economic recovery will lag unless there are qualified employees in place to make it happen.

Sustained economic recovery is in the hands of the intellectual capital of an organization - its remaining employees.

Because those employees are vital to long-term corporate success, HR is responsible for maintaining their commitment, well being, skill sets and continued employment.

Therefore, HR will use all of its traditional tools to develop and maintain a competitive workforce.

How These Trends Affect Recognition & Awards

  1. Downward Pressure on Salaries
    Cost-control still puts downward pressure on salaries. Raises - if they exist - are kept to a minimum. HR must help management find ways to keep employees motivated and productive until the upturn occurs - without large expenditures of cash.

  2. Recognizing and Rewarding Performance Still Key
    HR is looking for ways to recognize performance - and still not create new expectations or salary/bonus entitlements.

  3. Awards Have Specific Benefits for Tough Times
    Awards still have a higher perceived value than cash. When companies are trying to conserve cash - and recognize employee performance - that perception of "a higher value" takes on a new importance.

    Awards are more conspicuous than cash. Cash is spent - the award reminds the employee of the achievement and the recognition.

    Awards have a wider circle of recognition among family, friends and co-workers, when they are displayed, worn, outing, trip, etc. There's some reminder and/or event that gets the attention of others and reinforces the award, the accomplishment, and the praise.

  4. New & More Frequent Awards Programs
    Thus, HR will work with line management to develop new applications for rewards and incentives programs.

    Management can do recognition and awards activity more frequently than a raise - and provide awards for very specific performances. Awards are a way to support short-term objectives and make only short-term reward commitments - but still recognize significant achievements.

  5. Awards Are Tailored to Individuals
    To be most effective, awards need to be tailored to the individual. Thus, smart HR professionals will survey employees on their specific preferences and offer a broad award selection of awards to meet personal lifestyle preferences.

  6. Awards Provide a Cost-Effective Solution
    Thus, even in tight times, awards continue to be purchased and even take on a new importance as a strong tool for recognition. They have a relatively low cost vis-à-vis their high value in helping to retain, motivate and inspire employees. They recognize individuals as well as teams. They trim costs and can raise internal competitiveness.

Participate in the the Recognition & Awards Survey

Source: Margaret Magnus, Publisher, and The Workforce Editors, January 2002.

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