CLC Bench Marking Reward and Recognition Programs

CORPORATE LEADERSHIP COUNCIL® MAY 2008 www.clc.executiveboard.com

BENCHMARKING REWARD AND RECOGNITION PROGRAMS

Trends and Practices in Designing, Implementing, and Managing Reward and Recognition Programs

CORPORATE LEADERSHIP COUNCIL® PAGE 2 BENCHMARKI NG REWARD AND RECOGNITION PROGRAMS KEY FINDINGS

2008 Corporate Executive Board. All Rights Reserved.

ISSUE OVERVIEW

As competition for critical talent increases, organizations look to diversify their employee engagement and retention strategies. Many organizations realize that an effective reward and recognition (R&R) program is part of a compelling total rewards offering that engages employees and drives business outcomes. Despite awareness of the importance of R&R, many organizations struggle to create and implement a successful program. To support members in their efforts to create a more effective program, this report provides the Council’s key findings on R&R drawn from a membership survey.

DEFINITIONS AND SCOPE OF RESEARCH

Data collection for this report occurred through a survey of 27* member organizations with R&R programs. The table below provides relevant definitions and outlines the scope of the analysis :

*Please note that not all organizations responded to every question and that the number of respondents (N) is indicated throughout the report. Also, where percentages total more than 100%, participants were asked to select all answer choices that apply.

Definitions

Reward Refers to cash, trips, and other gifts given

Recognition Refers to acknowledgement via an e-mail, public ceremony, thank you card, plaque, or other means

Formal R&R Refers to situations in which a formal process is used to reward/recognize, including some level of approval by leadership (manager and above)

Informal R&R

Refers to occasions when an approval process is not needed to reward/recognize

Scope of Analysis

R&R for Performance § Individual § Team § Managerial/leadership

R&R for Contributions to the Organization

§ Cost saving ideas § Customer satisfaction/service § Embodying company culture § Innovation § Length-of-service § Safety

Included in Report

R&R for Contributions Outside the Organization

§ Commitment to the environment § Community service

Not Included in Report

Base or Variable Compensation

§ Bonus awards § Stock grants § Sales incentives



PHASE 4: MANAGEMENT AND MEASUREMENT

Ensure employees utilize the program and continually assess its effectiveness over time.

Action Steps and Key Findings

þ Select a Method to Ensure That Employees Are

Rewarded/Recognized—Organizations most frequently conduct employee surveys to ensure employees are rewarded/recognized, and more than half of organizations track who is rewarded/recognized.

þ Measure Program Results—Most organizations that measure the results of their program do so by gauging employee satisfaction and engagement.

þ Collect Employee Feedback —Less than half of organizations solicit employee feedback on their R&R program.

PHASE 3: TRAINING AND COMMUNICATION

Maximize program impact and utilization by training managers and effectively communicating the program.

Action Steps and Key Findings

þ Train Managers on the Program—Organizations most

frequently train managers on the reasons for the program and their role in executing it.

þ Involve Senior Leadership in Communications —Organizations most often involve leadership in announcing the program and award recipients.

þ Decide How Frequently to Send Communications—Most organizations send employees f ormal messages about their R&R program either quarterly or annually.

þ Select Communication Channels —Organizations leverage less resource-intensive methods of mass communication to communicate their program and the presentation of an award.

þ

PHASE 2: OWNERSHIP & RESOURCES

Establish program ownership and allocate resources to effectively implement and manage the program.

Action Steps and Key Findings þ Determine Program Ownership—More organizations house

their R&R program within the compensation department than any other department.

þ Allocate Resources—Organizations spend less than 1% of payroll on R&R, and most R&R budget comes either entirely from the corporate budget or entirely from the line unit or department budget.

þ Decide Whether or Not to Engage a Vendor—Organizations most frequently engage a vendor for reward packages and thank you/recognition cards.

PHASE 1: PROGRAM DESIGN

Design and implement a program that will effectively engage employees and achieve business objectives.

Action Steps and Key Findings þ Select Activities and Behaviors to Reward/Recognize—

Organizations most frequently recognize length-of-service and reward individual excellence in role and innovation.

þ Incorporate Employee Feedback—Most organizations that collect employee f eedback do so via an employee survey .

þ Select R&R Form and Types—Most organizations use all forms of R&R (monetary, non-monetary, formal, and informal).

þ Address Global Considerations—More than half of organizations with global programs incorporate local and/or cultural preferences in their programs .

