Category All, Best Practices Why Leadership Must be Involved in Employee Recognition Practices Exceptional leaders know that the secret sauce for success is a balancing act between culture and strategy. In this blog post, we’ll show how getting leaders involved with employee recognition practices aids companies’ strategic and cultural goals, and why leading by example is the way to go. February 3, 2023 By Ravijojla Novakovic Introduction Somebody once said that culture eats strategy for breakfast. Even the most carefully planned strategy falls short without the people to carry it through. The recent megatrends in the world of work, such as hyper-personalization, talent shortages, and increased need for employers to think about the wellbeing of their workforce, showed us that culture matters more than ever, and money alone will not keep talent. Organizations introduce recognition practices as a means to encourage a culture of appreciation. Those who use recognition have had a tremendous impact on improving company culture, cultural alignment across divisions, departments, strengthening employee loyalty, reducing turnover, increasing engagement, among other benefits. The ideal scenario for maximizing the impact of recognition practices is when leaders practice recognition together with the employees, embodying company values and leading by example. Strategic Impacts of Recognition on Company Culture Company culture is the critical drive for transformation and organizational agility in times of instability and significant changes. Companies going through mergers, acquisitions, or simply adapting to the ever-changing market demands need recognition as a company practice to support change management. Great, positive company culture keeps talent. In whichever stage of their growth, all companies benefit from an engaged and productive workforce that successfully achieves the company’s goals. We’ve already written about How recognition impacts company culture, and here is a quick recap. 1. Recognition impacts performance Businesses depend on employee performance and productivity, and recognition is one of the low-value investments that can make a considerable impact. According to Bersin by Deloitte, “employee engagement, productivity and performance are 14% higher than in organizations without recognition.” Recognition is tied to company values as means to encourage certain behavior. Most recognition programs are flexible and can accommodate programs with varying KPIs that track performance across multiple dimensions of employee behavior, such as employee engagement, productivity, teamwork, safe and responsible work ethic, excellence, customer satisfaction, quality of work, and more. Depending on companies’ goals, recognition program designers create monetary and/or non-monetary recognition programs focused on the areas companies need to improve or stimulate. For example, a retail company may want to improve its customer satisfaction score. By motivating employees to perform better in a structured and systematic way through a recognition program, companies can set up targets that validate positive employee behavior such as, readiness to go the extra mile, being proactive, innovative, and knowledgeable about how to resolve customers’ issues. Recognition programs can also be tied to various learning programs in a way that helps resolve companies’ long-term talent planning as means to combat skills and talent shortages. → Learn more about How employee recognition improves customer satisfaction 2. Recognition impacts retention and turnover A great EVP is not made of compensation alone. People stay when they are valued for their contribution to company success and when they see a future within the company. To make that future attractive to employees, companies must create a culture of belonging and appreciation, welcoming and supporting employees in their growth. The ultimate goal of recognition, for companies, is to engage employees and build relationships in which employees go beyond ‘I just do my job and that’s it”. According to Josh Bersin, “Employee recognition of “thank you” can drive up to 30% reduction in turnover, and double digit increase in innovation.” Cultivating ‘attitude of gratitude’ behaviors by using recognition programs that scale across departments directly impacts how people feel and their decision to stay with the company. Recognition needs to happen before an employee starts feeling like their contribution doesn’t matter. Therefore, recognition needs to be an essential component of company culture. Companies need to have an ongoing R&R program that encourages frequent, personalized, and public recognition so that employees know how much the companies value them from the start. 3. Great return on investment Calculating the overall ROI on recognition needs to be done holistically because recognition brings value on several dimensions. Firstly, there is money saved on recruiting, onboarding, and training new employees when talent leaves and the turnover is high. There is money gained for increased engagement tracked by various productivity-related KPIs, that flag productivity black holes such as absenteeism and sick days. There are also indirect ways in which employee net promoter score brings substantial value by attracting new employees and strengthening company branding. There’s also money saved on FTE on running recognition programs. A comprehensive R&R solution will include everything from automating welcoming and service anniversary messages, a scalable rewards system calibrated and adapted to the living costs of each country a company operates in, saving extra money on rewards without markups and reward system maintenance and logistics, and so on. → Not sure what a Recognition program can do for you? Access our JobPts Navigator to get orientation. How Leaders Influence Company Culture First things first, let’s define what we mean by leadership. Most people immediately think of the C-level when they think of leadership, which is mostly correct. A leader is a person who is a decision-maker in any given situation. However, when talking about company culture, we soon realize that leaders can also be found in lower ranks, depending on the organization’s hierarchical structure. According to Steve Goldberg: “Line managers are the true stewards of HCM, thus Line Manager Enablement is HCM imperative #1.” In