Recognition starts at the top. In his 14 years as CEO of global fast-food restaurant leader Yum! Brands (KFC, Taco Bell, Pizza Hut), David Novak cultivated an enterprise-wide culture of employee appreciation and recognition. Lauded by Warren Buffett and others, Novak believed passionately in “taking people with you for operational excellence.”
Apparently, though, the memo, or in Novak’s case, his books, Taking People with You and O Great One, A Little Story About the Awesome Power of Recognition, missed many CEO desks.
Appearing on CNBC in May 2017, Novak cited findings from a recent Gallup poll of some 1,500 working Americans. “Seven out of 10 employees today are not engaged…and 20 percent are disengaged,” he said. “You’ve got, on average, 30 percent of your employee base driving your results. Those are not good results. They’re going to work and they can’t wait to go home. Versus, you know, tap dancing to work.”
The good news? A company’s leader can make a real impact. Coming from a CEO, praise, from the Latin pretiare meaning “to value or prize,” can move an employee like positive earnings on the stock price—up. The converse is obvious—depreciation. As How to Win Friends and Influence People author Dale Carnegie once observed, “People work for money but go the extra mile for recognition, praise and rewards.”
A well-designed and implemented recognition program is proven to energize employee confidence and loyalty, measurably impacting talent acquisition, performance and retention. As the following experts explain, recognition is also good for business, in ways that include reinforcing corporate values, improving organizational outcomes—and driving positive financial results.
“Effective rewards can take many forms, from premium parking spots and team lunches to flexible work arrangements and volunteer hours during the work day.”
A Long Game
“As the talent war escalates, an inclusive recognition strategy that emphasizes motivating, retaining and developing your entire talent pool is more important than ever,” says Brent Vander Waal, COO of West Des Moines, Iowa-based ITA Group, a global leader in partnering with companies and brands to align and motivate their people through recognition, incentives and related programs. “And it needs to be viewed as a long-term investment, not an expense. Give your recognition program time to grow. You may not see the benefits to your retention or recruiting for a year or more, but trust in this as a long-term strategy.”
Implementing an effective program starts on the individual level, adds Vander Waal, who says executives are generally very self-motivated, but also are goal-oriented and thrive on accomplishment. “Typically, though, those goals will vary for each team member,” he explains. “For example, one person may thrive on public recognition in front of the department, while another hates the spotlight and would prefer a day off. So, connecting with each executive on their personal goals and understanding what truly motivates them is often the most effective way to know how to recognize their efforts.”
Effective rewards can take many forms, from premium parking spots and team lunches to flexible work arrangements and volunteer hours during the work day. Since some will work better than others, getting candid feedback on whatever programs you deploy will be key—as is defining the metrics that will earn them.
“The best program strategy will fall flat if you don’t ensure that your people know what behaviors to recognize,” says Vander Waal. “It starts at the top—the entire leadership team needs to demonstrate an openness to communicating with employees and hearing constructive feedback. The results may be surprising, but it’s worth it in the long run. And empower your leaders to make judgment calls. Often, they know the needs of team members better than any best practice or industry white paper.”
He adds that CEOs should not expect to always get everything right. “What is important is that you don’t stop collecting and evaluating feedback.”
Incenting with Intangibles
“Recognition, in its various forms, acts as a strategic cornerstone of the employee engagement and alignment process,” notes Brant Dolan, director of business development for Memphis, Tennessee-based Quality Incentive Company. “It is an effective strategy because employees who feel valued and appreciated are more engaged, and engaged employees positively impact bottom-line results.”
As with Yum’s David Novak, the corner office is where effectively recognizing and rewarding employees and the executive team starts, says Dolan, who has been in the rewards and recognition industry for more than 20 years and also serves as president of Incentive & Engagement Solution Providers, a strategic industry group within the Minneapolis, Minnesota-based Incentive Marketing Association (IMA). “As the ultimate leaders and source of inspiration in their companies, the CEO’s behavior sets the tone that recognition is important,” he explains. “Leaders should focus on creating a total reward experience that is both positive and personal. Findings from a 2015 study commissioned by the IMA show that how people are rewarded can carry more motivational importance and impact than the reward itself.”
Specifically, the study found that between 40 percent and 70 percent of a participant’s preferred recognition experience was determined by intangible factors such as who gives the award, how it’s communicated and the professional impact it carries. The bottom line? Cash, “outperformed” by other measures, is not always king.
“Meaningful displays of kind words, compliments, saying thank you and celebrating team successes are imperative,” says Dolan. “Appreciation can be further demonstrated using a combination of corporate gifts, attendance at special events and venues, trips and committee appointments, as well as involving the families of the executive team.”
Setting the right tone requires thought and understanding. “We often see CEOs who don’t know what they don’t know,” Dolan says. “They try to go it alone, or put together an internal recognition task force that follows the same path they take for other initiatives. In the same way CEOs may involve their marketing team and ad agency to attract external customers, they should utilize strategic resources such as engagement agencies and incentive companies to develop their internal recognition programs.”
Measuring program success and ROI should similarly follow a well-organized path. Key steps include setting clear, measurable, value-creating goals; providing the right tools and training; and consistently measuring both the business results and process results, says Dolan. “CEOs should regularly take the pulse of their executive team and the executives should be doing the same, either formally or informally, for their employees,” he says. “Important, too, is measuring customer satisfaction relative to the recognition program. If the CEO can focus on the process and accountability needed to engage a dedicated, innovative workforce, the ROI will be there.”