how performance recognition impacts innovation and employee engagement

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HOW Impacts Innovation & Employee Engagement PERFORMANCE RECOGNITION

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What is a big company without a solid set of employees? How would Google, Microsoft, or Amazon function if they were run by one man behind a computer? The answer might be, they would function quite well for awhile—after all, that is how most of the biggest companies are started. But what about once they pick up? Once Amazon started shipping packages to millions of people across the world, it might not have worked quite as well with one man in his garage. At the core, a company’s employees are everything. They are the ones that keep things running, that make the company what it is—whether good or bad. So it is only common decency that you should reward them with the due amount of respect and recognition that they deserve. But it is more than common decency that makes performance recognition a crucial facet of any successful business. As you can see from the slides, there is a lot of research that has proven the effect of proper employee recognition programs on things such as employee engagement, drive, work relationships, and employee retention (to name just a few). For more information, take a glance through the slides and see for yourself—happy employees make for a happy business.

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Page 1: How performance recognition impacts innovation and employee engagement

HOW

Impacts Innovation & Employee Engagement

PERFORMANCERECOGNITION

Page 2: How performance recognition impacts innovation and employee engagement

T H I N K A B O U T T H E L A S T T I M E

S O M E O N E YO U W O R K W I T H TO L D YO U ,

HOW DID IT MAKE YOU FEEL?

“GREAT JOB!”

Page 3: How performance recognition impacts innovation and employee engagement

FOR MOST OF US,

SINCERE RECOGNITION CAN BE A

WHETHER IN

POWERFULMOTIVATOR

TO REDOUBLE OUR EFFORTS

AND STRIVE FOR EVEN GREATER

PERFORMANCE IN THE FUTURE

SPORTS , AMONG OUR FAMILIES , OR AT WORK .

Page 4: How performance recognition impacts innovation and employee engagement

IN FACT,STUDIES SHOW who receive recognition

are more l ikely to be highly engaged.

EMPLOYEES

ARE MORE LIKELY TO PERFORM AT THEIR BEST

WAYS TO IMPROVE THEIR COMPANY.

MORE LIKELY TO DEVELOP

AND AS A RESULT,

&INNOVATIVE

Page 5: How performance recognition impacts innovation and employee engagement

WE WILL LOOK AT TWO DIFFERENTTYPES OF PERFORMANCE RECOGNITION:

ONGOING EFFORT:This is typical ly informal, casual , and more frequent recognit ion, typical ly del ivered in the form of a written note, an email , or a sincere thank you.

ABOVE AND BEYONDPERFORMANCE:

This type of recognit ion is typical ly more formal and tied to a more signif icant achievement. It is frequently accompanied by announcement to the team or company and/or an award item.

21

Page 6: How performance recognition impacts innovation and employee engagement

how performance recognition impacts your employee’s engagement, innovation, and output.

LET’S EXPLORE

Page 7: How performance recognition impacts innovation and employee engagement

ENGAGEMENT

Page 8: How performance recognition impacts innovation and employee engagement

IN THE LAST FEW YEARS,

A RECURRING FOCUS OF DISCUSSIONSOF BUSINESS PERFORMANCE HAS BEEN

INCREASING EMPLOYEE

Page 9: How performance recognition impacts innovation and employee engagement

AVG. SHAREHOLDER’S RETURN %

EMPLOYEE ENGAGEMENT %

60-70

24.2

49-60

9.1

>25

-

While definit ions of engagement abound, the crux of the idea is simple - when employees are more fulf i l led in their work and committed to their colleagues and company, they (and the company) wil l perform better.

2004 Hewitt Associates, Employee Engagement at Double-Digit Growth Companies

Page 10: How performance recognition impacts innovation and employee engagement

AS A RESULTcompanies are investing heavilyin a variety of ways to increase

employee engagement.

Page 11: How performance recognition impacts innovation and employee engagement

O N E O F T H E M O S T E F F E C T I V E

WAY S TO I N C R E A S E E N G A G E M E N T

IN BOTH FORMAL ANDINFORMAL WAYS.

is simply to recognize employees for their performance,

Page 12: How performance recognition impacts innovation and employee engagement

RECOGNITION ACROSS FOURCOMPONENTS OF ENGAGEMENT:

WHEN COMPANIESFOCUS ON RECOGNITION

PERCENT OF EMPLOYEESWHO ARE HIGHLY ENGAGED

DRIVE & DETERMINATION

WHEN COMPANIESDON’T CARE

89%

44%

Page 13: How performance recognition impacts innovation and employee engagement

RECOGNITION ACROSS FOURCOMPONENTS OF ENGAGEMENT:

