By Akshay Manwani
13/01/2010
Recognition is an integral component of the need for esteem and is vital as man moves towards self-actualisation, the final need in Maslow’s hierarchal framework. Accordingly, recognition gains strategic importance not only as a means to constantly motivate employees and take care of their esteem, but also as a tool that helps business achieve certain desirable objectives. As human resources expert - Susan M. Heathfield, writes in her article on ‘Five tips for effective employee recognition’, “Employee recognition is not just a nice thing to do for people. Employee recognition is a communication tool that reinforces and rewards the most important outcomes people create for your business.”
The interesting thing then is that even when the benefits of having a formal process of recognition are self evident, why is it that organizations often ignore this area of engaging with employees. SHRM US reports the findings of an online survey of more than 1,000 HR professionals from U.S. organizations, which show that “Nearly six out of 10 HR professionals say top management fails to make recognition a priority, and only 38 percent say top managers are very involved in employee recognition and lead by example.” However, the positive side to employee recognition as reported by The Business Research Lab is that in the employee satisfaction studies done by them, they’ve never found a firm with low employee recognition scores and high employee satisfaction scores.
Problems with recognition:
Once organizations understand the significance of employee recognition, the dilemma between treading the monetary path or a non monetary route is but natural. Says Anandorup Ghose, Solution Lead - Executive Compensation & Governance – India and Middle East, Hewitt Associates, “Higher rewards are often the easier way of trying to address the recognition issue. The answer however might lie in managing the employee through a mix of vehicles which include pay and specific ownership linked reward vehicles, and extend very significantly to areas such as public appreciation, early opportunities, extended training and development platforms.” However, it must be noted that it is easier to formalise a system of monetary recognition throughout the company, while non monetary recognition requires leadership, within the company and across regions and markets, to buy into this method of rewarding employee behavior.
The other important thing Anandorup points out is “Recognition programs can also be tricky to implement considering the impact that it might have on individuals who do not get included into these programs. Organizations need to be sure that culturally their recognition programs lend themselves to easier acceptance within the employee group. Global organizations need to manage the cultural variances that exist within their workforce across different countries. An academic study conducted in 2003 by Prof Geert Hofstede on cultural consequences across nations finds that Western economies such as USA, Australia, Canada etc, with strong individual based cultures will find it more comfortable to accept recognition directed at specific people versus employees in countries such as Korea, Thailand etc which value group based recognition. Countries such as India, China etc lies somewhere in the middle of the scale and companies need to structure programs that offer a fair mix of group rewards with perhaps a more individual recognition.”
Ganesh Chella, founder and CEO of Totus consulting, a strategic consulting firm that designs and implements HR systems and processes for organisations across diverse industries, had also raised the culture issue in an article, where he had mentioned the cultural differences that exist between countries and races when it comes to recognition. Chella wrote that Indian employees often end up getting a lot more non monetary, verbal recognition from their US client managers which is only a social courtesy. On the other hand these employees receive little or no recognition from their Indian superiors who fear that such recognition may lead to expectations of higher monetary rewards. The problem as Chella sees it is essentially of cultural differences and has accordingly suggested that in order to formalize a process of recognition, it is important that organizations hire employees who share similar values and re-emphasize the importance of recognition through periodic training programs.
Process of recognition:
Ambica Saxena, Senior Associate, Mercer Consulting, says “To create a proper system of recognition, it is critical to find out primarily what behaviours and targets do we want to drive in the organization. The old adage goes that 'what gets measured gets done and what gets recognized gets done even better'. Hence identifying the behaviours that need to be driven and creating recognition programs around these behaviours helps organizations.”
Accordingly, the most important tenets of any recognition program should include:
1. Maximum employee involvement: This should be the norm for not only how many employees does the program include, but also takes into account the manner in which employees would like to be recognized. A recognition program should also be explained as thoroughly as possible rather than in a cursory way such as an email communication.
2. Clearly defined and consistent with company objectives: The recognition program must be lucid and should avoid scope for any ambiguities. For example, when organizations have ‘sales star of the month’ schemes, these should clearly define the parameters on which the employee is rewarded, for otherwise the decision may look ad hoc and open to scrutiny. At the same time any recognition program cannot be in isolation and out of sync with the business objectives of the company.
3. Recognition ought to be immediate: This is perhaps of most importance. Where the objective of a recognition program is to motivate and set an example, a delay in implementation of the recognition mechanism can only de-motivate, while also reflecting a casual attitude to the process of recognition on part of the company.
Prashant Utreja, Senior Vice President and Head - Human Resources, Administration, Reliance General Insurance Company Limited, proudly states the case of Reliance Capital, which has adopted an array of measures in order to formalize a process of employee recognition across the group companies. Some of the key features of the reward and recognitions programs across these companies are as follows:
• Across the organization – involves sales, operations, finance, human resources and support staff
• Mix of monetary and non–monetary schemes
• Dedicated budget allocated for the schemes
• Regular recognition programs
• Clear definition of criteria for recognition
• Dedicated top management including CEO involvement
A final case for recognition:
With the clouds of recession still hovering over some parts of the world economy, Ambica makes a strong case for recognition by saying “Recognition has gained a lot of importance in the post recession world. Many organizations come to us (Mercer Consulting) for help on motivating employees in an age where promotions and salary increases are no longer available levers. In these times, recognition of true performance through both monetary and largely non-monetary ways has led to great success in retaining key talent across several organizations.”
It follows clearly that the advantages of recognition are manifold, from employee satisfaction to employee retention. Anandorup states the example of the recently completed ‘2009 Hewitt Best Employers Study in India’ which found almost 100% of all Best Employers had a structured recognition program. Organizations which fail to implement a system of recognition would do well to learn from a fundamental human truth expressed so eloquently by Suzi Quatro, American singer-songwriter, musician, and actress, which reads:
“As far as more recognition goes, I am happy with the amount of love and respect I have received from other artists and the public. Of course, I would love more, and think I deserve it.”
Akshay Manwani is a freelance writer