EXECUTIVE SUMMARY To help members design and implement an R&R program that effectively motivates and engages employees, this page outlines the Council’s findings regarding the key steps of the process, including designing the program, establishing ownership and allocating resources, providing training and communicating the program, and measuring and managing the program. The Council used these steps, which are based on the standard approach to designing, implementing, and managing any program, as the framework for our work. The following pages provide a more detailed overview and include benchmarking information for each step.



Figure 2: Prevalence of Rewarding Various Activities and Behaviors (N=27)

Select Activities and Behaviors to Reward/Recognize Organizations should select activities to reward/recognize that align with program objectives; these activities should encourage behaviors that drive desired business outcomes. Activities that companies recognize may be different than those they reward. Organizations Most Frequently Recognize Length-of-Service Organizations recognize various actitivies and behaviors through their program , but mos t frequently recognize activities that visibly impact the bottom line, such as loyalty, great ideas, and individual performance; the greatest percentage of organizations recognize length-of-service (70%), innovation (63%), cost-saving ideas (63%), and individual excellence in role (63%). Meanwhile, fewer organizations recognize activities that may contribute less directly to the bottom line, such as community service (52%), embodiment of company culture (48%), commitment to the environment (41%), and safety (33%). Figure 1 below illustrates the prevalence of recognizing employees for various activities and behaviors.

Organizations Most Frequently Reward Individual Excellence in Role and Innovation Organizations reward various types of actitivies and behaviors, but the greatest percentage reward individual excellence in role (74%) and innovation (74%). Although companies most often recognize length-of-service, this is not the mos t frequently rewarded activity, as it does not necessarily correlate with good performance. Similar to recognition, less than half of organizations reward activities that may not have as direct an impact on the bottom line, such as embodiment of company culture (48%), community service (41%), commitment to the environment (22%), and safety (19%). Figure 2 below depicts the prevalence of rewarding employees for various activities and behaviors.

Program Design

Ownership & Resources

Training & Communication

Measurement & Management

Figure 1: Prevalence of Recognizing Various Activities and Behaviors (N=27)

70%63% 63% 63%

59% 56% 56%52% 48%

41%33%

0%

40%

80%

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74% 74% 70% 70% 67% 63%56%

48%41%

22% 19%

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Incorporate Employee Feedback Organizations should incorporate employee feedback in order to reward and recognize in a way that motivates and engages the employee segments targeted by the program (i.e., non-exempt employees, executives, new hires). Companies may collect employee data from external sources or through internal surveys and/or focus groups. Most Organizations Collect Employee Feedback Via an Employee Survey When Designing Their Program When designing their program, most organizations (85%) solicit some type of employee feedback to understand how employees want to be rewarded/recognized. The most common method for gathering employee feedback during the design process is conducting an employee survey, likely because surveys are relatively low-resource methods of collecting actionnable data to guide R&R program design. Fewer organizations use employee focus groups and advisory groups/committees to gather employee feedback. Figure 3 below illustrates the prevalence of using a certain method (or methods) to solicit employee feedback. Select R&R Form and Types Based on the program ’s objectives, employee feedback, and available resources, organizations should select the appropriate R&R form (i.e., formal, informal, monetary, non-monetary) and type (e.g., service awards, peer awards). Most Organizations Use All Forms of R&R Organizations use a combination of formal, informal, monetary, and non-monetary methods to reward/recognize employees. All organizations use formal methods, and almost all (96%) offer monetary R&R. Slightly fewer organizations leverage non-monetary methods (85%) and informal R&R (78%). The following figure depicts the prevalence of the four forms of R&R: *See page 2 for definitions

Program Design




Figure 3: Methods for Collecting Employee Feedback When Designing an R&R Program (N=23)

Other tools used: § Feedback already

submitted on the current program

§ Market research

Collecting Feedback

Because different employee segments have different preferences , organizations should ask employees about their preferences for the following: § Formal vs. infomal R&R

§ Monetary vs. non-monetary R&R

§ Types of R&R (e.g., length-of-service, team awards, CEO awards)

§ Activities rewarded/recognized (e.g., comittment to the environment)

§ R&R prizes (e.g., jewelry, trips, plaques)

§ R&R delivery mechanism (e.g., meeting with manager, annoucement at ceremony)

78%

43%

17% 17%

0%

40%

80%

EmployeeSurvey

EmployeeFocusGroups

EmployeeAdvisoryGroup /

Committee

Other Per

cent

age

of O

rgan

izat

ions

Figure 4: Prevalence of R&R Forms (N=27) Examples of monetary R&R include cash and gift certificates; examples of non-monetary R&R include plaques and thank you cards.

