SHRM Survey Findings: Employee Recognition Programs

June 23, 2011

SHRM Survey Findings: Employee Recognition ProgramsIn collaboration with and commissioned by Globoforce

SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 20112

The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management with more than 250,000 members worldwide. www.shrm.org

SHRM regularly conducts surveys and polls with its members on HR and business topics.

About the Society for Human Resource Management


Survey fielded May 17-27, 2011

The survey link was emailed to 6000 randomly selected HR professionals from SHRM’s membership database, 745 responded – a response rate of 13%.

The majority of respondents were employed at organizations with a staff size of 500 or more employees (90%) in the for-profit sector (76%).

3

About this Research


Talent Management• Current workforce challenges

• Future HR challenges• Employee engagement


The Top Challenges That Organizations Are Currently Facing

Please rate the importance of the following workforce challenges:

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


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


Of the following options, which do HR professionals 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%

61% of HR respondents indicated that annual performance reviews were an accurate appraisal of employees’ work, however when compared with other types of appraisals, annual performance reviews came in 3rd. Multi-source – positive recognition – on a regular basis – was rated as the MOST accurate appraisal of employee performance.


Organizations That Track Employee Engagement Levels

Do track86%

Do not track14%

n = 742


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 Recognition Programs• How important is recognition to employees?

• What types of employee behaviors are recognized?

• Measuring effectiveness of programs


How important is recognition to employees?

Source: 2011 SHRM Employee Job Satisfaction & Engagement Research Report

Percentage of employees that responded that recognition by management is “very important” to their overall job satisfaction:

2002(n = 604)

2004(n = 604)

2005(n = 601)

2006(n = 605)

2007(n = 604)

2008(n = 601)

2009(n = 601)

2010(n = 600)

2011(n = 598)

49% 47% 45% 47% 49% 44% 52% 48% 55%


Does your organization have an employee recognition program?

Yes 80%

No 20%

n = 698


While 80% of organizations have employee recognition programs, the data suggest that these programs could be more effective.

Note: Analysis excludes “not sure” response.

Do you think at your organization: Yes No

employees are rewarded according to their job performance? 56% 44%

managers or supervisors effectively acknowledge and appreciate employees? 46% 54%

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

31% 69%


Top Reasons That 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%

Note: n = 547. Total does not equal 100% due to rounding.


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.


Of those organizations that track the ROI of their employee recognition programs, 77% agree that it is challenging to measure the effectiveness of these programs.

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.


The challenges that 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.


Key Take-Aways

The majority of organizations have employee recognition programs in place, however it is important for these programs to be effective and linked meaningfully to an organization’s strategy. Be creative, expand rewards beyond just years of service. Investigate what types of rewards will motivate your employees.

Employee recognition programs are crucial in terms of employee engagement, recruitment and retention which HR professionals indicated as major challenges in the next 3 to 5 years. Businesses must invest in their top performers and reward them in ways that allow them to see the impact of their work on the organization’s goals and objectives. Employees want to see meaning in their work.

HR professionals indicated that frequent (weekly, monthly) multi-source feedback is the most accurate way to gauge employee performance. Encourage recognition by peers as well as different layers of management.

Understand your workforce. Different generations and cultures may be motivated by different things. Create recognition offerings that are adaptable – it is not a once size fits all method.


Questions?

Documents

SHRM Survey Findings: Employee Recognition Programs