this quote, Mr. Goldberg refers to the fact that line managers across the entire organization chart, from a team lead to CEO – are drivers of company culture, the embodiments of company values, setting an example in practice. Also, that there is no success in people management without empowering line managers to carry the torch of company values and goals. Experts agree on the importance of the managerial role: in Gallup’s State of the Global Workplace report, “a manager’s effect on a workplace is so significant that Gallup can predict 70% of the variance in team engagement just by getting to know the boss.” → Watch the webinar for more Steve Goldberg’s takes on Connecting Employee Experience and Organizational Agility 1. Leaders inspire trust and build relationships Leaders build relationships with employees and inspire a following. To be successful leaders, leaders must make sure that they trust the employees to do their jobs, and the employees need to trust the leaders to steer the company in the right direction. Trust is the main ingredient of a successful relationship between an employer and employees. According to Great Place to Work® Institute, Inc. and its Dimensions of a Great Workplace® model, the basis of cultivating trust in a workplace is made of these three elements: Credibility, Respect and Fairness (the full model also includes Pride and Camaraderie). Credibility refers to leaders being seen as credible, with integrity, competent, and able to integrate employee feedback. Respect is about how respected employees feel by their leaders, and Fairness is about whether employees feel that employers provide equitable and bias-free career and learning opportunities. In Trust Factor: The Science of Creating High-Performance Companies, Paul J. Zak finds that employees working in high-trust companies report a “60% increase in career satisfaction, 50% increase in productivity, and 66% increase in team unity”. These factors all contribute to a positive company culture while serving companies’ strategic goals. 2. Leaders lead by example Leading by example is the surest way to encourage peer recognition and set standards for positive behaviors in a company. To lean on the Great Place for Work’s model on what makes a great workplace, employees need two more elements from an employer: Pride and Camaraderie. In that model, pride refers to employees’ assessment of their personal and team’s impact on company success and pride in the organization itself. Leaders who practice recognition show their employees how their work matters and help them feel purpose and pride in their contribution. By actively participating in public praising practices, leaders also set the tone for peer-to-peer recognition, encouraging employees to recognize each other more, double-whamming on both elements: Pride and Camaraderie. Because employees who recognize each other feel not only proud but also more connected to their work and colleagues at the same time. 3. Leaders grow and develop people Growth happens in the interplay of challenge and confidence. When employees feel accountable, have a clear vision of the outcomes and are invested in improving their daily work, and know how their actions contribute to the company’s success, this ultimately benefits both the employers and the employees. For that to happen, many elements need to be at cross-work with each other to support such a learning, growing culture. Leaders need to trust the employees and vice versa; employees need to be aligned with company culture and be crystally aware of what companies’ goals are and equally motivated to contribute to achieving them. Employees need to be clear about their career paths and feel like the company takes care of growing their skills in a way that benefits both parties. This is another way leaders shape a narrative in which employees see their future in the company and eagerly grow to keep their skill sets on par with the current business challenges. The key driver to support growth is performance management. In the latest HR Predictions for 2023, Josh Bersin shares research findings that high-performing companies hold people accountable and focus on ‘performance enablement’, instead of just ‘year-end reviews’. Employee recognition plays a significant role in serving all these goals because it ties performance to clear outcomes and rewards. When leaders get involved with recognition practices often, they provide clear guidelines which align the workforce and give appreciation where it’s due, thus unifying and strengthening the workforce. 4. Leaders listen to people The best leaders out there constantly evolve, learn about their people, give and take feedback, and, most importantly, apply it to their leadership styles. One key factor that separates great leaders from the best is the ability to evolve according to the changing circumstances to become more effective. According to Bersin’s HR Predictions for 2023 report, “Another key to leadership in 2023 is listening (also called “feedback.”) In a world where hybrid work practices are not clear, we must let employees tell us what they believe will improve productivity. Every new idea for job redesign, team performance, or new work processes is most likely to come from a passionate, well-intended employee.“ Surveys and feedback are major ways leaders can listen in, and this is where leaders can truly capitalize on employee insight. Leaders being held accountable via feedback helps relationship building, demonstrates accountability for trust building, alerts to potential problems in processes, talent issues, and so on. The company benefits when employees’ good ideas get noticed and supported by leaders. But in order for employees to be so highly productive and engaged, there needs to be a culture of openness, allowing different standpoints, and allowing people to make mistakes and learn from them. If there is a lack of feedback towards the leaders, or if peoples’ survey responses show signs of low engagement, leaders may need to consider whether the employees are afraid of sharing their opinion. This kind of leadership style stifles growth. 