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Special Report on Rewards & Recognition Getting Personal

September 10, 2010

The personal touch always makes the reward seem sweeter—especially when there’s little or no money attached.

That’s what some frugal employers figure. At a time when recognition is more important than ever to engage and retain valued employees, companies hope to make nonfinancial rewards more meaningful by customizing them to appeal to individual workers. Localized laurels include such incentives as paid days off, lunch with senior executives, personalized thank-you messages from supervisors and fellow employees, flexible work schedules and even personal artistic tributes. With corporate budgets still tight, 40 percent of employers are focusing on such nonfinancial recognition, and more than half intend to put more emphasis on such rewards, according to a recent survey by consulting firm Hay Group and human resources association WorldatWork.

     “What I’m seeing is less focus on formal awards and more on building a culture of appreciation on a local level,” says Theresa Chambers, chief motivation officer for Recognition Works, a consulting firm in Seattle. Local rewards offer flexibility so that employees can receive recognition soon after they turn in an exceptional performance. “Recognition should happen as close to the behavior as possible,” Chambers says. “Otherwise, it starts to lose meaning and value.”

Great American Insurance Group in Cincinnati offers several local recognition programs. For example, its information technology unit’s High Five program awards points that can be turned into gift cards and other prizes. “You get increased employee engagement very specific to that business unit’s strategy,” says Shelly Gillis, vice president of human resources. “We want that manager feedback, that peer-to-peer recognition. It becomes very personal.”

The only downside to localized programs, she says, is that not all business units offer incentives. “So,” Gillis says, “you have a situation where you have the haves and the have-nots.” But Great American also provides awards based on length of service, a centrally run program that applies to everyone. “It’s important to have both [local and centralized approaches] because you never know what motivates individuals,” Gillis says. “I personally like the blend.”

 Mixing it up
The Everett Clinic, a health care provider with 16 offices in Washington state, also uses both local and centralized initiatives. The human resources department and senior leaders organize two recognition events each year. Meanwhile, managers are encouraged to develop reward programs for their specific departments, and they can receive financial assistance to implement them.

“Managers receive training on recognition to learn new ideas and to refresh existing programs to make them more effective,” says Rochelle Crollard, director of human resources. “Giving the right recognition and making it meaningful takes time and effort, so providing training in recognition skills is key.” However, a recent survey by Terryberry Co., an employee recognition firm in Grand Rapids, Michigan, found that only 27 percent of employers provide recognition training for managers.

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The training clearly seems to be working at the Everett Clinic, where rewards are plentiful. Managers there believe small but frequent tokens of appreciation are more effective than the occasional splashy honor. Both peers and supervisors awarded more than 43,000 HeroGrams last year to their colleagues for exceptional accomplishments. Based on the number of HeroGrams they receive, employees can win such prizes as gift cards and paid days off. Employees also receive instant praise with Caught in the Act cards, which are used in monthly prize drawings. Nearly 3,000 Caught in the Act cards were sent in 2009. To try to enhance customer service, the Everett Clinic adopted yet another appreciation program this year: Employees receive Pat on the Back cards, with a different customer service skill highlighted each month.

Support for the many employee appreciation programs comes from the top. “Our CEO, administrative team and medical directors demonstrate and model the importance of recognition by giving recognition on a daily basis,” Crollard says. “Our CEO keeps a supply of gift certificates and coffee cards in his office for instant praise, and all managers and physicians receive a recognition tool kit with praise cards, candy, and coins called ‘cheerful change’ with special messages like ‘great job.’ ”

The localized rewards are paying off. “Our overall employee satisfaction rate is over 80 percent,” Crollard says, “and our turnover rate is consistently below 13 percent, which is 5 to 10 percent lower than other health care organizations in our market area.”

 Creative touch
Localized programs encourage creativity. For example, the local government in Snohomish County, Washington, developed a popular, decentralized recognition program that started small and grew substantially. Employees draw small, personalized pictures on cards to show their appreciation for their colleagues. “There is no doubt in my mind that having a little, unique and artistic way to support others has caused high employee satisfaction,” says Bridget Clawson, the county’s human resources director. “If you ask about any card, you will invariably learn something about the person who has it, the techniques used and what it meant to them to receive it. The cards encourage us to get to know each other better.”

Clawson herself received an artist trading card when she secured a $25,000 grant for the HR department to build an online onboarding program for new hires.

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Marc Drizin, founder of Employee Hold’Em, a talent retention consulting firm in Indianapolis, likes the decentralization trend because it avoids the one-size-fits-all mentality. Companies “kind of get into that fairness versus equity trap,” Drizin says. “Everything has to be done within the legal guidelines, but that doesn’t mean you can’t look at a specific group of people’s needs.”

Employers should find out how individuals like to receive recognition at work. For instance, a rewards ceremony may be uncomfortable and embarrassing for some people who prefer low-key recognition. What’s more, with four different generations in the workplace, customization is increasingly important. To appeal to the Millennial Generation, some employers use social media to develop and promote rewards programs. People give public kudos to colleagues and upload photos of employee recognition events on such sites as Facebook and Twitter.

“It’s not how much you spend on the rewards, but it’s how effectively you deliver the recognition,” says Chambers, the chief motivation officer at Recognition Works. “It doesn’t have to cost a lot of money, but it’s something that we need to do more of all the time. It does need to be sincere and be true. You can’t give recognition for recognition’s sake.”

Workforce Management, September 2010, p. 24, 26, 28-29 -- Subscribe Now!