Recognition Schemes – What Difference Do They Make?

Recognition in the form of praise or appreciation for a job well done acts as a powerful motivator in the workplace. Featured in Hertzberg's model (1959) and Maslow’s hierarchy of needs (1970), recognition is even more relevant and sought after today. 

So what exactly is a recognition scheme? It is a ‘non-cash’ reward which recognises accomplishments e.g. going the ‘extra mile’ for customers or colleagues. Typically it does not form part of pre-set performance targets. It can be as simple as a manager saying thank you or it can be more formal with scope for financial (vouchers) or non financial awards (public recognition from CEO or leader) and it is usually organisation wide. Here we take a look at the advantages and disadvantages:

What are the advantages of recognition schemes?

• Acts as powerful motivator when part of a properly designed and executed scheme
• Motivated staff promotes positive organisational image for staff and customers
• Reinforce the organisation’s cultures and values – ‘walking the talk’
• Raises employee satisfaction by publicly acknowledging all staff who go the extra mile
• Good fit in today’s flatter organisational structures.

What are the disadvantages of recognition schemes?

• Unless aligned to culture and values, schemes can produce a negative impact
• Schemes must be used and promoted regularly if they are to create desired results
• Transparency and fairness often get overlooked in complex recognition schemes
• Can be challenging to make schemes inclusive across the whole organisation.

As organisations seek to increase the impact of reward practices beyond pay (see last month’s newsletter on Total Reward) the value of a well designed recognition scheme that is aligned to the organisation’s values and purpose can deliver a return on investment.

Read the Tips section below to find out more about the factors you need to consider when designing a recognition scheme.

February’s Tips - Factors to Consider When Designing Your Recognition Scheme

Be inclusive. The value of successful recognition schemes are that they motivate everyone and not just the small group of ‘stars’ in an organisation, to go above and beyond.

Align it to your culture and values. It is essential to encourage behaviours that really matter as well as being closely aligned to your existing reward practices and strategy.

Link it to your business purpose. Ensure the scheme links directly to your business purpose, for example promoting customer excellence to sustain interest and relevance of the scheme. It should not duplicate recognition given by another reward e.g. performance bonus.

Make it genuine. Employees are quick to spot insincerity or devices to motivate people ‘on the cheap’ as such approaches will invariably result in loss of goodwill and cynicism.

Keep it simple. Simplicity reinforces the reason why the scheme exists i.e. to recognise special accomplishments or behaviours that demonstrate the organisation’s values.

Promote the scheme. Communication is key to success and should occur as frequently as possible through team briefs, intranet, email alerts and posters to keep it ‘top of mind’ and to encourage nominations. 

Make it fair. Establish a proper assessment process to ensure that your scheme is fair and consistent. Using ‘peer panels’ where colleagues decide on successful nominations works successfully for some organisations.

Please note that this advice is provided as guidance only. If you need specific on creating a recognition scheme for your organisation, please call Reward First on + 44 (0)1367 710 618.

Just News

HR Professionals pay increases are down on last year. According to the latest survey from Remuneration Economics, base pay for HR professionals rose by 4.6% in the year to September 2006, down from 5.5% over the previous year. Senior function heads fared better at 5.3%. The survey, which covers nearly 8,000 employees in over 100 organisations also saw total earnings increase by 5.6%, down from 6.7% over the previous year, while HR Business Partners topped this figure at 9.2%. The numbers of HR Professionals receiving a bonus jumped up to 78% (from 64% in 2002) though the average bonus was 11.2%, a marginal change from 10.7% in 2002.

Netherlands faces pressure on pay rates as labour market contracts. Despite 5% unemployment levels, job vacancies in the Netherlands are reaching all-time high levels due to surging levels of retirement from the ‘baby boom’ generation. The impact may result in some industry sectors losing nearly a quarter of their workforce, leading to skill shortages, despite the influx of migrant workers. According to Paul de Beer, labour market analyst from the University of Amsterdam, this is increasing pay pressures where FNV, the trade union confederation, increased their pay demand from 2.5% to 3% despite inflation (Consumer Price Index) running at 1.4% in January 2007.

Website of the Month

Each month, we’ll give a quick round up of a website and this month we take a look at ‘Where women want to work’. This site looks at UK companies voted by the Sunday Times ‘Top 50 companies where women want to work’ awards. You will find out more about the employee satisfaction, reward and recognition and leadership of companies on the list as well as company case studies and features.

While the website is heavily marketing led (run by Aurora, the niche marketing company) it doubles up as a careers recruitment board. One point of interest is that job vacancies are light on senior strategic HR roles despite the fact that the same companies are advertising senior job roles in the Executive appointments.