Download SPRING 2013 REPORT DRIVING STRONGER PERFORMANCE THROUGH EMPLOYEE RECOGNITION Employee Recognition Survey

Employee Recognition Survey
SPRING 2013 REPORT
DRIVING STRONGER PERFORMANCE
THROUGH EMPLOYEE RECOGNITION
research report
SHRM / GLOBOFORCE
Employee recognition programs are on the rise, and with plenty of
good reasons. As human capital becomes the foremost challenge for
companies worldwide, employee engagement is mission critical for an
increasing number of organizations.
But which employee recognition programs are most effective in meeting this challenge?
To answer that question, Globoforce® – together with the Society for Human Resource
Management (SHRM) – surveyed 803 HR professionals to assess the relationship
between recognition, engagement, employee performance and other key human capital
factors. The survey, conceived and commissioned by Globoforce, also gathered trends
and insights from HR leaders and practitioners about the challenges they are facing and
the innovations and technologies that are changing the way people are managed today.
The Spring 2013 survey examined:
*The biggest challenges and opportunities for managing human capital
*The most effective strategies in elevating employee engagement and performance
*The impact of employee recognition on workplace productivity and satisfaction
*The effect of new innovations like crowdsourced data to manage and measure
employee performance
KEY FINDINGS
In the SHRM/Globoforce survey, 803 HR leaders and practitioners shared their practices
and perspectives on engagement and recognition and their impact on performance.
Some of the findings include:
1. E
mployee engagement is the most important HR challenge facing organizations.
2. E
mployees are more motivated and perform better when rewarded through praise
and prize.
3. Stand-alone years-of-service awards are often an ineffective type of recognition.
4. Leveraging the collective recognition across a company provides a clearer picture of
employee performance.
5. C
rowdsourced feedback can make performance reviews more effective and enhance
manager and employee appreciation.
SHRM/Globoforce Spring 2013 Report // 2
EXECUTIVE SUMMARY
SHRM/Globoforce Spring 2013 Report // 3
ABOUT THE SURVEY
The SHRM/Globoforce Employee Recognition Survey was commissioned by
Globoforce and conducted by the Society for Human Resource Management
(SHRM) from March 14, 2013 through March 24, 2013. This is the fourth
deployment of the semi-annual survey since its launch in June 2011.
This edition of the survey was sent to 6,000 SHRM members at manager
level or above. The final sample of the survey was composed of 803 randomly
selected HR professionals who are employed at organizations with a staff
size of 500 or more employees. The survey had a response rate of 14 percent
and a margin of error of +/- 3 percent.
Results include responses from organizations in North America across a
wide range of business-to-business and business-to-consumer industries.
(Additional details about demographics are provided at the end of the report).
About Globoforce
Globoforce is the world’s leading provider of social recognition
solutions, redefining how companies understand, manage, and
motivate their employees. Innovative companies around the world use
Globoforce’s cloud-based social recognition software to reveal the true
performance and influence of every employee and strengthen company
culture. With Globoforce, HR and business leaders can take a strategic
approach to recognition programs that result in measurable benefits to
the bottom line driven by increases in employee engagement, retention,
and productivity. Globoforce is co-headquartered in Southborough,
Massachusetts, and Dublin, Ireland.
About the Society for Human Resource Management
The Society for Human Resource Management (SHRM) is the
world’s largest association devoted to human resource management.
Representing more than 260,000 members in more than 140 countries,
the Society serves the needs of HR professionals and advances the
interests of the HR profession. Founded in 1948, SHRM has more than
575 affiliated chapters within the United States and subsidiary offices in
China and India.
In today’s corporate landscape, human capital is widely perceived as critical for
future success. And in the current environment of increasing global competition
and slower growth prospects, raising employee engagement is seen as a key
strategy for success in maximizing that capital.
According to the SHRM/Globoforce Spring 2013 survey, nearly half of HR
professionals say employee engagement is one of the top three challenges their
organization faces. Close behind is succession planning, culture management,
employee retention and turnover, and performance management. (Figure 1)
Figure 1
WHICH OF THE FOLLOWING ARE THE MOST IMPORTANT HR CHALLENGES
TO YOUR ORGANIZATION? (Select your top three choices)
50%
45%
47%
40%
39%
35%
35%
30%
33%
31%
25%
26%
20%
19%
15%
18%
18%
10%
10%
5%
0%
10%
4%
nt
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SHRM/Globoforce Spring 2013 Report // 4
1 / Employee engagement is the most important HR challenge
facing organizations.
