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Best practices for building an employee recognition program

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A group of business people clapping in front of a window during an employee recognition program.

Employee recognition programs: The smart approach

Recognition isn’t just about rewards; it’s about acknowledging contributions and fostering a sense of belonging.

So how do you go about building a recognition and rewards scheme that actually works?

Taking the right approach as a leader requires getting good at informal recognition, as well as developing more formal recognition structures, which technology can make easier.

But before you create your scheme, it’s important to decide on your goals for it and choose your approach.

We recommend that you heavily involve your employees in the development process, and keep everyone informed as the structure unfolds.

A blueprint for an effective employee recognition program

Watch the video to understand the keys to building an employee recognition program that works, including leadership styles and development approaches.

Step 4 - Effective recognition programs require good leadership

If you know of anyone who would benefit from this video, please share it with them.

Video transcript

Hi, Andrew from SACS, and this is video number five in our five video series about optimum employee recognition, where we take an evidence-based perspective on what makes employee recognition really work.

So in this fifth video, we’re going to focus on the question of how to build employee recognition programs, particularly empowering employee recognition programs.

So you see the issues that we’ve dealt with so far.

We’ve started out by talking in video number one why people need recognition.

Video number two we put the business case, how recognition can help an organisation to achieve its goals.

In video number three, we looked at forms of recognition.

Video number four, we talked about the leadership skills necessary for recognition, and we’re going to touch on that again very briefly in this video.

The best leadership style for creating a recognition program

But the last one here is about using a technique called facilitative leadership to build a recognition program.

And just to focus on what we need to cover in this, the first thing we want to talk about is an informal recognition program, and that’s where every leader and I did show this slide in the last video.

But to those of you who didn’t see the last video, what I talked about is that there are four key leader behaviours which give a clue to effective staff recognition because these are four leader behaviours that help people to be engaged.

So good recognition should be empowering, and you’ll see that when we talk about formal methods of recognition, we’re recommending empowering people to be part of the decision.

The more you make it a totally top-down leader led process, the less likely it is to be optimally effective.

Second thing, we said that optimism and positivity is important.

So people who are contributing to the future should be the ones who get some of the recognition.

People who are making the organisation a better place.

Those are the kinds of things that causes people to feel that optimism is valid in this environment, but also that the organisation is sponsoring optimism.

The third is about being supportive, and recognition is of course, of its very nature supportive.

But one of the things that can be really helpful is to have recognition programs that sponsor support and recognition of people who are sponsoring and supporting others.

In other words, people who are standing behind their colleagues, people who are helping their colleagues to succeed.

That’s a really powerful form of recognition.

And finally, helping people to learn.

So we said in the previous videos that it’s a really good thing that if leadership development programs teach leaders how to cause people to learn, then that’s a very powerful thing in terms of causing positive corporate culture.

The power of informal recognition

So the most powerful form of recognition that can apply in any organisation is informal recognition from leaders in their local work groups.

Now this is a situation where I catch my staff doing something right.

People who are in each work group are finding a way to recognise the good performances.

Have you ever heard people say I only ever hear anything when I’ve done something wrong, or I’ve let a deadline slip, or I’ve behaved in a way that the boss doesn’t like?

We’ve got to turn that around because corporate culture is about the balance of positive experiences and negative experiences.

And I’ve mentioned elsewhere in this sequence of videos that a ratio of about five to six to one appears to be what you need to have a healthy corporate culture.

So recognition is a very positive characteristic.

In video one, I showed that the human brain needs this recognition process.

So the most powerful thing you can do is to have informal recognition with every leader doing it.

Now in various versions of this presentation I run a poll to ask people whether people have been trained how to do this.

And of course, most leaders are not trained how to do this.

It’s just assumed that they know how to do it, or the organisation hasn’t taken a perspective on the issue, or something of that nature.

But informal recognition is the most powerful thing you can do, but that doesn’t mean that formal recognition has no place.

How to approach formal recognition

So one of the things that you might consider is whether you’re prepared to embark on a formal recognition process.

And if so, are you prepared to back it with some sort of technology?

Now, this technology is from a company called Brownie Points.

Brownie Points is an Australian company, and SACS has recommended people to Brownie Points in the past, largely because we’ve done market reviews of providers of these sort of services.