WHEN COMPANIESFOCUS ON RECOGNITION

PERCENT OF EMPLOYEESWHO ARE HIGHLY ENGAGED

COMPANY CONNECTION

WHEN COMPANIESDON’T CARE

81%

35%

Page 14: How performance recognition impacts innovation and employee engagement

RECOGNITION ACROSS FOURCOMPONENTS OF ENGAGEMENT:

WHEN COMPANIESFOCUS ON RECOGNITION

PERCENT OF EMPLOYEESWHO ARE HIGHLY ENGAGED

WORK RELATIONSHIPS

WHEN COMPANIESDON’T CARE

78%

35%

Page 15: How performance recognition impacts innovation and employee engagement

RECOGNITION ACROSS FOURCOMPONENTS OF ENGAGEMENT:

WHEN COMPANIESFOCUS ON RECOGNITION

PERCENT OF EMPLOYEESWHO ARE HIGHLY ENGAGED

PERSONAL STANDING

WHEN COMPANIESDON’T CARE

76%

28%

Page 16: How performance recognition impacts innovation and employee engagement

WHEN LOOKING ACROSS THESE FOUR DIMENSIONS,

DRIVE &DETERMINATION

COMPANYCONNECTION

WORKRELATIONSHIPS

PERSONALSTANDING

there is a stark difference in the engagement levels of those who receive recognit ion with those who do not.

Page 17: How performance recognition impacts innovation and employee engagement

MORE THAN TWICE AS MANYEMPLOYEES ARE HIGHLY ENGAGED

among those who receive performance recognit ion compared to those who do not.

Page 18: How performance recognition impacts innovation and employee engagement

COMPANIES WITHSTRONG RECOGNITION

PERCENT OF EMPLOYEESWHO ARE HIGHLY ENGAGED

RECOGNITION AND ENGAGEMENT

COMPANIES WITH WEAK RECOGNITION

78%

34%

Page 19: How performance recognition impacts innovation and employee engagement

A good example of this is seen in

the relationship between managers

and those they directly oversee.

Page 20: How performance recognition impacts innovation and employee engagement

AMONG THOSE WHO RECEIVE

STRONG PERFORMANCE RECOGNITION

Great job!

87%say they have a strong relationship

with their direct managers

AMONG THOSE WHO RECEIVE

WEAK PERFORMANCE RECOGNITION

...

51%say they have a strong relationship

with their direct managers

Page 21: How performance recognition impacts innovation and employee engagement

Great job!

IN ADDITION,

82% of managers who recognize their employees’ performance more than once a month

REPORT HAVING GOOD RELATIONSHIPS WITH THEM.

FREQUENTRECOGNITION

Page 22: How performance recognition impacts innovation and employee engagement

Great job!

IN CONTRAST,

only 63% of managers who recognize performance less frequently

REPORT HAVING GOOD RELATIONSHIPS WITH THEM.

INFREQUENTRECOGNITION

UNFORTUNATELY, OF MANAGERS REPORT THAT THEY INFREQUENTLY RECOGNIZE THEIR TEAM MEMBERS’ PERFORMANCE.39%

Page 23: How performance recognition impacts innovation and employee engagement

While it’s certainly possible that

RECOGNITION IS A RESULT OF

GOOD RELATIONSHIPS(and good managers),

THE OPPOSITE IS CLEARLY ALSO TRUE

Page 24: How performance recognition impacts innovation and employee engagement

INCREASED PERFORMANCE

RECOGNITION APPEARS TO BE

ONE OF THE MOSTEFFECTIVE WAYS

to improve relationships between managers and employees.

Page 25: How performance recognition impacts innovation and employee engagement

employees believe either type of recognitionis much more important than a cash bonus.

IN FACT,

>

Page 26: How performance recognition impacts innovation and employee engagement

5% SALARYBONUS

ABOVE & BEYONDRECOGNITION

ONGOING EFFORTRECOGNITION

28%22%

50%

EMPLOYEE/MANAGER RELATIONSHIPS AREIMPROVED BY PERFORMANCE RECOGNITION

EMPLOYEES CHOICE OF WHICH BENEFIT WOULD

MOST IMPROVE THEIR RELATIONSHIP WITH THEIR DIRECT MANAGER.

