HOW

Impacts Innovation & Employee Engagement

PERFORMANCERECOGNITION

T H I N K A B O U T T H E L A S T T I M E

S O M E O N E YO U W O R K W I T H TO L D YO U ,

HOW DID IT MAKE YOU FEEL?

“GREAT JOB!”

FOR MOST OF US,

SINCERE RECOGNITION CAN BE A

WHETHER IN

POWERFULMOTIVATOR

TO REDOUBLE OUR EFFORTS

AND STRIVE FOR EVEN GREATER

PERFORMANCE IN THE FUTURE

SPORTS , AMONG OUR FAMILIES , OR AT WORK .

IN FACT,STUDIES SHOW who receive recognition

are more l ikely to be highly engaged.

EMPLOYEES

ARE MORE LIKELY TO PERFORM AT THEIR BEST

WAYS TO IMPROVE THEIR COMPANY.

MORE LIKELY TO DEVELOP

AND AS A RESULT,

&INNOVATIVE

WE WILL LOOK AT TWO DIFFERENTTYPES OF PERFORMANCE RECOGNITION:

ONGOING EFFORT:This is typical ly informal, casual , and more frequent recognit ion, typical ly del ivered in the form of a written note, an email , or a sincere thank you.

ABOVE AND BEYONDPERFORMANCE:

This type of recognit ion is typical ly more formal and tied to a more signif icant achievement. It is frequently accompanied by announcement to the team or company and/or an award item.

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how performance recognition impacts your employee’s engagement, innovation, and output.

LET’S EXPLORE

ENGAGEMENT

IN THE LAST FEW YEARS,

A RECURRING FOCUS OF DISCUSSIONSOF BUSINESS PERFORMANCE HAS BEEN

INCREASING EMPLOYEE

AVG. SHAREHOLDER’S RETURN %

EMPLOYEE ENGAGEMENT %

60-70

24.2

49-60

9.1

>25

-

While definit ions of engagement abound, the crux of the idea is simple - when employees are more fulf i l led in their work and committed to their colleagues and company, they (and the company) wil l perform better.

2004 Hewitt Associates, Employee Engagement at Double-Digit Growth Companies

AS A RESULTcompanies are investing heavilyin a variety of ways to increase

employee engagement.

O N E O F T H E M O S T E F F E C T I V E

WAY S TO I N C R E A S E E N G A G E M E N T

IN BOTH FORMAL ANDINFORMAL WAYS.

is simply to recognize employees for their performance,

RECOGNITION ACROSS FOURCOMPONENTS OF ENGAGEMENT:

WHEN COMPANIESFOCUS ON RECOGNITION

PERCENT OF EMPLOYEESWHO ARE HIGHLY ENGAGED

DRIVE & DETERMINATION

WHEN COMPANIESDON’T CARE

89%

44%

RECOGNITION ACROSS FOURCOMPONENTS OF ENGAGEMENT:

WHEN COMPANIESFOCUS ON RECOGNITION

PERCENT OF EMPLOYEESWHO ARE HIGHLY ENGAGED

COMPANY CONNECTION

WHEN COMPANIESDON’T CARE

81%

35%

RECOGNITION ACROSS FOURCOMPONENTS OF ENGAGEMENT:

WHEN COMPANIESFOCUS ON RECOGNITION

PERCENT OF EMPLOYEESWHO ARE HIGHLY ENGAGED

WORK RELATIONSHIPS

WHEN COMPANIESDON’T CARE

78%

35%

RECOGNITION ACROSS FOURCOMPONENTS OF ENGAGEMENT:

WHEN COMPANIESFOCUS ON RECOGNITION

PERCENT OF EMPLOYEESWHO ARE HIGHLY ENGAGED

PERSONAL STANDING

WHEN COMPANIESDON’T CARE

76%

28%

WHEN LOOKING ACROSS THESE FOUR DIMENSIONS,

DRIVE &DETERMINATION

COMPANYCONNECTION

WORKRELATIONSHIPS

PERSONALSTANDING

there is a stark difference in the engagement levels of those who receive recognit ion with those who do not.

MORE THAN TWICE AS MANYEMPLOYEES ARE HIGHLY ENGAGED

among those who receive performance recognit ion compared to those who do not.

COMPANIES WITHSTRONG RECOGNITION

PERCENT OF EMPLOYEESWHO ARE HIGHLY ENGAGED

RECOGNITION AND ENGAGEMENT

COMPANIES WITH WEAK RECOGNITION

78%

34%

A good example of this is seen in

the relationship between managers

and those they directly oversee.

AMONG THOSE WHO RECEIVE

STRONG PERFORMANCE RECOGNITION

Great job!

87%say they have a strong relationship

with their direct managers

AMONG THOSE WHO RECEIVE

WEAK PERFORMANCE RECOGNITION

...

51%say they have a strong relationship

with their direct managers

Great job!

IN ADDITION,

82% of managers who recognize their employees’ performance more than once a month

REPORT HAVING GOOD RELATIONSHIPS WITH THEM.