Brownie Points gets the job done, it’s quite affordable, and it has some good options.

So we don’t have any affiliation with Brownie Points but we have recommended Brownie Points to clients in the past.

There are a stack of others so check the market out if you want to, but Brownie Points has the capacity for an individual, this individual is called Anthony, although I must say he looks like somebody else (refer to the video).

And what it shows is the number of points that Anthony has had voted to him.

Now the way this works is Brownie Points gives the opportunity for employees to vote points to other employees.

Sometimes with the approval of a leader, sometimes with total self-determination, and it’s up to the organisation to decide this sort of stuff.

But Brownie Points gives people an opportunity to readily recognise other people.

And once you’ve set this structure up, you can make these brownie points purely theoretical, or you can make them actually be redeemable.

Using technology to grant rewards to employees

So you see Anthony’s got 323 points, and so where you see there’s catalogue here.

Now the catalogue would provide people with an option for a whole range of different potential benefits.

It could be education.

So once I get to a certain number of points, it gives me an opportunity to go on a course.

It could be to do with charity.

So once I get to a certain number of points, that is dollars that I can choose to allocate to my favourite charity.

It could be goods.

I once talked to a provider of these kinds of services and he said toasters were very popular, which surprised me, but it could be anything.

It could be experiences.

So you might get something equivalent to a Red Balloon voucher, which means that you can go ballooning, or out for dinner, or whatever.

Anyway, the point is points sometimes are purely and simply a warm feeling, and sometimes they can actually buy something.

But the point of using technology is whether you have actual quantitative rewards, tangible rewards, or not.

Good technology just makes it easy to do this stuff, and we’ve certainly seen a number of organisations benefit from the capacity to say, hey, Mary Smith from the Sydney office did something for me.

Maybe I’m just going to send her a thank you card on Brownie Points or some similar software.

Making recognition public and constant

That’s something that’s immediate, but as well as that, if you look at what we’ve got here, we’ve got this thing called a recognition wall, and what that does is it allows you to see on a day-to-day basis who has been recognised by whom and for what.

And so that’s a wonderful thing so that people see that, and also it provides organisations the opportunity to report this kind of thing.

So I think many organisations that have tried to run formal recognition programs have struggled with the administration of it.

Technologies like this can help.

Now once you’ve got the technology, you have to decide how you’re going to set one of these things up, and here are three leadership options associated with such a thing.

Three ways for leaders to create recognition schemes

You can be top down.

Now a top down approach would be where somebody in authority, maybe the executive team, says here’s our recognition scheme, here’s how it’s going to work.

So that’s option number one.

Option number two is consultation, where somebody in authority goes and asks people, hey Mary, hey Bill, hey John.

Who do you think?

What do you think?

How should we set this thing up?

And then we go back to our office and make our decision.

That’s consultation.

Facilitation is where you would get a group of employees together, and you would facilitate them by letting them know what their options are.

And then from there, they decide what the recognition program should be like.

And that’s my favourite option.

When I’ve done this for organisations, that’s typically how I’ve done it.

Get a group of people together, and I’m going to suggest an elected or nominated group of people together, and then run them through a process where they decide.

The levels of engagement of such a recognition program are vastly higher than a leader-imposed program.

Even though it might be very cleverly devised, the fact that they’ve been involved in the formation of it, of course means that they’re much more engaged with the process than they otherwise would be.

Setting your goals for a recognition program

So suggestions for design.

Well, I think one of the things that you’re going to have to do in any organisation.

So there is a top down element to this.

Whoever is leading this, whoever is the chief executive, or the director of human resources, or whatever, the organisation needs, if they’re going to embark on such a process, to decide strategically what they’re trying to achieve out of this.

Is it growth?

Is it profit?

Is it some combination of the two?

Is it customer satisfaction?

Because a recognition program should be tailored to the goals that it’s trying to achieve.

Now once you’ve decided what goals you’re trying to achieve, then of course what you can do is build a governance group to run the project, and the governance group will ensure that the project achieves what it needs to, and you might decide a set of ground rules such as budget where the staff contributions need to be signed off.

Staff contributions in the sense of I will give points to Mary Smith.

Do I have the right to do that by myself, or does that need to be signed off by bosses to ensure that there’s no kind of collusion here or something like that?

