Developing an Employee Recognition Program

Michael Gallagher, .

clapping handsTELUS Communications, a leading Canadian telecommunications company, was named one of Canada’s best employers in 2011. In fact, TELUS’s employee recognition program has been recognized as one of the most effective in the country, earning the Recognition Professionals International (RPI) Best Practices Overall award for their innovative Bravo program. Kendra Innes, leader of TELUS’s recognition team, says, “Providing valued and meaningful recognition, both formal and informal, is key to capturing the discretionary efforts of our employees. It encourages them to do the right things for customers at the right time, ultimately increasing shareholder value.”

The Value of Appreciation

I would argue that most employers do understand the value of making employees feel appreciated and valued. As Ms. Innes indicates, it is in their best interests to do so! But I would also contend that many employers do not know how to show appreciation. Richard White, vice president of Brand and Marketing Management at Scotiabank, offers a terrific example. One day, a senior sales exec said, “Rick, this is what it’s like being on the sales side” of the employee recognition program: he opened a bag full of tennis balls and started throwing them at White.

Scotiabank’s recognition system was fragmented, all over the place, and, often, seemingly arbitrary. They were spending $6 million a year in contests and incentives, but this money was managed by eight different business lines, each with two or three different types of programs. White says, “It became apparent that sometimes winners didn’t even know why they had won.” The money was no doubt welcomed, but it wasn’t tied to recognition and thus ineffective.

Recognition vs. Rewards

Scotiabank revamped its employee recognition strategy and created Applause. This program offers a coherent system of appreciation so employees know why they are being recognized. There are prizes, including cash, points for rewards catalogues, and gift cards. The cornerstone, though, is peer recognition, which is one of the reasons Scotiabank is now consistently ranked as one of the best employers in Canada.

A survey conducted by the International Association of Administrative Professionals and OfficeTeam found a big disconnect between how employees and their employers view recognition. Employees would rather have an in-person thank you or a job well done reported to a supervisor. Money and gifts are nearly always a good idea, but they aren’t enough to make employees feel valued and appreciated. A McKinsey Quarterly survey (2009) found non-cash motivators, specifically praise from immediate managers, leadership attention, and the opportunity to lead projects were as or more effective than cash bonuses, increased pay, or stock options.

Says Debra Condren, business psychologist “Especially during tough economic periods, it’s important to give people face time and basic human appreciation on a regular basis.”

Balancing Praise and Criticism

But in business managers will undoubtedly have to offer criticism. Establishing an environment in which employees feel valued actually helps with this, too. Instead of approaching people only to point out what is wrong, building that value-based relationship helps all feedback – including criticism – become part of the culture. Speaking to people only to find fault is a poor management strategy, and you will find yourself with dissatisfied staff which in turn impacts productivity, initiative, creativity, confidence, and the desire to do well. It may also cost you your most valuable employees, the ones with the option to move to the competition in hope of feeling more valued.

There is no negative side to being appreciative on a personal level, and among the many benefits is it could be contagious. The whole team will find ways to support each other and say thank you. No, it doesn’t mean every day is a picnic, but it may help you weather challenges more effectively, retain your best people, and create a more productive environment.

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Michael Gallagher

Mike Gallagher, President of Michael Gallagher Advisory, has spent the past 20 years helping small business owners and managers develop and implement strategic business plans, achieve sustainable, targeted growth and solve the problems that keep them up at night.