John Sylvester: Unlocking the value of peer recognition on every level of the organisation

Senior management needs to become more connected to the workforce
Senior management needs to become more connected to the workforce

While 85 percent of employees feel appreciated by their direct managers, only 57 percent feel appreciated by senior management. This is according to the results of a survey of 1,435 employees across 52 medium and large sized organisations based in the UK, carried out in January and February1.

The survey findings highlight a lack of connection between senior management and their workforce that is likely to have a detrimental impact on employee engagement. Yet the evidence shows that senior managers do not fully appreciate the problem. Another recent survey2 found a disconnect between managers’ and employees’ answers to the question, ‘How effective do you think your company is at recognising employees for good performance?’ While 89 percent of senior managers felt their organisation was good at showing appreciation to workers, only 70 percent of employees gave their firms high marks for acknowledging achievements.

Organisations that are failing to foster a culture of recognition driven by senior management tend to be those that take a traditional and increasingly outmoded approach, relying on line manager recognition. If organisations are to deploy initiatives that will help them achieve their goals, HR should play a part in driving a recognition culture beyond the HR department and middle management.

Increasingly, recognition initiatives need to go up the hierarchy, drawing in senior management, and horizontally too, enabling colleagues to recognise peers working at their level in the organisation. Ultimately, peer recognition is just about people, regardless of job title, recognising each other for a job well done.

Effective ‘thank yous’

Peer recognition need not be based on high value rewards; regular well-communicated ‘thank yous’, perhaps by SMS or e-card, are more effective than occasional high value rewards. A formalised system, such as an online portal designed to make it easy to deliver ‘thanks yous’ aligned to corporate values, is just as effective when colleagues use it to thank each other as it is when senior management use it to thank employees.

It is also possible to extract management information about which values are being recognised and which are not, who is giving and receiving recognition and who is not – enabling HR to promote certain values and identify individuals who are not engaged with the organisation and in danger of leaving.

Power giant E.ON has seen tangible results from its peer recognition system, Buzz. E.ON believes that the Buzz scheme is breaking down barriers between senior managers and employees as every member of staff is empowered to nominate any other person in the company for recognition. Every two minutes, an E.ON employee receives a personalised ‘thank you’ from a colleague, manager or customer sent via its online recognition scheme.

Since the programme was launched in 2013, 76 percent of the company’s employees, more than 49,000 people, have been ‘buzzed’. Senior executives were instrumental in the launch, sending out many ‘thank yous’ themselves, helping to generate the initial buzz that sent the programme viral.

Communications hold the key

Of course, people can only use recognition systems effectively if they know about them. Research by consultancy Bersin by Deloitte found that while three out of four companies say they have a recognition programme in place, only 58 percent of employees believe these programmes exist3. Only 17 percent of employees who participated in the study indicated that their organisations’ culture strongly supports recognition. This lack of effectiveness is largely driven by the misdirected nature of most recognition programmes, according to Bersin, as 87 percent of organisations reported that their programmes are designed to recognise service or tenure. Instead, senior managers need to know about employee actions that deserve reward.

Communication and personal contact is key. Annual awards ceremonies are sometimes the only face time between senior managers and employees in large enterprises. The reality in most organisations is that senior managers are dealing with a very different set of priorities in their daily workload than a telesales or finance admin person. It may be necessary to ring fence time for senior management to spend delivering meaningful recognition to employees in different roles. At the very least, senior management may be copied into the recognition process so that they can add their thanks when a line manager or peer has identified an action worthy of recognition.

Cost-benefit analysis

Peer recognition systems typically come in at 1 percent – 2 percent of the cost of the payroll, much less than old school bonus or commission systems. Yet the impact an effective peer recognition system has on bottom line engagement scores is far higher and better engagement is linked to improved retention rates. Benefits resulting from retention improvements include savings on recruitment costs and lost productivity that have been estimated at over £30,0004 for each person who leaves.

Building a culture of appreciation pays dividends. The data reveals that employers can expect to gain nearly four years length of service when the good work undertaken by an individual employee has been recognised by their manager or a colleague5. A more stable and engaged workforce is the key to a productive and successful organisation.

 

References

1 The P&MM  2016 ‘Staff Appreciation Audit’. http://staffmotivationmatters.co.uk/news-pmm-staff-appreciation-audit-reveals-positive-trend-employee-recognition/

2 OfficeTeam survey. http://www.incentivemag.com/Strategy/Ask-the-Experts/Roy-Saunderson/Top-10-Reasons-Why-Companies-Fail-at-Employee-Recognition/

3 https://www.bersin.com/News/Content.aspx?id=15543

4 http://www.telegraph.co.uk/finance/jobs/10657008/Replacing-staff-costs-British-businesses-4bn-each-year.html

5 http://staffmotivationmatters.co.uk/news-workforce-analysis-reveals-staff-retention-rates-improve-by-nearly-4-years-when-employee-efforts-are-recognised/

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About John Sylvester

I can now claim over 30 years experience in the incentive and motivation agency business! After five initial years at Grass Roots I joined p&mm in 1989 and, following a management buy-out, the business was floated on AiM in 2004 as Motivcom plc. I sat on the main board through to its fully supported acquisition by Sodexo in September 2014. I continue on the board of the company with an objective to drive its integration with Sodexo and help realise the strategic benefits of being part of a larger international group.

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2 Comments - Write a Comment

  1. Great article on the importance of peer recognition to increase employee motivation. Today you don’t have to build something on your own like EON did, you can rely on various existing platforms like http://www.braavoo.com which are set up and running in no time and increase employee motivation from day one. They are often also really cost-effective and start at a couple of dollars per user/month so you don’t need to spend 1-2% of payroll if you don’t want to.

  2. I don’t agree you said to foster a culture increasingly outmoded approach, If you have any other idea then it will work

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