Page 27: How performance recognition impacts innovation and employee engagement

PERFORMANCE RECOGNITIONFUELS EMPLOYEE INNOVATION

Page 28: How performance recognition impacts innovation and employee engagement

?HOW DOES THAT AFFECT

EMPLOYEE AND COMPANY

PERFORMANCE

SO, IF EMPLOYEE ENGAGEMENTincreases with strong performance recognition,

Page 29: How performance recognition impacts innovation and employee engagement

THE FIRST MAJOR EFFECTTHAT RECOGNITION HAS ON PERFORMANCE

DRIVING INNOVATIONA top priority for successful

executives everywhere.

Page 30: How performance recognition impacts innovation and employee engagement

EMPLOYEES GENERATED IN THE LAST

MONTH TO IMPROVE THEIR COMPANY’S

PRODUCTS, SERVICES, OR SYSTEMS

THE RESPONSES WERE COMPELLING.

When asked how many new ideas

Page 31: How performance recognition impacts innovation and employee engagement

Employees receiving strong recognition generate

nearly twice as many innovative ideas each month.

THE RESPONSES?

EMPLOYEES RECEIVINGSTRONG RECOGNITION

EMPLOYEES RECEIVINGWEAK RECOGNITION

1.8 NEW IDEAS per month

to help improve their company

3 NEW IDEAS per month

to help improve their company

Page 32: How performance recognition impacts innovation and employee engagement

Employees will proactively seek new ways to improve efficiency at their

company when they receive strong performance recognition.

IN ADDITION,

EMPLOYEES RECEIVINGSTRONG RECOGNITION

EMPLOYEES RECEIVINGWEAK RECOGNITION

54%seek new ways to improve efficiency

87%seek new ways to improve efficiency

Page 33: How performance recognition impacts innovation and employee engagement

We found that recognit ion can be a powerful driver of continual improvement.

While there are many factors that go into an individual ’s or a company’s abil ity to innovate,

Page 34: How performance recognition impacts innovation and employee engagement

5% SALARYBONUS

ABOVE & BEYONDRECOGNITION

ONGOING EFFORTRECOGNITION

41%32% 27%

EMPLOYEE INNOVATION ISIMPROVED BY PERFORMANCE RECOGNITION

EMPLOYEES CHOICE OF WHICH BENEFIT WOULD

MOST IMPROVE THEIR INNOVATION FOR THE COMPANY.

Page 35: How performance recognition impacts innovation and employee engagement

PERFORMANCE RECOGNITIONFUELS EMPLOYEE OUTPUT

Page 36: How performance recognition impacts innovation and employee engagement

THE SECOND MAJOR EFFECTTHAT RECOGNITION HAS ON PERFORMANCE

WORKING AT MAXIMUM CAPACITYIncreasing employees’ wil l ingness to

work at their best.

Page 37: How performance recognition impacts innovation and employee engagement

COMPANIES WITHSTRONG RECOGNITION

PERCENT OF EMPLOYEES WORKINGAT 90% CAPACITY OR ABOVE

EMPLOYEE & TEAM OUTPUT

COMPANIES WITH WEAK RECOGNITION

53%40%

Page 38: How performance recognition impacts innovation and employee engagement

EXPECTATIONS

Page 39: How performance recognition impacts innovation and employee engagement

Employees have a wide variety of expectations

ABOUT THE FREQUENCY AND NATURE

OF RECOGNITION

Page 40: How performance recognition impacts innovation and employee engagement

IDEAL PERFORMANCE RECOGNITION FREQUENCY

MULTIPLE TIMES A WEEK 9%

ONCE A WEEK 11%

MULTIPLE TIMES A MONTH 19%

ONCE A MONTH 26%

ONCE A QUARTER 20%

ONCE EVERY 6 MONTHS 7%

ONCE A YEAR 9%

Page 41: How performance recognition impacts innovation and employee engagement

HE/SHE SHOULD RECOGNIZE HIS/HER

EMPLOYEES

HOW IS A MANAGERsupposed to know how often

Page 42: How performance recognition impacts innovation and employee engagement

thoughtful ly combining frequent andinformal recognition for “ongoing effort”

with less frequent but more meaningfulrecognition of “above and beyond performance.”

THE ANSWER

+

Page 43: How performance recognition impacts innovation and employee engagement

ONGOING EFFORT,

especial ly when provided frequently and

sincerely , can be used to recognize l itt le wins

and encourage employees to keep going.

Page 44: How performance recognition impacts innovation and employee engagement

ON THE OTHER HAND,

recognizing employees less frequently but

with more formality for above and beyond

performance sets apart the most signif icant

achievements in a unique and social way.

Page 45: How performance recognition impacts innovation and employee engagement

that both types of recognition are important andshould be used in deliberate and complementary ways.

RESEARCH SHOWS

+