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Impact of Crowdsourcing on Employee Performance

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Survey results show rise of new social technologies to address limitations of traditional performance reviews.

Results of the Spring 2013 SHRM/Globoforce Employee Recognition Survey*, were announced today by Globoforce a leading provider of social recognition solutions, and the Society for Human Resource Management (SHRM), the world’s largest association devoted to human resource management. According to the survey, 74 percent of respondents say crowdsourced recognition data** provides a more accurate picture of employee performance, and 90 percent say feedback from an employee’s peers is more accurate than that of one supervisor or manager. In the Spring 2013 survey, responses from more than 800 HR professionals surveyed show the impact of recognition on employee engagement, satisfaction, and performance reviews. Key insights from the survey include:

Crowdsourced feedback and recognition can address the limitations of traditional performance reviews. Of the companies surveyed, 77 percent conduct performance reviews once a year. Still, employees overwhelmingly feel more frequent reviews by multiple sources would provide more accurate input and create a more effective recognition programme. Key findings include: 85 percent of companies are currently using or would consider using social recognition (a system that empowers employees to recognise each other for great work).
78 percent say crowdsourced recognition would be helpful data to incorporate into performance reviews; 74 percent currently use or would consider mapping recognition awards against performance rankings/ratings. Investment in recognition programmes lowers workforce frustration and boosts employee satisfaction.

Data from the survey shows a connection between employee satisfaction and a company’s recognition programme spend. According to respondents, higher budget allocations result in less frustrated, more satisfied employees. Employees at companies that invest more than one percent of payroll in a recognition programme are: Nearly 50 percent less likely to say they are often or very frustrated with their work environment (compared to employees at companies that spend less than one percent of payroll on recognition). More than twice as likely to report increased employee productivity at their company (versus companies that spend less than one percent of payroll on recognition). Praise is a powerful motivator for employees. When that praise is coupled with a prize, employees’ performance is driven even further. SHRM/Globoforce survey findings include: 83 percent say employees are further motivated by recognition that includes a reward than recognition with no associated reward (i.e. “free” recognition). 94 percent of respondents say positive feedback has a greater impact on performance (versus just six percent who say negative feedback is the better motivator).

“The arrival of the crowdsourced performance review is a welcome paradigm shift in the human resources industry,” said Eric Mosley, CEO of Globoforce. “An innovative, more complete system for providing team members with accurate, consistent feedback creates happier employees and more productive work environments. The potential behind the concept of crowdsourced reviews is exponentially profound,” said Alexander Alonso, SHRM’s vice president of research. “This practice has potential cultural and business implications for employee performance and overall company success.”

Survey Methodology
* The SHRM/Globoforce Employee Recognition Survey examines employee engagement and performance management, as well as other key metrics associated with employee recognition. The survey is commissioned by Globoforce and conducted in collaboration with SHRM. There were 803 responses from organisations with 500+ employees, resulting in a margin of error of +/- 3 percent at a 95 percent confidence level. The online survey was conducted by SHRM from March 14-24, 2013.

** For the purposes of this survey, crowdsourcing is defined as the collection of feedback from all employees within an organisation.

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