FREQUENTRECOGNITION

Great job!

IN CONTRAST,

only 63% of managers who recognize performance less frequently

REPORT HAVING GOOD RELATIONSHIPS WITH THEM.

INFREQUENTRECOGNITION

UNFORTUNATELY, OF MANAGERS REPORT THAT THEY INFREQUENTLY RECOGNIZE THEIR TEAM MEMBERS’ PERFORMANCE.39%

While it’s certainly possible that

RECOGNITION IS A RESULT OF

GOOD RELATIONSHIPS(and good managers),

THE OPPOSITE IS CLEARLY ALSO TRUE

INCREASED PERFORMANCE

RECOGNITION APPEARS TO BE

ONE OF THE MOSTEFFECTIVE WAYS

to improve relationships between managers and employees.

employees believe either type of recognitionis much more important than a cash bonus.

IN FACT,

>

5% SALARYBONUS

ABOVE & BEYONDRECOGNITION

ONGOING EFFORTRECOGNITION

28%22%

50%

EMPLOYEE/MANAGER RELATIONSHIPS AREIMPROVED BY PERFORMANCE RECOGNITION

EMPLOYEES CHOICE OF WHICH BENEFIT WOULD

MOST IMPROVE THEIR RELATIONSHIP WITH THEIR DIRECT MANAGER.

PERFORMANCE RECOGNITIONFUELS EMPLOYEE INNOVATION

?HOW DOES THAT AFFECT

EMPLOYEE AND COMPANY

PERFORMANCE

SO, IF EMPLOYEE ENGAGEMENTincreases with strong performance recognition,

THE FIRST MAJOR EFFECTTHAT RECOGNITION HAS ON PERFORMANCE

DRIVING INNOVATIONA top priority for successful

executives everywhere.

EMPLOYEES GENERATED IN THE LAST

MONTH TO IMPROVE THEIR COMPANY’S

PRODUCTS, SERVICES, OR SYSTEMS

THE RESPONSES WERE COMPELLING.

When asked how many new ideas

Employees receiving strong recognition generate

nearly twice as many innovative ideas each month.

THE RESPONSES?

EMPLOYEES RECEIVINGSTRONG RECOGNITION

EMPLOYEES RECEIVINGWEAK RECOGNITION

1.8 NEW IDEAS per month

to help improve their company

3 NEW IDEAS per month

to help improve their company

Employees will proactively seek new ways to improve efficiency at their

company when they receive strong performance recognition.

IN ADDITION,

EMPLOYEES RECEIVINGSTRONG RECOGNITION

EMPLOYEES RECEIVINGWEAK RECOGNITION

54%seek new ways to improve efficiency

87%seek new ways to improve efficiency

We found that recognit ion can be a powerful driver of continual improvement.

While there are many factors that go into an individual ’s or a company’s abil ity to innovate,

5% SALARYBONUS

ABOVE & BEYONDRECOGNITION

ONGOING EFFORTRECOGNITION

41%32% 27%

EMPLOYEE INNOVATION ISIMPROVED BY PERFORMANCE RECOGNITION

EMPLOYEES CHOICE OF WHICH BENEFIT WOULD

MOST IMPROVE THEIR INNOVATION FOR THE COMPANY.

PERFORMANCE RECOGNITIONFUELS EMPLOYEE OUTPUT

THE SECOND MAJOR EFFECTTHAT RECOGNITION HAS ON PERFORMANCE

WORKING AT MAXIMUM CAPACITYIncreasing employees’ wil l ingness to

work at their best.

COMPANIES WITHSTRONG RECOGNITION

PERCENT OF EMPLOYEES WORKINGAT 90% CAPACITY OR ABOVE

EMPLOYEE & TEAM OUTPUT

COMPANIES WITH WEAK RECOGNITION

53%40%

EXPECTATIONS

Employees have a wide variety of expectations

ABOUT THE FREQUENCY AND NATURE

OF RECOGNITION

IDEAL PERFORMANCE RECOGNITION FREQUENCY

MULTIPLE TIMES A WEEK 9%

ONCE A WEEK 11%

MULTIPLE TIMES A MONTH 19%

ONCE A MONTH 26%

ONCE A QUARTER 20%

ONCE EVERY 6 MONTHS 7%

ONCE A YEAR 9%

HE/SHE SHOULD RECOGNIZE HIS/HER

EMPLOYEES

HOW IS A MANAGERsupposed to know how often

thoughtful ly combining frequent andinformal recognition for “ongoing effort”

with less frequent but more meaningfulrecognition of “above and beyond performance.”

THE ANSWER

+

ONGOING EFFORT,

especial ly when provided frequently and

sincerely , can be used to recognize l itt le wins

and encourage employees to keep going.

ON THE OTHER HAND,

recognizing employees less frequently but

with more formality for above and beyond

performance sets apart the most signif icant

achievements in a unique and social way.

that both types of recognition are important andshould be used in deliberate and complementary ways.

RESEARCH SHOWS

+

Source: Cicero 2013, The Effect of Performance Recognition on Employee Engagement