5. Leaders take employees’ whole wellbeing into account Empathy is the leadership style and soft skill many experts agree that is a must-have in today’s corporate environments. CEOs being involved in targeting employees’ wellbeing is a byproduct of wellbeing becoming a strategic goal for companies concerned with corporate growth. On a team level, line managers play a crucial role in managing employee wellbeing, as they are the ones who work most closely with employees and can take measures based on their interaction. Josh Bersin introduces the concept of people sustainability as a new and improved term for enhanced employee experience. The latest and evolved concept encapsulates a more wholesome approach to the living realities of employees, including topics such as DEI, benefits, health and safety, and employee experience. Bersin wraps all these programs into ‘long-term sustainability’. The premise of the modern workplace is as follows: in order for employees to be loyal, engaged, and productive, they need to feel a strong, supportive and equitable system coming from their employers. Companies can serve this mainly in the shape of well-crafted total rewards packages, and cultivating a positive company culture that supports employee wellbeing from multiple aspects, be it financial, social, physical, or mental. 6. Leaders are catalysts for change In times of significant changes, it matters how leaders shape the narrative about the company’s future. Straightforward and immediate communication is vital here, and keeping the company’s culture in mind, leaders need to do the change they want to see. Mergers and acquisitions call for even more detailed guidelines on what’s happening. Employees are worried at times of change, and leaders need to communicate safety if they don’t want to see talent raising sails. Gallup finds that during mergers and acquisitions, companies focus on gathering the top leaders. However, 47% of key employees leave a company within a year of the transaction, and 75% leave within the first three years. This suggests that leaders need to focus on keeping all the key players and top talent to include and rebuild the new culture. So, in addition to carefully balancing strategy and culture, change management is another highly sought leadership skill. Leaders who, for example, oppose a necessary change stifle company growth. In contrast, leaders who inspire and embody the new culture and know how to weather shifting priorities use change as a chance to evolve. Josh Bersin summarizes this succinctly: “Leadership is also inseparably linked with culture. Leaders set the tone for behaviors, priorities, and values. Therefore, we must build a leadership framework that embraces and reinforces our culture.” How Can Leaders Get Involved in Employee Recognition Practices When it comes to recognizing practices, there are a few simple rules that guarantee a better impact of recognition on whatever KPIs an organization chooses. Employee recognition should be immediate – given as soon as possible after a successful project or activity, specific – because people value hearing their work is noticed and celebrated, and public, because validation inspires employees to do more of the same and set an example at the same time. Additionally, leaders can get involved in employee recognition practices by: Communicating guidelines to employees The adoption of a recognition program matters for hitting the KPIs a company wants to target. When employees know why and how to engage in peer-to-peer recognition practices, they will use this function to serve the company’s goals. Leading by example, putting recognition into practice Regularly recognizing employees shows a leader who can walk their talk and has the integrity to value excellent work and the people who contribute. It sets the tone for how recognition should be practiced. Leaders can also help design and participate in specific recognition programs in which C-level leadership’s involvement is key. This type of program would be the most prestigious and visible recognition program across the company, celebrating the individuals and teams who set the standard for excellence. Deciding to recognize key achievements regularly Recognition is a commitment, but thankfully, it can be done swiftly, and it does not take much time. Recognition programs are often integrated with Outlook, Facebook Workzone, Slack, Microsoft Teams, making recognition easily accessible and non-disruptive to a leader’s workflow. Forming strategic input on how recognition programs target KPIs A leader may anticipate issues down the line and see how recognition programs can be tweaked to serve the company’s goals better. Delegate recognition officers Selecting the key players means finding the people with the passion for driving the project further. Holding people accountable and enabling their ownership of projects, delegating recognition officers helps leaders stay on top of things while increasing employees’ sense of purpose and engagement. Help promote or allocate budget for new recognition programs A sure way to help boost the adoption of the recognition program is to have it announced and advertised before the go-live, and this may need budget allocations. Aside from communicating the guidelines and expectations of recognition programs to employees, a company may want to also externally state that they are adopting a new recognition program, as a means to support the company’s branding and help attract new talent. Use recognition data in performance management Recognition solutions keep intricate analytics that show the ability of managers to recognize their team. This informs leaders how well the company values are being communicated and whether there are managers who do not recognize people enough, and see potential threats arising from that and use performance management to correct it. What Recognition & Rewards programs are ideal for your organization? Try the JobPts Navigator. Final Words The most successful and agile companies are spearheaded by leaders who balance between strategy and culture. Company culture is a driver for transformation and employee and company growth when leaders get involved with employee recognition practices. Because of all the benefits that recognition brings to the workforce, including improved engagement, productivity, lessened turnover, enhanced employee experience, and improved company culture, leaders can and should invest into treating recognition as a vehicle to serving company cultural and strategic goals , and by embodying recognition practices, bringing about an attitude of gratitude across a thriving workforce.