85%

96%

78%

100%

0% 50% 100%

Non-Monetary

Monetary

Informal*

Formal*

Percentage of Organizations



Figure 5: Extent to Which Organizations’ Programs Use Formal and Informal R&R (N=27)

Figure 6: Prevalence of Using Various Types of R&R to Reward/Recognize Employees (N=27)

11%

33%

41%

15%

0%0%

25%

50%

Entirely Formal Mostly Formal Equal Amountsof Formal and

Informal

Mostly Informal Entirely Informal

Per

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Select R&R Form and Types (Continued) Most Organizations Use a Combination of Formal and Informal R&R Most organizations use both formal and informal methods of R&R, yet vary in degree of use. None of the surveyed organizations use only informal R&R in their program, and although it would be easiest to ensure that formal R&R is administered consistently across the organization, only 11% indicate they exclusively use formal R&R. As demonstrated in Figure 5 below, most organizations rely on some mix of both formal and informal methods of R&R, with the largest percentage (41%), using equal amounts of both. This is likely because formal R&R is by definition limited to a smaller percentage of high-performing employees, yet organizations realize the importance of ensuring that all employees feel recognized and appreciated for their contributions.

Organizations Offer Various Types of R&R As Figure 6 demonstrates, organizations employ multiple types of R&R, but most frequently offer company celebrations (85%) and spot awards that require approval from leadership (85%). Few organizations (11%) incorporate a points system in their program in which employees earn points towards items in a catalogue or spending cards. However, a points system may be a potential solution to the challenges of ensuring that the program is fair and equitable across locations and that employees are motivated by their prizes. All of the participants offer at least one of the types of R&R listed below and most offer more than one.

Program Design




Participants offer four to five R&R

types on average.

85% 85%78%

70%

56% 52%

15% 11%

0%

45%

90%

CompanyCelebrations

(Annual Parties,Picnics, etc.)

Spot Awardsthat Require

Approval fromLeadership

(Cash , Tickets,Gifts, etc.)

CeremonialAwards(Dinners,

President’sAward, etc.)

OngoingRecognition(Birthday

Celebrations,Thank YouCards, etc.)

Peer Awards Spot AwardsRequiring No

Approval

Raffle Prizes Points SystemPer

cent

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Figure 7: Are the Same Activities Rewarded/Recognized All Global Locations? (N=16)

Figure 8: Are the Categories of R&R Offered the Same Across All Global Locations? (N=16)

Address Global Considerations

International organizations must decide how to administer a program on a global basis. A few major challenges specific to a global program include deciding whether or not the activities rewarded, the types of R&R offered, and the awards given will be the same globally. Ensuring that the program is fair and equitable is also difficult, and organizations may consider solutions such as incorporating local preferences in the program and adjusting monetary awards for different currencies. This section provides benchmark data on how international organizations approach these challenges.

Challenge #1: Deciding Whether or Not to Reward/Recognize the Same Activities Across All Locations Organizations with Global Programs Tend to Reward/Recognize Mostly the Same Activities at All of Their Global Locations As Figure 7 illustrates , 88% of participating organizations reward/recognize mostly the same or entirely the same activities across all of their global locations . Only 12% of organizations reward/recognize mostly different, or entirely different, activities. In this way, organizations achieve some level of program consistency across all locations, but may also incorporate any special objectives they have for particular locations.

Challenge #2: Deciding Whether or Not to Offer Similar Types of R&R Across All Locations Organizations with Global Programs Tend to Offer Similar Types of R&R at All of Their Global Locations Organizations with global programs typically offer the same, or mostly the same, types of R&R (e.g., peer awards) across all of their global locations . As Figure 8 depicts, 81% of organizations offer mostly the same or entirely the same categories of R&R. Only 19% of organizations offer categories that are mostly or entirely different. Again, incorporating a few slight differences allows organizations to ensure their program is globally consistent, yet locally relevant.

