SHRM Survey Findings: Employee Recognition Programs, Summer 2011

June 23, 2011

SHRM Survey Findings: Employee Recognition Programs, Summer 2011In collaboration with and commissioned by Globoforce

SHRM/Globoforce Survey: Employee Recognition Programs, Summer 2011. ©SHRM 20112

Key findings

What are the most important workforce management challenges organizations are currently facing? For more than three-quarters of organizations, different generations of employees (85%) and multiple cultures in the workplace (84%) are important (“important” and “very important”) workforce challenges.

What are the key HR challenges organizations expect to face in the next three to five years? Nearly all organizations indicated that employee engagement, employee retention and employee recruitment are the challenges their organizations will be facing in the future.

How many organizations currently have an employee recognition program? Eight out of 10 organizations currently have an employee recognition program.

What are the most common reasons that organizations recognize employees? The most frequently reported reason was recognizing employees for their years of service (58% of responding organizations reported having this practice). Nearly one-half (48%) indicated that “going above and beyond with an unexpected (not regular) work project” was also commonly recognized, and 43% reported recognizing employees for a “successful performance result related to the organizational financial bottom line.”

Are employee recognition programs challenging to measure? Few organizations (13%) measure the ROI of these programs. Of those that do measure the ROI, the majority of respondents (68%) agree that measuring the effectiveness of their employee recognition programs is challenging and another 9% strongly agree. Less than one-quarter (23%) of respondents disagree that measuring an employee recognition program is challenging.


Talent Management


Do you think that at your organization:

Note: Analysis excludes “not sure” response. Percentages above reflect respondents who answered “yes” to the question.

Percentage

organizational charts are an accurate indicator of your organization’s leaders and influencers?

71%(n = 491)

annual performance reviews are an accurate appraisal for employees’ work? 61%(n = 435)

employees are rewarded according to their job performance? 56%(n = 406)

managers or supervisors effectively acknowledge and appreciate employees? 46%(n = 331)

employees are satisfied with the level of recognition they receive for doing a good job at work?

31%(n = 223)


Of the following options, which do you think is the most accurate appraisal of employee performance?

Other

360° annual (or semi-annual) performance review (e.g., colleagues and clients provide feedback in addition to direct manager)

Manager-driven annual (or semi-annual) performance review

Manager-driven ongoing feedback program, including constructive criticism and positive recognition on a regular basis (e.g., weekly,

monthly)

Multi-source (manager, senior leader, peer, etc.) ongoing feedback program, including constructive criticism and positive recognition on

a regular basis (e.g., weekly, monthly)

2%

10%

21%

25%

42%

n = 726


The importance of workforce management challenges that organizations are currently facing:

Very Important Important Unimportant Very

Unimportant

Multiple cultures in the workforce 35% 49% 15% 1%

Different generations among employees 34% 51% 13% 1%

Global diversity of today’s companies 24% 38% 29% 9%

Harnessing the power of social networking technologies 21% 51% 24% 4%

n = 742


The importance of workforce management challenges that organizations are currently facing:

1-99 employees = 21%100-499 employees = 25%500-2,499 employees = 15%

2,500-24,999 employees = 27%25,000 and above = 41% Larger organizations > smaller organizations

Comparisons by organization staff size:Compared with smaller organizations (2,499 employees or fewer), larger organizations (2,500 or more employees) view global diversity of today’s companies as more a important workforce management challenge.

Government = 49%Publicly owned for-profit = 35%Privately owned for-profit = 30%Nonprofit = 38%

Government > publicly and privately owned for-profit organizations and nonprofit organizations

Comparisons by organization sector:Government agencies are more likely to view multiple cultures in the workplace as an important workforce management challenge compared with how publicly and privately owned for-profit organizations and nonprofit organizations view this challenge.

Publicly owned for-profit = 30%Privately owned for-profit = 21%Government = 20%

Nonprofit = 10% Publicly owned for-profit organizations, privately owned for-profit organizations, and government agencies > nonprofit organizations

Publicly owned for-profit organizations, privately owned for-profit organizations, and government agencies are more likely to view global diversity of today’s companies as an important workforce management challenge compared with nonprofit organizations.


HR challenges organizations anticipate facing in the next three to five years:

Very Important Important Unimportant Very

Unimportant

Employee engagement 69% 30% 1% 0%

Employee retention 63% 32% 4% 1%

Employee recruitment 53% 43% 3% 0%

Culture management (i.e., managing your organization’s corporate culture) 51% 45% 4% 0%

Note: n = 742. Total may not equal 100% due to rounding


Methods organizations use to track employee engagement levels:

Other

Social media activity by employees (i.e., tracking employee comments on internal and external company forums)

Company-administered employee engagement surveys/analysis (i.e., the organization conducts its own survey with employees)

Vendor-administered employee engagement surveys/analysis

Employee retention rates

Employee exit interviews

3%

11%

40%

43%

65%

71%

Note: n = 637. Includes only organizations that indicated they track employee engagement levels. Total does not equal 100% due to multiple response options .


Employee RecognitionPrograms


Does your organization have an employee recognition program?

Yes 80%

No 20%

n = 698


The Most Common Reasons Organizations Recognize Employees

Other

Completion of regular work projects at a faster than usual pace

Completion of regular work projects with high-quality results

Exemplary behavior that aligns with organizational values

Successful performance results related to the organizational financial bottom line (e.g., financial gains for organization, increased sales)

Going above and beyond with an unexpected (not regular) work project

Years of service

3%

2%

9%

37%

43%

48%

58%

Note: n = 549. Includes only organizations that have an employee recognition program in place. Total does not equal 100% due to multiple response options.


