A key driver of employee engagement is recognition, according to Matt Seadon, APAC General Manager of Achievers. But with the pandemic's economic fallout taking its toll on companies' ability to provide traditional cash-based rewards, what should organizations actually be looking at? Here are some highlights of Matt's conversation with People Matters.
Earlier this year, data from Qualtrics showed that Singapore was falling behind on employee engagement, and it's not a new trend—other studies show that Singapore employees are just not very happy in general. What do you think is happening here?
I think it's clear that organizations all around the world are in different stages of maturity when it comes to the overall engagement of their people. It's a worldwide challenge and Singapore is not alone.
From our perspective, we view employee recognition as a key driver of employee engagement. And we can see organizations right around the world using recognition to drive engagement. However, they often struggle when it comes to execution. While many companies understand the importance of identifying and implementing programs that drive employee engagement, these programs are often underutilized, and they don't become core for the organization. They're thought of as a "nice to have".
You need the right communication, and the right support from management to really drive the effectiveness of those programs. If you're not driving effective recognition, you're going to have a negative impact on your employee engagement. We've seen that time and time again, through multiple research articles.
How do the mechanics of recognition work, and what should we be actually recognizing employees for?
Our research indicates that the top important factor is correct alignment to company values. So we want to ensure that an organization is recognizing those behaviors that they want to see demonstrated more frequently by their people. Second to that is frequency.
Recognition is most powerful when it's frequent. If you're recognized once a week, it's more effective compared to once a year.
In fact, our Workforce Institute recently released a Culture Continuity Report that identified that the more recently an individual has been recognized, the more highly engaged they are. Half of the employees that were recognized in the past week were very engaged, compared to less than a third who received recognition a month ago. And the scariest thing was that was just 16 percent of people who received recognition more than a year ago were engaged. So one of the things that organizations have the opportunity to do, particularly in the Singapore market, is to really focus on the role of recognition in connecting employees to the organization, and in turn driving the employees engagement.
What role do rewards and benefits play here?
Rewards and benefits historically have often been coupled together with recognition and reward. So for every act of recognition, you needed to give a reward—cash, shares, benefits. And there is no doubt that reward plays an important role. But, organizations that are separating recognition from reward are able to recognize more frequently, which as our research has found is very powerful.
The act of recognition—regular, immediate, specific, encouraging—is by itself beneficial. Regardless of the form, whether face to face or through through an online social tool, through an email or through a phone call, organizations that have a culture of recognition, will embrace multiple channels of recognition.
What's important, from our perspective, is understanding the effectiveness of that recognition. So one of the areas that we're exploring with our clients is the use of technology to read large data sets on engagement across the organization—to drill into the data and see the organization's language of recognition, to understand the behavior and culture of the organization. And importantly, to also benchmark against competitors from other industries.
How do you see recognition fitting into the employee life cycle, from the recruitment stage to the exit interview?
There are moments in the employee lifecycle when recognition is critical. We particularly see the onboarding experience and recognition playing a really powerful role, particularly now with remote work. Working out of the office was a way to foster connection, but we no longer can do that. A new entrant to an organization can no longer easily walk the floors and halls to identify those people that are the trusted knowledge partners within the organization. Instead, organizations have to turn to the act of recognition to foster better connections. So we see organizations using recognition in the early onboarding phase as a way to celebrate the behaviors of the new person and to to encourage them to connect with their colleagues.
Recognition also works for milestones in the employee lifecycle. Organizations now are assessing what milestones they should be recognizing, beyond the traditional 5, 10, 15, or 20 years. There's an acknowledgment now that with the generational change in the workforce, there needs to be a move towards recognition for service on a much more frequent basis, annually for example. And it may be written, verbal, with or without financial rewards, but importantly taking the time to celebrate the contribution that the person has made. We're actually seeing the use of social recognition around milestones these days.
How do you think managers should be trained in order to build a recognition culture?
Awareness of the impact of recognition for managers is important. It's not just understanding how to recognize and the power of recognition, but also understanding that as leaders, they're role models for behaviors in the organization. That actually starts from the C suite and goes all the way down through the organization—that awareness and understanding of the impact that a leader can have on their staff's engagement. We know that managers are a key driver of engagement for an organization, and empowering them with the right tools can help drive engagement.
Could you share some success stories of companies that have implemented effective recognition strategies?
Some of the most interesting stories come from industries like banking and financial services, where their traditional remuneration strategies have been under scrutiny. In Australia at the moment, there are a number of large banks that have had some real pressure from the government regarding how their incentive models are influencing the behaviors of their staff and leading to a negative impact on consumers. We're now seeing organizations in financial services embrace recognition as a way to demonstrate those behaviors that are core to organizational beliefs. Behaviors that are aligned to risk practices, for example, or behaviors that put the customer at the center of organizational policy—they are using recognition to amplify those.
I think this example is particularly relevant in Singapore, where there is a very large financial services sector and traditionally, cash based compensation has been a very large driver of the overall vehicle. It's an opportunity to look at different ways of influencing behavior through recognition instead of just cash.