Program Design




25%

63%

6% 6%

0%

35%

70%

All the Same Mostly the Same Mostly Different All DifferentPer

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31%

50%

13%

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All the Same Mostly the Same Mostly Different All Different

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Figure 9: Are the Actual Awards Given the Same Across All Global Locations? (N=16)

Address Global Considerations (Continued) Challenge #3: Deciding Whether or Not to Give the Same Awards at All Locations Organizations with Global Programs Tend to Give Similar Awards at All of Their Global Locations Organizations with global programs typically give the same, or mostly the same, awards across all of their global locations (i.e., the award given for length-of-service at one location is the same as the award given at another location). As Figure 9 depicts, 69% of organizations give awards that are mostly or entirely the same at all of their global locations. Only 31% of organizations give awards that are mostly or entirely different. Variation in awards given may be the result of local availability or organizational attempts to ensure that the program is fair and equitable across locations (i.e., employees in one region and/or country may not value a particular award as highly as employees in another region and/or country).

Program Design




19%

50%

25%

6%

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All the Same Mostly the Same Mostly Different All Different

Per

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Figure 10: Do You Incorporate Local and/or Cultural Preferences in

Your Program? (N=16)

Figure 11: Prevalence of Incorporating Local and/or Cultural Differences in Different Parts of the R&R Program (N=11)

Figure 12: Do You Adjust Monetary Awards for Different Currencies? (N=16)

Address Global Considerations (Continued) Challenge #4: Ensuring the Program is Fair and Equitable Across All Locations More Than Half of Organizations with Global Programs Incorporate Local and/or Cultural Preferences in Their Programs Accounting for local and/or cultural preferences not only helps ensure that a global R&R program is fair and equitable across locations, but also helps ensure that rewards are more personalized, and therefore more meaningful to the recipient. As Figure 10 demonstrates, most organizations with global programs (69%) incorporate some local and/or cultural preferences in their program. For those organizations that do, the greatest percentage do so by tailoring the actual award given. Figure 11 below illustrates the prevalence of incorporating local and/or cultural differences into a portion (or portions) of the R&R program.

More Than Half of Organizations Adjust Monetary Awards for Different Currencies As Figure 12 demonstrates, more than half of organizations with global programs (62%) adjust monetary awards where currencies differ, helping to ensure the program is fair and equitable across the company. Although many companies do this, a large percentage (38%) do not adjust monetary awards for different currencies and therefore recipients of the same award receive amounts that are unequal in value.

Program Design




Yes62%

No38%

Yes69% No

31%

55%

45%

36%

27%

0%

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Actua

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Given

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50%

15%12% 12%

8%4%

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Compensation HR Compensationand Another

Function

AnotherFunction

Compensationand HR

HR andAnotherFunction

Per

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44%

20%16%

12%8%

0%

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Centralized SomewhatCentralized

Hybrid SomewhatDecentralized

Decentralized

Per

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Determine Program Ownership After deciding what the program should look like, organizations must decide how the program will be managed, which department will house it, and who will own it to effectively implement the program. The Majority of Surveyed Organizations Take a Centralized Approach to Managing Their R&R Program Most organizations (64%) have a program that is managed more by headquarters than by business units or departments; only 20% have a program managed more at the business unit or department level. This may help organizations ensure that the program is administered and used consistently across the organization and across all locations. Figure 13 below depicts the prevalence of various approaches to managing an R&R program.

More Organizations House Their R&R Program Within the Compensation Department Than Any Other Department Half of surveyed organizations (50%) house their R&R program within the compensation department, likely reflecting the view that R&R is part of the total compensation package. For those that do not, the program is usually housed either within HR more generally, or is owned by two separate departments. When a program is owned by two departments, one department will likely administer some portions of the program (e.g., service awards) and another department will administer others (e.g., performance awards). Figure 14 below illustrates the prevalence of ownership by various departments.

Figure 13: Approaches to Managing R&R Programs (N=25)

64% of organizations have a program primarily administered from

headquarters 20% of organizations have a program where decisions are made primarily at the

business unit or department level

Figure 14: Departments Within Which Organizations House Portions of the R&R Program (N=26)

Other functions that may have ownership over portions of the program: § Benefits § Corporate Communications and Marketing § Finance § Organizational & Staff Development § Various Business Units

Program Design & Implementation




Managing a Global Program For those organizations that have a global program (N=16): § 63% have a program

primarily administered from headquarters

§ 25% have a program where

decisions are made primarily at the business unit or department level

§ 13% have a hybrid model



Figure 15: Prevalence of Some R&R Ownership by Various Parties (N=27)

Determine Program Ownership (Continued) Most Organizations Have a Position or Team At Headquarters That Manages Their R&R Program As Figure 15 depicts, most organizations (93%) have a designated position or team at headquarters that owns their program , which may help ensure accountability for R&R, as well as program consistency. HR generalists, line managers, and coordinators at the local or business unit level also have partial ownership over the program at some organizations. For those companies that have more than one employee at headquarters managing their program , the average number of staff dedicated to that team is 4.85 people. Moreover, larger organizations do not necessary have larger teams; a few of the smaller organizations in our sample have the greatest number of employees at headquarters dedicated to R&R.