How do organizations track employee recognition programs?

By employee level/title

By office location

By business unit/department

34%

42%

64%

Note: n = 423. Analysis excludes “not applicable” responses. Total does not equal 100% due to multiple response options.


Is your CEO/president involved in your employee recognition program?

I don’t believe the CEO/president is aware of the program

Yes, the CEO/president is actively involved in every aspect

The CEO/president is aware we have a program, but does not invest any time in it

Yes, the CEO/president champions the program, but enables his or her team to drive it without the CEO's

input

3%

23%

29%

46%

Note: n = 552. Total does not equal 100% due to rounding.


Does the budget for employee recognition programs come out of the HR budget, the individual department/business unit budget or from both budgets?

Both the HR budget and individual de-partment/business unit budgets

The individual department/business unit budget

The HR budget

30%

34%

37%



Which area in HR is responsible for employee recognition at your organization?

HR Functional Area Percentage

General HR function 59%

Rewards and recognition 14%

Compensation and benefits 13%

Performance management 4%

Learning and development 3%

Other 8%



Does your organization track the ROI of your employee recognition program?

Yes13%

No87%

Note: n = 419. Analysis excludes “not sure” responses.


Percentage of organizations that track the ROI of their employee recognition program

1-99 employees = 10%100-499 employees = 6%500-2,499 employees = 7%

2,500-24,999 employees = 19%25,000 and above = 21% Larger organizations > smaller organizations

Comparisons by organization staff size:Larger organizations (2,500 employees and more) are more likely to track the ROI of their employee recognition programs compared with smaller organizations (2,499 employees and fewer).

Publicly owned for-profit = 22% Privately owned for-profit = 10%Nonprofit = 7%

Publicly owned for-profit organization > privately owned for-profit organization, nonprofit organization

Comparisons by organization sector:Publicly owned for-profit organizations are more likely to track the ROI of their employee recognition programs compared with privately owned for-profit and nonprofit organizations.


The effectiveness of employee recognition programs is challenging to measure

Agree68%

Disagree23%

Strongly Agree9%

Note: n = 53. Includes only the respondents who indicated they track the ROI of their employee recognition programs. Survey included a “strongly disagree” response option, but this option was not selected by any respondents.


Common challenges organizations experience in tracking the ROI of employee recognition programs

Percentage

Metrics of success keep changing, making it impossible to consistently report on ROI 32%

The recognition program cannot be linked with our talent management or performance management systems, giving us no insight into how recognition affects key metrics such as performance improvement or retention

32%

The recognition program is not designed to deliver improvement in metrics that our executive leadership (CEO/CFO/COO/CHRO, etc.) finds valuable 22%

The recognition program only rewards the ultimate results, but does not take into consideration how those results are achieved (e.g., in line with company values)

20%

Only segments of employees are eligible to participate in employee recognition programs (e.g., top performers, select job levels) 20%

Don’t know what metrics we should be measuring to prove ROI 15%

Note: n = 41. Includes only the respondents who indicated they track the ROI of their employee recognition programs. Total does not equal 100% due to multiple response options.


Demographics


Demographics: Organization industry

Manufacturing 20% Health care and social assistance 16% Other services except public 9%

Educational services 8% Professional, scientific and technical services 8% Retail trade 7% Finance and insurance 6% Public administration 4% Accommodation and food services (accommodation; food services and drinking places) 4% Arts, entertainment and recreation 3% Information 2% Transportation and warehousing 2% Construction 2% Utilities 2% Wholesale trade 1% Administrative and support and waste management and remediation services 1%

Management of companies and enterprises 1% Mining 1% Real estate and rental and leasing 1% Religious, grantmaking, civic, professional and similar organizations 1% Repair and maintenance 1%

Agriculture, forestry, fishing and hunting 0% Personal and laundry services 0% Private households 0%

n = 710


Demographics: Organization sector

23

34%

42%

16%

8%

n = 730


Demographics: Organization staff size

24

100-499 500-2,499 2,500-24,999 25,000+

3%7%

41%37%

12%

1-99

n = 730


Demographics: Other

25

Does your organization have U.S.-based operations (business units) only or does it operate multinationally?

U.S.-based operations only 57%

Multinational operations 43%

Is your organization a single-unit company or a multi-unit company?

Single-unit company: A company in which the location and the company are one and the same

16%

Multi-unit company: A company that has more than one location 84%

Are HR policies and practices determined by the multi-unit corporate headquarters, by each work location or both?Multi-unit headquarters determines HR policies and practices 44%

Each work location determines HR policies and practices 2%

A combination of both the work location and the multi-unit headquarters determine HR policies and practices

54%

HR department/function for which you responded throughout this survey

Corporate (companywide) 59%

Business unit/division 20%

Facility/location 21%

n = 721

n = 623

n = 729

n = 623


Response rate = 13%

Sample composed of 745 randomly selected HR professionals from SHRM’s membership who are employed at organizations with a staff size of 500 or more employees.

Margin of error is +/- 3%

Survey fielded May 17-27, 2011

26

Methodology

For more poll findings, visit www.shrm.org/surveys

Follow us on Twitter: http://twitter.com/SHRM_Research

SHRM Survey Findings: Employee recognition programsIn collaboration with and commissioned by Globoforce

Documents

SHRM Survey Findings: Employee Recognition Programs, Summer 2011