Flying high in a turbulent economy

Why great companies keep their recognition programs in hard times
By Adrian Gostick
|Canadian HR Reporter|Last Updated: 01/30/2002

Many organizations are traveling light these days. In response to the soft economy, they’ve cut perks, cut expenses and even cut people. But cut recognition — and you cut your organization off at the knees.

Recognition is what lifts and inspires employees to new heights. It’s what keeps them moving toward a company’s goals. It’s the one thing organizations should absolutely keep when it comes time to cut expenses.

Tom Donald, author of

Thrice is Nice: Three ways to Succeed During a Downturn

, got it right when he said, “If you want people to work harder, better and longer, you have to thank them verbally and crank up your recognition and incentive programs. If they feel valued, workers will go to the ends of the earth to help you succeed.”

Here are a few reasons why recognition helps a company soar — even in turbulent economic times.

Keep top guns: For a company that’s caught in a downward draft — or even one that’s seems chronically leveled out — the way up is through energized employees.

Every organization, whether in a recession or in a boom, needs people who create value. Recognition is one of the most effective ways to keep these valuable performers from abandoning ship.

Stay on course: By strategically rewarding people for goals that are important to an organization, employees remain focused on critical activities. It’s harder for employees to get waylaid on nonessential functions when a recognition program has set a clear course to success.

Establish a high attitude level: Not every employee is a top gun. But that doesn’t mean they can’t function at their top level. Unfortunately, during economic difficulties, too many companies treat rank-and-file employees like baggage: necessary, but a burden.

Companies that outperform their peers give their entire workforce the “first-class treatment” through effective recognition programs. In return, they get results that leave the competition in the dust. In fact, in one study of 551 large companies, firms that had an effective way to recognize their people outperformed those that didn’t by a two-to-one margin (Forbes, July 3, 2000).

Reach goals: Of course, business goals become even more important in a soft economy. Great companies like G.E., Fairmont Hotels, Sears Canada, Johnson & Johnson, Tricon and others use their recognition programs in tough times to improve performance, boost sales quotas and increase customer-service ratings.

Companies that are successful over the long haul have well-defined recognition strategies, and believe strategic recognition and rewards are keys to getting where they want to go.

Continuing, or beginning, a recognition program in uncertain times may seem difficult. After all, it’s hard to recognize and reward employees when the economy is hurting the bottom line.

But recognition proves itself in both small businesses and large, during periods of growth, as well as during downsizing, and it may be even more valuable in a down economy than in a buoyant one.

The Sept. 11 tragedy put things in perspective for many North American businesses. Since then, we have been reminded that companies are comprised of living, feeling human beings who more than ever must be lead, motivated and inspired. The job of manager has never been more important. It has also never been harder. Managers have the responsibility to lead a group of people who will spend a large part of their lives at work. Employees time on the job must be as productive and positive as possible. Employers must strategically recognize and truly value the people who create value.

If we do it right, if we care enough to recognize and reward our people, we will emerge from this tragedy stronger than we entered. Isn’t it time you led your company to new heights?

Adrian Gostick is director of marketing and corporate communication with recognition firm O.C. Tanner and author of Managing with Carrots: Using Recognition to Attract and Retain the Best People. He can be contacted at adrian.gostick@octanner.com.

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