CHAPTER 18: Recognition PDF

CHAPTER 18: RECOGNITION Context and linkage Recognition tends to be an afterthought, something to address after the “important rewards”, such as base pay and incentives, have been implemented. High-performing organisations understand the value placed on and received from recognition plans, along...

CHAPTER 18: RECOGNITION Context and linkage Recognition tends to be an afterthought, something to address after the “important rewards”, such as base pay and incentives, have been implemented. High-performing organisations understand the value placed on and received from recognition plans, along with the role of human capital in an organisation’s success. Recognition plans are no longer allocated to an HR assistant, but are becoming critical elements in a total reward system and in reinforcing employees’ commitment to organisation objectives. Definitions and differences clearly understood The purpose of a pay structure is to provide guidelines as to which pay scale employees are on, linked to their grade. It provides a logical framework on which to base remuneration decisions. Once organisations grow too big for the owner to manage personally, job grades and pay structures provide defensible systems and procedures for implementing the pay policy in a consistent way 1.Incentive Incentive plans reward specific results or criteria that are announced at the beginning of the performance cycle. Awards tend to be formula-driven and timed to pre-announced targets. The emphasis is more on the financial or tangible value earned than on the psychological value of the achievement 2. Recognition Recognition plans typically reward employee contributions in nonfinancial ways and drive ongoing, on-the-spot type recognition of behaviour, projects completed, or very short-term targets having been met. Positioning recognition in the total reward system Cultural implications need to be incorporated into the design of recognition plans, especially regarding Peer-to-peer nominations greatly increase the perception of fairness in these plans. Organisations need to ensure robust systems and rules and provide sufficient training to ensure a high enough EQ (emotional quotient) to accommodate this approach. Team rewards have become important in many organisations, yet individual achievement is promoted through recognition plans. As part of a total reward system, recognition plans must incorporate a team structure, if reinforcing teamwork is part of the organisation’s desired culture. Organisational values need to be considered as well as the organisation’s culture The business case for implementing a recognition system 1. Increased profits Improvements in employee attitude drive higher customer satisfaction, which results in high profits. Recognition, if measured by feeling appreciated, being acknowledged, and having contributions recognised on the job, can be viewed as a key element of employees’ attitudes. The growing body of data and the inter-relationships between the measures of attitudes (soft) and financials (hard) demonstrate the significance of recognition as an organisational performance issue. 2. Communication vehicle The total reward system, along with its recognition component, is a powerful communication vehicle. The organisation directs and energises employees through its reward system, which tells employees what is important to the organisation and, specifically, how employees are to perform if they are to be rewarded. Design considerations 1.Participants Traditionally, recognition plans involved individuals at lower levels. There has been a shift towards teams and all levels. Another trend has been to recognise a work group or an entire organisation. The emphasis on organisational objectives and the need for everyone to feel part of the group has driven group-wide recognition plans. A balance needs to be created between individual and group, and this can be done only if the recognition plan is incorporated into the total reward system. 2. Criteria The current trends for developing criteria for recognition plans are much more strongly aligned with specific organisational strategies and objectives than ever before. Both hard and soft measures are being used in recognition plans, and these multifactor- criteria options are being applied to teams or groups. 3. Nomination and selection process The nomination and selection process has evolved from a management-only process to one that includes peers and joint (employee–management) selection committees. Employee education and empowerment provide additional value to the organisation. 4. Awards Symbols or utilities: Symbols or utilities are often “worth” more than the money because they last longer and have some “trophy” value. Examples of utilities are sporting equipment, white appliances, cameras, electronic equipment and symbol examples are trophies and statues. Points awards: There are many variations of points awards, and these range from: Leaders and managers awarding points to employees. Peers awarding points to colleagues. Companies awarding “loyalty” points to customers. Critical success factors Forming and mandating the design team. Securing measures, research information and current best practice. Establishing the plan objectives, desired outcomes, and a framework for evaluating the plan. Creating the plan structure (rules, criteria, awards, and so on). Determining the plan support requirements. Selecting the award vehicle. Project planning the overall plan, including the financial rationale and business case. Benchmark findings The plan is aligned with the desired culture. High level of commitment by executives. Participants can impact criteria (good line of sight). Criteria are more objective than subjective. Both individuals and teams are recognised. Recipients are recognised in public before their peers. Both behaviours and achievements are recognised. Goals are clear and the plan is well communicated. Management understands and uses the plan. Plan design and operation involve employees Case study: guidelines to management 1. Recognition at Organisation X Introduction It is generally accepted that managers are not always good, timely and consistent in recognising and rewarding people. Inconsistent application of recognition and rewards creates a lot of unhappiness, and it is the purpose of this chapter to provide specific, uniform guidelines. 2. Principles of celebration What are the best ways to celebrate accomplishments and provide recognition to innovative employees? The following “Seven Celebration Principles” should be followed in order to make effective use of recognition systems Emphasise success rather than failure. Deliver recognition and reward in an open and publicised way. Deliver recognition in a personal and honest manner. Avoid recognition that is too “slick” or overproduced. Tailor your recognition and reward to the unique needs of the people involved. Timing is crucial Recognise recognition 3. Rewarding high-quality outputs: standard, formal rewards The following rewards are conditions of employment but can still be used as vehicles to recognize good performance: Annual performance-related salary increments for staff employees Incentive bonus scheme. Long-service awards. Recognising high-quality inputs The individual actions, desired competencies and behaviours (inputs) which contribute to the achievement of the organisation’s goals need to be recognised and when appropriate, rewarded on an ongoing basis. Two avenues exist by which this can be achieved: Informal recognition It is not necessarily only cash or a gift that will leave a lasting impression on the achiever, or their peers and colleagues; various though highly effective ways can be used to recognise individual and team achievements. MD’s discretionary recognition payment The managing director may authorise special monetary awards up to a maximum of R20 000. The bonus is used to recognise certain achievements or completion of a specific project. An award may also be recommended in instances where outstanding performance, commitment, and exceptional results are achieved over a number of years. Recommendations should be made to the relevant head of department for discussion with the other leadership team members. The importance of timing is vital. The longer the delay in recognising success, the less impact the reward will have. Use awards to communicate what you hold important. Recognising employees 1. Advantages of monetary recognition Desirable. Easy to administer and handle. Understood by an employee. Able to provide an extra boost to a long-term programme. 2. Disadvantages of monetary recognition Have no trophy (lasting) value. Are not exotic. Cannot be enhanced. Tend to become an expected reward. 3. Thirty-four nonfinancial ways to recognise employees, Pg 351- 352 Give a one-minute praising. Praise employees immediately for a job well done. Boost an individual’s self-esteem by encouragement. Use the person’s first name. Give credit where credit is due. Acknowledge individual achievement. Make a “Behind the scenes” award for those whose. Summary Recognition is probably the most under-utilised reward element. Recognition can be formal or informal, financial or nonfinancial. Good recognition policies ensure that similar behaviour is recognised similarly. In my view, recognition is worth 10 times the value of money.