Ensuring staff representation and engagement

And then we would suggest the development of a representative staff advisory group.

So a governance group to get it going, and then a representative staff advisory group.

Nominees, not volunteers.

Now you might wonder why I say this, but the essence of it is that volunteers are of their very nature unrepresentative of their colleagues.

Now you can prove this easily because in an organisation of a thousand people, if you ask for a group of volunteers who will help you to build an employee recognition program, what you’ll tend to get is the people who volunteer a lot, people who don’t like their jobs, people who’ve got an axe to grind.

They are, of their intrinsic nature, not representative of their colleagues.

And quite often, a very limited number.

People have often been surprised by running these sorts of programs.

Hey, who wants to be involved?

And in an organisation of a thousand people, they’ll get 10 or 15 or something like that.

The alternative is to run a nomination process.

So you send a communication out to everybody saying we’re going to do this.

Please nominate somebody who you trust to be involved in building this program.

Works brilliantly because what you end up with is something like this.

An elected group of representative staff.

So you get senior people, you get middle level people, you get staff who are relatively less senior, and usually more or less in proportion with the levels within the organisation.

But you’ll get an additional benefit because you’ll get representatives from every geographical site that you have in your organisation.

Designing an effective recognition program

Now once you get this representative group, then you lead them through a process of deciding how this scheme will be designed.

And so that might involve elements such as you’ve given them the ground rules, the not negotiables, you’ve facilitated them to set a destination.

So well, one of the things that’s really useful in any change process is to get the group to decide “”What does success look like?”” You know, if we build a really good recognition program, what would it be like, what would it achieve, what would it feel like?

And using a kind of a words and phrases exercise, you can distil six, seven themes from a group of a hundred, 200 people if necessary.

And that’s your destination that you are heading towards.

Now once you’ve got those ideal destination components, so it might be egalitarian, it might be something that’s going to contribute to the community, I’m making this up, but it could be any of these characteristics.

Once you’ve got those characteristics, then the group that you are facilitated come up with the scheme, you need to remind them of the destination that they set from time to time.

And then you lead them through a process where they’d answer questions such as, what do they consider recognition should be for?

What do they think is important?

Ask them what kind of rewards would be most motivational?

Thank you’s, toasters, travel, education, et cetera.

Maybe get them to name it.

Phoenix Award, well, I’ve seen a couple of those.

But timing.

Should it be annual, should it be ongoing, should it be project-based?

And project-based would mean, okay, we’re doing some big change process.

So let’s have a recognition process specifically for this.

And then there are some further considerations.

You may need a governance process.

So you’ve gone down the path of having a points based system whether it results in tangible rewards or not.

Do you need to decide whether the staff have a right to award without any kind of control?

Or does this need sign off from some senior management group?

Or perhaps the leaders will award it?

Keeping everyone involved in the process

And once you’ve got this thing running, then of course it’s a great idea of building and publicising a project plan.

Keeping people informed about progress.

So using people power to build this kind of a scheme is an incredibly smart thing to do.

Firstly, it takes the burden of responsibility off leaders, but secondly, it results in a process which is going to be far more attractive from the point of view of engagement.

Far higher levels of energy and enthusiasm for people to be involved in this.

So just to summarise what it is that we’ve covered in this presentation.

Firstly, humans need recognition.

It’s not a maybe.

Human beings need to feel welcomed, and they need to feel that they belong to a group, and recognition can be part of that.

Secondly, the business benefits from good recognition.

Recognition is something that will improve your bottom line if that’s what you’re keen on.

Or if it’s stakeholder satisfaction, it certainly can help with all of those sorts of outcomes.

Recognition can take many forms, and you’ll need to decide the form that works best for you.

I think leadership development is important.

There are skills of leaders in doing this stuff well.

Finally, if you build a formal recognition scheme, please I would recommend that you make it as empowering as possible because if you cause the people to be involved in building it, it’s going to be far more effective.

Thanks very much for listening, and I hope these videos have been some benefit to you.

Create an effective employee recognition program

Step 4 - Effective recognition programs require good leadership

If you’d like some help with creating an effective employee recognition program, based on your workplace and staff, contact us about our Employee Engagement and Wellbeing surveys.

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