I want to take a step back now and share the most common mistakes HR leaders make when it comes to recognition programs. My hope is that this post will help you preemptively look out for and be better prepared to handle these pitfalls.
After speaking with thousands of HR leaders - across a variety of company sizes and industries - here are the three most common mistakes I’ve observed:
Most HR teams introduce well-intentioned recognition programs. However, they frequently die on the vine - usually because the program is not top of mind for managers and employees. This isn’t just anecdotal. Deloitte’s “State of Employee Recognition” report found that 73% of companies have recognition programs in place, but only 58% of employees are aware of them. Here are my tips to avoid this mistake:
Dan Ariely’s NYT bestselling book, “Predictably Irrational” describes how we live in two different worlds: one where social norms prevail, and the other where market norms dictate how we act.
Social norms are warm and fuzzy, they are rooted in connection with others, and they guide things like our relationships. Whereas market norms are dictated often by supply and demand and are transactional in nature - think of asking for a favor from a friend versus paying a contractor to do a job for you. When kept separate, there’s harmony. When they collide, problems emerge.
To share a quick example from the book: let’s say you’re invited to Thanksgiving dinner at your significant other’s house. The family welcomes you with open arms, spends hours cooking your favorite dishes, and you all share a warm meal together. While everyone is sitting around full and happy, you stand up and - wanting to express your gratitude - pull out your wallet and offer your significant other’s family money in return for their hospitality. Super awkward, right? That’s because this is a situation that should have been guided by social norms (in this case a verbal expression of gratitude), not market norms (payment).
Knowing this, where does employee recognition fall? It’s absolutely a social norm. You’re thanking your employee for their hard work and demonstrating how much you value their contributions. Yet so many companies decide to express their gratitude with something as impersonal as cash or gift cards, which is a market norm. Not only does this strip away the sincerity of the recognition moment, but it also diminishes the impact of it.
At Blueboard, we believe employee recognition can be a double-edged sword: you can either use it to create an amazing moment that strengthens the company-employee relationship OR a negative one that turns the relationship transactional. Here’s how to avoid the trap of transactional market-norm recognition.
CEB and Gartner found that only about 1 in 10 organizations are measuring the impact of their total rewards programs. I noticed this trend in my conversations with organizations as well. Of the companies who socialize their recognition programs, most only tell the first half of the recognition story, which is sharing the employee’s contribution and recognition interaction.
But they don’t talk about or often even consider the second half of recognition, which is tracking how these collective recognition moments add up and impact the company culture, feelings of appreciation amongst employees, and key metrics like engagement, productivity, and retention. Without this tracking, you’ll have no insight into where your investment is providing value and no identified areas for focused improvement. HR teams need to carve out the time, at a minimum, to evaluate the metrics that matter and how investing in recognition will help qualitatively influence performance or quantitatively move the needle. Some easier steps to get a pulse on the value you’re creating:
Let’s continue the conversation around your recognition program and goals. Are there any mistakes you think I missed? Reach out to me any time on LinkedIn, or shoot me an email at firstname.lastname@example.org.