Career milestones shouldn’t be overlooked when designing strategic recognition
Managers may view career loyalty recognition solutions — career milestones and service awards — as an entitlement that does little to move an organization forward. So more resources and effort are often directed towards rewards that enhance performance because, after all, that’s where they see results.
But it’s not quite that simple. Not every employee in an organization is in a position to be meaningfully recognized in a performance program. But career loyalty awards recognize the contributions and loyalty of all employees, regardless of role. Part of a best-in-class recognition strategy is to recognize and touch everyone who makes a contribution to an organization.
Ninety per cent of companies have career loyalty recognition solutions in place, according to Recognition Professionals International (RPI). The Carrot Principle, a book written by Chester Elton and Adrian Gostick in 2007, mined benchmarking and survey databases across thousands of companies and found when employees are recognized in a meaningful career milestone presentation, they feel a deeper connection to their company, are more engaged, more loyal and have increased feelings of being appreciated.
This kind of reaction is critical in an economy where 60 per cent of employees are planning to flee their employers as soon as economic conditions improve, according to a Right Management study of 904 North American employees in 2009.
Governments in Canada and the United States provide specific tax benefits for traditional career loyalty recognition plans, allowing employers to get more value for their money because of favourable tax laws. There are tax advantages for recognition awards given at five-year intervals — consult your tax advisors for more information.
Employee surveys and experience show employees value their career achievement programs and feel a deep connection to the importance of the programs.
“Engagement is largely driven by the employee’s feeling that the organization values his or her contribution, and that the organization will do its best to remove barriers from getting the job done,” found James Oakley, assistant professor of management at Purdue University’s Krannert School of Management in West Lafayette, Ind., in his study The Road to an Engaged Workforce.
Turnover in companies with a clear recognition strategy is 13 per cent lower than in organizations without one, according to a Towers Watson Reward Plan Survey of 614 employers representing 3.5 million employees. According to a 2007 Towers Watson analysis, one standard deviation improvement in employee engagement is associated with a 1.9-per-cent increase in revenue per employee. What could these kind of improvements mean to organizations?
The average length of tenure for the North American worker is about three years. Recognition needs to come early and frequently to drive a change in retention. Talent goes where it is appreciated and as millennials enter the workforce, the average tenure will likely decrease. This is a group who requires goal-setting, constant feedback and linkage to the “big picture.”
“In banking, brokering and auto service, long-term employees create higher customer loyalty. Even in manufacturing, however, where employees rarely meet customers, long-term employees can produce better products, better value for the consumer and better customer retention,” said Frederick Reicheld in the Loyalty Effect.
Career appreciation recognition solutions, as part of an overall appreciation strategy, have never been more important. Employee longevity is required to provide time for learning of complex tasks. In a knowledge-based economy with increasingly complex markets, products and services, employees need time to master their responsibilities.
A total appreciation strategy including career achievement recognition will create highly engaged employees who produce significantly higher financial results. There is an average operating income improvement of 19.2 per cent in high engagement organizations versus a year-to-year decrease of 32.7 per cent in low engagement businesses, found Towers Watson’s 2007 Global Engagement Study.
Appreciation is basic. Humans need appreciation, crave it and respond to it. This makes appreciation basic to companies’ success as well. Career milestone recognition is a simple, automatic and effective way to do this. Regular award presentations communicate how employees and their work contribute to the company and the brand. They show employees their contributions really do matter. They inspire employees to become engaged.
Recognition of career milestones is a unique opportunity to build a sense of appreciation, well-being and inspiration into the core of a company’s culture. Driving this cultural change is the real power of effective career loyalty recognition solutions.
Chris Vyse is vice-president of sales and marketing at O.C. Tanner, a Burlington, Ont.-based recognition company. He can be reached at (905) 632-7255 ext. 282 or visit www.octanner.ca for more information.