FIGURE 2
HOW DO THIS YEAR’S TOP HR CHALLENGES COMPARE TO LAST?
Spring 2013 Survey
31%
Performance management
28%
Fall 2012 Survey
33%
Employee retention/turnover
25%
35%
Culture management
30%
39%
Succession planning
41%
47%
Employee engagement
40%
18%
Employee satisfaction
24%
0%
10%
20%
30%
40%
50%
How can companies better manage employee engagement? Survey results
show the direct impact of employee recognition. In fact, 48 percent of HR
leaders and practitioners surveyed say employee engagement increased as
a result of the implementation of an employee recognition program. This
percentage is even higher (climbing north of 50 percent) when recognition
programs are tied to core values.
SHRM/Globoforce Spring 2013 Report // 5
The concern for employee engagement has risen from even six months ago.
Forty-seven percent of HR professionals identify employee engagement as a
key HR challenge, a rise of seven percentage points from the Fall 2012 SHRM/
Globoforce survey, when 40 percent of respondents said engagement was an
HR challenge. Employee retention also rose from the Fall 2012 survey (from 25
percent to 33 percent), which suggests that companies are concerned about
the impact of an improving job market on their workforce. The lone challenge
to significally decrease from the Fall 2012 survey was employee satisfaction,
declining from 24 percent to 18 percent. This decline may be an early indicator
into HR’s current move towards a business partner model, focusing on stronger
workforce performance.
How you say it matters. So does what you give.
First, the praise. Employers get more out of their workforce when employees are
encouraged. When asked whether negative or positive feedback has a greater
impact on improving employee performance, 94 percent of survey respondents say
positive feedback.
Just six percent of those surveyed say negative feedback has a greater impact on
performance. (Figure 3)
Employees don’t want to just hear “good job.” They crave tangible rewards to go along
with that praise. In the SHRM/Globoforce survey, 83 percent of HR professionals say
employees in their organization are more motivated by recognition that includes a reward
than recognition with no associated reward. (Figure 4)
Recognition also pays off in other ways. HR professionals overwhelmingly say recognizing
employees for their achievements provide employees with a clearer understanding of
a company’s organizational objectives. Understanding these objectives is often critical
towards greater alignment to achieving a company’s financial goals. (Figure 5)
Survey results also indicate a possible correlation between company investment
in employee recognition programs and lower employee frustration. According to
survey respondents, companies that spend more on their recognition programs
see lower levels of employee frustration than those that spend less on recognition
programs. (Figure 6)
SHRM/Globoforce Spring 2013 Report // 6
2/ Employees are more motivated and perform better when rewarded
through praise and prize.
Figure 4
What has a greater impact on
performance - negative or
positive feedback?
ARE EMPLOYEES MORE MOTIVATED BY
RECOGNITION WITH OR WITHOUT A REWARD?
100%
90%
94%
80%
90%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
83%
17%
10%
10%
6%
0%
Negative feedback
0%
Recognition
without a reward
Recognition
with a reward
Positive feedback
Figure 5
Figure 6
DOES RECOGNIZING EMPLOYEES FOR
THEIR ACCOMPLISHMENTS PROVIDE A
CLEARER UNDERSTANDING OF A COMPANY’S
ORGANIZATIONAL OBJECTIVES?
PERCENT OF PAYROLL TO
RECOGNITION PROGRAMS VS. LEVEL
OF EMPLOYEE FRUSTRATION
120%
90%
80%
70%
100%
84%
80%
24%
21%
67%
76%
79%
<1%
of Payroll
1%-2%
of Payroll
>2%
of Payroll
33%
60%
60%
50%
40%
40%
30%
20%
20%
10%
16%
0%
YES
NO
0%
Often or very
Frustrated
Not, occasionally, or
moderately frustrated
SHRM/Globoforce Spring 2013 Report // 7
Figure 3
Our survey also looked at what types of programs are most prevalent in the
workplace. Today’s HR professionals support a myriad of programs, ranging
from safety awards to more modern approaches, such as social, peer-topeer programs.
One of the most prevalent types of recognition programs is the traditional
years-of-service program. But while traditional years-of-service programs are a
mainstay among most companies, survey results also paint them as the least
effective, with 10 percent of respondents calling them “not effective.” (Figure 7)
That compares to 94 percent of HR leaders who say peer-to-peer recognition
is effective, suggesting that companies benefit more when employees are
personally recognized for the work they do rather than simply the time they’ve
been employed.