Other groups that may have ownership over portions of the program: § Departmental Administrative

Assistants § Executive Assistants § Local Coordinators § OD Leaders

The average team or staff size at headquarters is 4.85 people (N=10).

56%

37%

11% 11%

22%

0%

30%

60%

DesignatedTeam or Staff

atHeadquarters

DesignatedPosition at

Headquarters

HR GeneralistsThat Work with

the Line

Line Managers Some OtherGroup

Per

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Figure 17: Source of R&R Budget at the Participating Organizations (N=22)

Figure 16: Resources Spent on R&R Annually

Allocate Resources After establishing program ownership, organizations must determine spending levels for the program and decide where the budget for the program will come from (e.g., corporate budget, department budget, chargeback to department). Organizations Spend Less Than 1% of Payroll on R&R Organizations must allocate enough resources to fund the various elements of their program, including awards , administration, communication, and measurement. On average, surveyed organizations spend 0.62% of payroll on R&R annually. Per employee, they spend approximately $297.67 annually in U.S. dollars. Those organizations that spend higher amounts on R&R may be leveraging their program as a larger component of their overall compensation strategy, making tradeoffs between R&R, base pay, bonuses, etc. Figure 16 below depicts the percent of payroll that several of the participants spend on R&R and also details how much a few of the participants spend on R&R annually per employee in U.S. dollars.

Most Organizations’ R&R Budget Comes Either Entirely From the Corporate Budget or Entirely From the Line Unit or Department Budget More than half of organizations (59%) indicate that there is not shared budget responsibility for their R&R program; budget comes either entirely from the corporate budget, or entirely from the line unit or department budget. Such an arrangement may be designed for convenience, or may reflect differing philosophies on R&R. Although it is less common for organizations to split the budget between the corporate and department budgets , approximately 28% of organizations split the costs in this way. Figure 17 below illustrates the prevalence of allocating R&R program budget from different sources at the participating organizations.





27%

9%

14%

5%

32%

14%

0%

20%

40%

Entirely Corporate

MostlyCorporate

Half Corporateand Line Unit or

Department

Mostly Line Unitor Department

Entirely LineUnit or

Department

Mostly or AllChargeback to

Line Unit orDepartment

Per

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Percent of Payroll Spent on R&R Total and By Category

Total (N=10) Reward (N=10) Recognition (N=3) Average: 0.62%

Range: 0.03%–1.0% Average: 0.50%

Range: 0.03%–1.5% Average: 0.51%

Range: 0.03%–1.0%

Amount Spent on R&R Per Employee in U.S. Dollars (N=6)

Average: $297.67 Range: $125–$518



Figure 18: Do You Use a Vendor to Support a Portion of Your R&R Program? (N=27)

Figure 19: Portions of the Process for Which Organizations Engage a Vendor (N=20)

Decide Whether or Not to Engage a Vendor While assigning program ownership and allocating resources, organizations may decide to engage a vendor to support a portion of their program. Major challenges with implementing an R&R program that might necessitate the use of a vendor include infrastructure support (e.g., electronic nomination and tracking software) and providing awards and recognition cards, such as thank you cards. However, some organizations also use a vendor to design their entire R&R program. Most Organizations Use a Vendor to Support their R&R Program Since organizations may not have the proper infrastructure in place to implement an R&R program, and most likely do not produce employee awards themselves, the majority of surveyed organizations (74%) use a vendor to support some portion of their R&R program. As Figure 18 demonstrates, approximately one-quarter of organizations (26%) house all aspects of R&R within the organization. A sample list of the vendors participants use in conjunction with their R&R program is also included below.

Organizations Most Frequently Engage a Vendor for Reward Packages and Thank You/Recognition Cards Although there is no one step in the process for which the majority of organizations engage a vendor, organizations most frequently engage a vendor to create reward packages (40%), such as trips or tickets, and thank you/recognition cards (40%), as these are difficult to create internally, but are likely to be a part of most programs. Although most organizations do not engage a vendor to develop electronic approval software, a points system, or electronic tracking software, this may be because they are not using these at all. Figure 19 below depicts the prevalence of engaging a vendor for different portions of the R&R process.

