Without controls peer recognition collapses into a free-for-all

By Gary Beckstrand
|Canadian HR Reporter|Last Updated: 03/10/2003

If at first you don’t succeed…try, try, again. Some people call that wisdom; great leaders call it a waste of time. Here’s a better piece of advice: Do it right the first time.

And when you’re talking about peer-to-peer employee recognition, there’s no better insurance a program will work — the first time — than program integrity.

Setting up proper procedures and controls for a recognition program eliminates management worries about employees “cheating the system” or failing to recognize the proper behaviours — worries that often keep many companies from establishing employee recognition programs and from reaping the benefits of better employee morale, productivity and retention.

“Increasing employee recognition efforts is proving to be a cost-effective way to keep workers motivated and productive during tough economic times,” said Adrian Gostick, author of

Managing with Carrots.

“But some organizations are hesitant to allocate valuable resources because of concerns about the integrity of their programs. They want to make sure that their employees are recognized for going above and beyond rather than merely doing what is already expected. Another concern is that some employees might find ways to ‘beat the system,’ wasting precious budget dollars and lining their own pockets.”

The following tried-and-true steps will ensure your recognition program has integrity — and the ability — to push your company toward its goals.

Here’s something most know, but sometimes forget: As a rule, employees want to meet expectations. When they fail, it’s usually because management hasn’t clearly defined its goals. After all, it’s hard to hit a moving target. So make sure peer-to-peer recognition program criteria are extremely clear.

It’s not enough to say employees should recognize only above-and-beyond efforts. HR must define what that means in the organization’s culture and for employees. It means taking values and goals off the wall and getting them in the hearts of employees by recognizing those values when they’re seen in action.

One effective and popular approach is to establish values-based criteria for recognition. Management at Avis Rent-A-Car, Canada’s largest rental car company, set recognition criteria around six values: teamwork, quality, respect for the individual, integrity, shareholder value and community responsibility. It also helps to give clear examples of what above-and-beyond behaviour is, for example, staying late to solve a customer problem.

Remember that without clearly understood criteria, the program will lose focus and effectiveness.

Successful peer-to-peer recognition programs enable employees at all levels to easily express gratitude through low- or no-cost means. It doesn’t take much to positively impact employee morale and performance.

Many companies provide specially formatted e-mails that can be sent by employees at all levels without management approval. This is an effective way to increase program participation without worrying about performance justification or wasted budget dollars.

At investment management firm T. Rowe Price, headquartered in Baltimore, manager-driven recognition programs were proving to be labour-intensive to administer and simply not efficient. Employees were receiving recognition far after the performance. So they tried a paper-based peer-to-peer system, where employees recognized each other with cards. Employees collected many cards and could trade them in for gifts. The problem was, employees did not understand what significant performance was. They gave each other cards for such things as, “Thanks for trading lunch with me.”

With a recognition vendor, they designed a peer-to-peer recognition program that is Web-based. Managers still approve all formal awards, but the vast majority of recognition is through spontaneous e-mail cards that cost nothing to the company.

In the first few months of the program, the 2,000 employees sent 8,000 e-cards to their peers. And 92 per cent of employees ranked the program as positive for morale.

Remember, even small gestures of gratitude can make a huge impact.

Get approvals for highest awards

While it’s great to eliminate approvals for informal, lower-level expressions of thanks, such as employee e-mails or cards, approvals are critical for higher-level awards.

Why? Requiring management approval would ensure a program is rewarding achievements that further the company’s goals and values.

The number of approvals usually depends on the value of the award. While the highest award level might require vice-president approval, manager approval may be sufficient for lower-level awards.

Smart companies take an additional step, requiring program administrators to also review all approved nominations to ensure the necessary approvals have been obtained. Including simple but effective checks and balances in the approval process will minimize program abuse.

Here’s a good rule of thumb: the more valuable the award, the more approvals required.

To check, go high tech

Too many companies spend substantial dollars on recognition programs with little if no way to monitor results. And when all is said and done (and paid for), HR needs tangible results to show the benefits of the investment in employee recognition.

Web-based technology not only simplifies and expedites the nomination and approval process, it can importantly provide reporting and measurement tools to monitor and evaluate program activity.

At Avis, for example, recognition program administrators can track online which divisions are using the recognition system and which aren’t. And, using technology, they can instantly compare that information to division profitability. The result? They have found a direct and significant correlation between profitability and a group’s use of the peer-to-peer Web-based recognition program — which means they can convince managers and employees of the benefits of using recognition. On a recent television interview, CEO David Siegel said he was confident his company was seeing at least a 10 times return on its investment in recognition.

Web technology helps make recognition faster, more direct and easier to access for employees, it can also:

•simplify and expedite the nomination and approval process;

•monitor program activity, by individual or department;

•provide real-time reports; and

•compare approved nominations with approved award criteria.

Remember, don’t skimp on technology. In this area in particular, you get what you pay for.

Even the very best employee recognition program — with top-of-the-line technology and a well-honed approval process — will fail if management and employees are not trained to use it correctly.

It happens all the time. Companies that typically do a good job of promoting new recognition programs often don’t take the time to educate workers on program objectives and criteria.

Effective training increases understanding, elevates the perceived importance of the program, maximizes participation and minimizes program abuse. Educated participants are better able to help ensure program integrity and minimize inappropriate activity.

Remember, the time staff spends in training will pay dividends in improved employee motivation, productivity and retention.

Gary Beckstrand is director of consulting for the O.C. Tanner Recognition Company, which has headquarters in Burlington, Ont. He can be reached at

gary.beckstrand@octanner.com

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