FIGURE 7
COMPANIES THAT CALL SPECIFIC RECOGNITION PROGRAMS EFFECTIVE
100%
98%
96%
94%
92%
90%
99%
98%
96%
96%
94%
92%
90%
88%
86%
84%
s
s
s
n
ds
ion tion ard
ard nitio war ward
a
c
w
a
a
cre Gift ty a cog
o
ee vice
e
ec d re
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y
r
r
f
r
Sa eer
plo f-se
ee l, an
y
m
p
o
lo
E
ve
rs-to
mp , tra
r
a
e
e
e
Y
ots
Pe
r-t ven
e
E
ag
it
gn
an
M
SHRM/Globoforce Spring 2013 Report // 8
3 / Stand-alone years-of-service awards are often an ineffective
type of recognition.
When recognition is an open call to an entire organization to recognize peer
behaviors, the resulting “crowdsourced” feedback can go a long way in measuring
employee performance.
According to HR leaders surveyed, more is better when it comes to assessing
performance. In fact, 90 percent of respondents say feedback from an employee’s
peers across the organization is more accurate than feedback provided by just an
employee’s manager or supervisor. (Figure 8)
By widening the inputs of recognition and feedback across the company,
employees can play a greater role within the performance fabric of an organization.
It can create a new groundswell approach to recognition that captures that great
work that employees see every day. According to HR leaders surveyed, 85 percent
of companies are currently using or would considering using a system that
empowers employees to reach out to each other for great work. Seventy-four
percent of respondents also say crowdsourced recognition data would provide a
more accurate picture of employee performance. (Figure 9)
FIGURE 8
FIGURE 9
WHICH WOULD PROVIDE A MORE
ACCURATE PICTURE OF EMPLOYEE
PERFORMANCE?
DO YOU THINK CROWDSOURCED RECOGNITION DATA
(RELYING ON INPUT FROM MULTIPLE SOURCES) WOULD
PROVIDE A MORE ACCURATE PICTURE OF EMPLOYEE
PERFORMANCE?
100%
90%
80%
90%
70%
No, 26%
60%
50%
40%
30%
Yes, 74%
20%
10%
10%
0%
Feedback from the
employees’ direct supervisor
& feedback from others
in the organization
Feedback from the
employees’ direct
supervisor only
SHRM/Globoforce Spring 2013 Report // 9
4 / Leveraging the collective recognition across a company
provides a clearer picture of employee performance.
According to SHRM/Globoforce survey, performance reviews often fall short. In
fact, only half of surveyed HR leaders (51 percent) say that their organization’s
current performance review system is effective in achieving its goal.
How can companies get a more accurate picture of employees’ performance?
According to our survey results, increasing the frequency and reach of performance
reviews may be the answer.
Currently, most companies (77 percent) conduct performance reviews only
annually. Yet, when employee performance reviews are conducted more than
once a year – ongoing, monthly, quarterly, or semi-annually–employees feel more
validated. According to survey results, more frequent performance reviews lead to
higher levels of the following HR metrics, according to HR leaders (Figure 10):
*Employees are rewarded according to job performance (12 percentage
points higher)
* Managers or supervisors effectively acknowledge and appreciate employees’
performance (15 percentage points higher)
*Employees are satisfied with the level of recognition they receive for doing a
good job at work (10 percentage points higher)
80%
Figure 10
MEASURES OF RECOGNITION
EFFECTIVENESS VS. FREQUENCY OF
PERFORMANCE REVIEWS
60%
50%
Employee performance
reviews annually
Employee performance reviews
more than once a year
75%
70%
63%
61%
46%
40%
30%
34%
24%
20%
10%
g
rs
th
so e
wi d
din e
d eive
rvi ledg
or anc
e
c
e
ac m
isfi ec
up ow
d for
at n r
s/s n
de per
s s itio
er ack
r
e
a
g
a ly
w b
ye gn
an ve
re jo
ploreco
M ecti
es to
m
f
e
f
E
y
o
ef
el
plo
lev
Em
SHRM/Globoforce Spring 2013 Report // 10
5 / Crowdsourced feedback can make performance reviews more
effective and enhance manager and employee appreciation.