Vendors Used by Participants for Some Portion of Their R&R Program

§ American Express § Hewitt Associates

§ Birkenstock § Journeymasters

§ Custom Design Marketing § Kreyer Associates

§ Excellence in Motion § OC Tanner

§ Geiger Bros. § Rideau Recognition Solutions

§ Giftcertificates.com § Springbok Services

§ Globoforce § Strategic Meetings

§ Grass Roots Solutions

§ Hallmark Insights





Yes74%

No26%

40% 40%

35%

25% 25% 25% 25%

20%

0%

25%

50%

RewardPackages

Thank You /Recognition

Cards

ElectronicNominationSoftware

ElectronicTrackingSoftware

Other PointsSystem

ProgramDesign

ElectronicApprovalSoftware

Per

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age

of O

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izat

ions Organizations may

also engage a vendor to provide small gifts.



Figure 20: Do You Train Managers on Some Aspect of Your R&R Program? (N=26)

Figure 21: Aspects of the Program for Which Organizations Provide Managers with Training (N=17)

Figure 22: Prevalence of Including Senior Leadership in Different Parts of the Communication Process (N=23)

Train Managers on the Program After determining program ownership and allocating resources, organizations must effectively communicate the program ; even the b est designed program will have m inimal impact unless it is well communicated. Since managers play a key role in employee communications, it is important to train them on the program so they can effectively relay messages about the program to employees. Also, if managers understand the drivers behind the program, they will be more likely to engage employees in the process. Organizations Most Frequently Train Managers on the Reasons for the Program and Their Role in Executing It As Figure 20 demonstrates, more than half of organizations (65%) train managers on some aspect of the R&R program. In fact, of those organizations that provide some type of training, 100% train managers on the reasons for the program. Organizations also frequently train managers on their role in the program and how to communicate the program. This helps organizations ensure that managers understand the program and can effectively reinforce and promote it. Figure 21 below depicts the frequency with which organizations train managers on various aspects of the R&R program .

Involve Senior Leadership in Communications Involving senior leadership in program communciations demonstrates organizational commitment to the program and reinforces the importance of engaging in behaviors and activities that are rewarded/recognized. Leadership is Most Frequently Involved in Program Communications by Announcing the Program and Award Recipients Eighty-five percent of organizations involve senior leadership in the communication of their R&R program , and of those that do, leadership is typically involved in announcing the program (74%) and announcing award recipients (70%). Less than half of organizations (43%) engage senior leadership in reminding employees to use the program , most likely due to the time it would require. Figure 22 depicts the prevalence of including senior leadership in different parts of the communication process.





Yes65%

No35%

100%88%

76%65%

47%

0%

50%

100%

Reasons forthe Program

Their Role inthe Program

How toCommunicatethe Program

How toReward /RecognizeEffectively

HowFrequently to

Reward /Recognize

Per

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Senior leadership may be guests of honor at annual ceremonies or involved in

department level programs.

74% 70%

43%

13%

0%

40%

80%

Announcing theProgram

AnnouncingAward

Recipients

RemindingEmployees to

Use the Program

Other

Per

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Figure 23: Frequency with Which Organizations Send Employees Formal Messages About Their R&R Programs (N=20)

Decide How Frequently to Send Communications When crafting R&R communications, organizations must decide how frequently to send employees messages about the program. Inconconsisent or infrequent communications may reduce perceived organizational commitment to the program, or fail to remind employees often enough to foster commitment to the program. Most Organizations Send Employees Formal Messages About Their R&R Programs Either Quarterly or Annually Most organizations (80%) send formal messages (e.g., send e-mails, have information sessions) about their program to employees either quarterly or annually. Those organizations that send messages to employees annually may not be fully leveraging communications to promote the program and reinforce the behaviors that they seek to encourage. Although organizations should avoid sending R&R messages so frequently that they are considered spam, they must send communciations frequently enough to demonstrate commitment to the program. Figure 23 below illustrates the frequency with which organizations send employees formal messages about their program.

80% of organizations send formal messages either

quarterly or annually





0%

5%

45%

35%

15%

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Weekly Monthly Quarterly Annually Varies

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ions



Figure 24: Prevalence of Using Different Channels to Communicate the Program (N=27)

Select Communication Channels Organizations must select the channels they will use to communicate the program and to communicate that an award has been given, balancing the ease of using technology-based mass communications with the impact of using more personal, live channels. Organizations Leverage Less Resource-Intensive Mass Communications to Communicate their Program To communicate their program to employees, organizations rely on less resource-intensive channels that allow for widespread communications, often involving mass-customizable technology. For example, as Figure 24 demonstrates, organizations most frequently leverage the company intranet and organization-wide e-mails , which are easily-customized and reach a large number of employees. Of the written and live channels, organizations most often select those channels that have the widest impact and involve little resource investment, such as department-led information sessions and the company newsletter.





Li

ve C

hann

els

Wri

tten

Ch

ann

els

Tech

nolo

gy-B

ased

Cha

nnel

s

Organizations tend to use low -resource channels that reach the greatest number of employees

to communicate their program, such as the company intranet and

company-wide e-mails.

15%

96%

63%

7%

44%

37%

26%

15%

44%

33%

30%

0% 50% 100%

Other (Combination of Channels or It Varies)

Company Intranet

Organization-Wide E-mails

Podcasts

Company Newsletter

Notices on Bulletin Boards

Posters

Mail

Department-Led Information Sessions

Public Announcements at Meetings

Manager-Led Information Sessions




Figure 25: Prevalence of Using Different Communication Channels to Communicate That an Award Has Been Given (N=27)

30%

59%

33%

0%

37%

7%

7%

7%

41%

37%

37%

0% 30% 60%

Other (Combination of Channels or It Varies)

Company Intranet

Organization-Wide E-mails

Podcasts

Company Newsletter

Notices on Bulletin Boards

Posters

Mail

Manager-Led Information Sessions

Department-Led Information Sessions

Public Announcements at Meetings


Select Communication Channels (Continued) Organizations are More Likely to Use Live Channels to Communicate the Presentation of an Award The most common method for communicating the presentation of an award is the company intranet. However, as Figure 25 demonstrates, other written and technology-based channels are used less frequently during this phase as compared with the initial program communication (see Figure 24). Relying more heavily on personal, live communication channels to communicate that an award has been given allows organizations to demonstrate commitment to the program by investing time and resources in it. Personal interactions also allow for more elaboration on the meaning and influence of recipients’ actions.





Live

Cha

nnel

s W

ritt

en C

han

nel

s Te

chno

logy

-Bas

ed C

hann

els

Mass communication channels are used less

frequently to communicate that an award has been given than during initial

program communication.

Live channels are used more frequently to communicate that an award has been given than during initial

program communication.



Figure 26: Do You Have a Mechanism for Ensuring that Employees Are Rewarded/Recognized? (N=27)

Select a Method to Ensure that Employees Are Rewarded/Recognized Organizations may select a mechanism (e.g., a centralized tracking system) to ensure that the program is properly utilized and that employees are rewarded/recognized. This is especially appropriate for global organizations where awards are administered at the local level, or in situations where leadership does not approve and administer all awards. Organizations Most Frequently Conduct Surveys to Ensure Employees are Rewarded/Recognized As Figure 26 demonstrates, most organizations (78%) have at least one method of ensuring that employees are rewarded/recognized, and most frequently employ an engagement survey. Such surveys not only indicate the extent of program use, but how meaningful and effective the program is as well. As Figure 27 demonstrates, other common methods for ensuring that employees are rewarded/recognized include asking managers to share the ways they reward and recognize employees and using a centralized tracking system.

More Than Half of Organizations Track Who is Rewarded/Recognized Although tracking which employees have been rewarded/recognized does not provide insight into whether the program is achieving objectives, it does help organizations ensure that they impact enough employees to make the program meaningful. Since employees must believe that they are eligible for R&R to be engaged in the program, organizations should use a tracking mechanism to ensure they reward/recognize enough employees. Most organizations (88%, N=26), track which employees have been rewarded/recognized for at least some of the rewards and recognition they give.

Figure 27: Methods Used by Organizations to Ensure Employees are Reward/Recognized (N=21)





Yes78%

No22%

Other methods used: § HRBPs remind managers § Leadership takes responsibility § Track nominations

71%62%

57%

38%

24%14%

0%

40%

80%

Conduct anEngagement

Survey

Ask Managersto Share HowThey Reward /

Recognize

Use aCentralized

Tracking System

All DedicatedFunds Must beUsed Within a

Certain Amountof Time

Other R&R is Part ofManagers’

Competencies /Performance

Review

Per

cent

age

of O

rgan

izat

ions

Percentage of Workforce Rewarded/Recognized Annually

On average, surveyed organizations reward/recognize 34.25% of employees annually with their

centrally managed program (N=12).