Among companies that include crowdsourced recognition data in their reviews,
nearly two-thirds (65 percent) say that their review performance process is
effective in achieving its goals. In comparison, more than half of those that don’t
use crowdsourced recognition data say their performance review process needs
to be overhauled. (Figure 12)
FIGURE 11
FIGURE 12
WOULD CROWDSOURCE RECOGNITION
BE HELPFUL DATA TO INCORPORATE INTO
EMPLOYEE PEFORMANCE REVIEWS?
IS YOUR PERFORMANCE REVIEW EFFECTIVE
OR DOES IT NEED TO BE OVERHAULED?
(RESPONDENTS ANSWERING YES)
Crowdsourced recognition helpful in employee
performance reviews
65%
Yes
60%
65%
55%
22%
No
50%
51%
49%
45%
35%
40%
35%
78%
30%
25%
20%
Performance review is
effective
Using crowdsourced
data in reviews
Performance review needs
to be overhauled
Not using crowdsourced
data in reviews
SHRM/Globoforce Spring 2013 Report // 11
In addition to frequency, feedback from more people across the organization
can provide more insight about the behaviors and performance of an individual
than a single manager. The fact is that most employees are already recognizing
great work from colleagues on a daily basis. A recognition program provides HR
leaders and managers a way to capture the ongoing feedback to help them manage
people better and ultimately improve performance. Survey respondents agree, as
78 percent say crowdsourced recognition would be helpful data to incorporate into
employee performance reviews (Figure 11) while 74 percent currently use or would
consider mapping recognition awards against performance rankings/ratings.
According to survey respondents, 59 percent of companies with crowdsourced
reviews report that managers or supervisors effectively acknowledge and appreciate
employee performance. Conversely, companies that do not crowdsource reviews say
just 45 percent of managers or supervisors effectively acknowledge and appreciate
employee performance. (Figure 13)
FIGURE 13
DO YOUR MANAGERS OR SUPERVISORS EFFECTIVELY ACKNOWLEDGE AND
APPRECIATE EMPLOYEE PERFORMANCE?
65%
60%
59%
55%
45%
50%
45%
40%
35%
30%
Companies with
crowdsourcing reviews
Companies without
crowdsource reviews
SHRM/Globoforce Spring 2013 Report // 12
But the impact of crowdsourced data extends beyond the review itself. Survey
results suggest a strong correlation between companies that use crowdsourced
recognition data as part of their performance review process and people’s
perceptions of whether supervisors effectively acknowledge and appreciate
employee performance.
The current business climate and the HR challenges it presents are driving companies to
take a closer look at how to raise employee engagement and drive employee performance.
With the noted rise of recognition programs, companies are seeing proven business benefits
from recognizing great work and performance. These same insights are helping HR leaders
leverage the collective wisdom of the entire workforce within performance reviews.
In the SHRM/Employee Recognition Spring 2013 Survey, we uncovered the following findings:
1.Raising employee engagement is seen as a key strategy for success in maximizing
human capital.
2.The formula for better employee performance and motivation: Invest in praise and prize.
3.Stand-alone year of service awards, a very traditional type of recognition, is also the least
effective in driving critical HR metrics when used as the singular form of recognition.
4.When organizations incorporate inputs beyond a single manager’s feedback, HR leaders
gain a more accurate picture about true employee performance.
5.Companies that use crowdsourced recognition data within performance reviews have
more effective performance management processes.
COMPANY BREAKDOWN/DEMOGRAPHICS
500
to 2,499
50%
2,500
to 24,999
25,000
or more
40%
10%
SHRM/Globoforce Spring 2013 Report // 13
CONCLUSION
U.S.-based operations only
56%
Multinational operations
44%
Is your organization a single-unit company or a multi-unit company?
Single-unit company: A company in which the location and the company are one
and the same
14%
Multi-unit company: A company that has more than one location
86%
HR department/function for which you responded throughout the survey
Corporate (company-wide)
56%
Business unit/division
27%
Facility/location
18%
Are HR policies and practices determined by the multi-unit corporate headquarters, by each work
location, or both?
Multi-unit headquarters determines HR policies and practices
46%
Each work location determines HR policies and practices
2%
A combination of both the work location and the multi-unit
headquarters determine HR policies and practices
52%
Learn more about strategic, social
recognition and how it can drive
business results for you.
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SHRM/Globoforce Spring 2013 Report // 14
Does your organization have U.S.-based operations (business units) only or does it
operate multinationally?