Figure 28: Do You Measure the Results of Your R&R Program? (N=27)

Figure 29: Prevalence of Using a Certain Method (or Methods) to Measure the Results of the Program (N=17)

94%

29%

18%12%

0%

50%

100%

EmployeeSatisfaction /Engagement

EmployeeRetention

EmployeeProductivity

Other

Per

cent

age

of O

rgan

izat

ions

Measure the Results of the Program To ensure that the program achieves strategic business objectives, organizations should measure the results of their R&R program using metrics aligned with program objectives. Below is a list of a few program objectives, paired with sample measures of success: Most Organizations that Measure the Results of Their Program Gauge Employee Satisfaction and Engagement As Figure 28 demonstrates, more than half of organizations (63%) measure the results of their R&R program. Those that do so most frequently measure employee satisfaction and engagement to gauge program results (94%). Figure 29 below illustrates the prevalence of using a certain method (or methods) to measure the results of the program. However, as mentioned above, organizations should select and track metrics that align with program objectives (e.g., employee retention, number of on-the-job accidents).





Other methods used: § Employee participation in the

program via number of nominations

§ Points awarded § Redemption of points for prizes

Measures of Success

§ Employee surveys indicate that the work environment has become more positive as a result of the program

§ Turnover has decreased since the program’s inception § The organization moved up in “Employer of Choice”

rankings § There have been fewer on-the-job accidents since the

program’s inception

Program Objectives § Create a more positive work environment § Decrease employee turnover § Improve the organization’s reputation in the external

labor market § Reinforce the importance of on-the-job safety

Yes63%

No37%



Figure 30: Do You Solicit Employee Feedback on Your R&R Program? (N=27)

Collect Employee Feedback to Continually Improve the Program Since employees must be engaged in the R&R program for it to be successful, organizations should continually gather employee feedback on the program to assess program effectiveness and identify areas for improvement. Less than Half of Organizations Solicit Employee Feedback on Their R&R Program As Figure 30 demonstrates, less than half of organizations (41%) collect employee feedback on their program. However, such feedback may be leveraged to improve the program by pinpointing problem areas (e.g., employees do not know enough about the program, employees are not motivated by the awards themselves, employees would prefer more informal recognition). Organizations may use the following tools to collect employee feeback: § Focus Groups § Interviews § Surveys





Yes41%

No59%



High-Tech, 19%

Pharmaceutical, 7%

Retail, 4%

Schools & Educational Services, 11%

Biotechnology, 4%

Consumer Products, 4%

Energy and Utilities, 4%

Heavy Manufacturing, 4%

Health Care, 7%

FinancialServices, 21%

Telecommunications, 11%

ProfessionalServices,

4%

APPENDIX: PROFILE OF RESEARCH PARTICIPANTS

The graphs below depict the industry, revenue size, and employee size of the 27 participants.

Industry of Participating Organizations

Revenue Size of Participating Organizations Employee Size of Participating Organizations

Regions in Which Participating Organizations Have an R&R Program

2,000–10,000, 30%

10,000–50,000, 44%

50,000–100,000, 19% Over 100,000, 7%

$2 billion–$5 billion, 41%

$5 billion–$10 billion, 15%

Over $10 billion, 33% $500 million–$2 billion, 11%

North America Only, 41%

Global, Including North America,

59%



NOTE TO MEMBERS: This project was researched and written to fulfill the research request of several members of the Corporate Executive Board and as a result may not satisfy the information needs of all member companies. The Corporate Executive Board encourages members who have additional questions about this topic to contact their research manager for further discussion. The views expressed herein by third-party sources do not necessarily reflect the policies of the organizations they represent.

PROFESSIONAL SERVICES NOTE: The Corporate Leadership Council (CLC®) has worked to ensure the accuracy of the information it provides to its members. This project relies upon data obtained from many sources, however, and the CLC cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the CLC is not engaged in rendering legal, accounting, or other professional services. Its projects should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from any errors or omissions in their reports, whether caused by Corporate Executive Board or its sources.

Documents

CLC Bench Marking Reward and Recognition Programs