Organisations that dedicate 1 percent or more of payroll to values-based rewards and recognition are more likely to perceive greater impacts on financial outcomes.
Some HR leaders are questioning the accuracy of old human capital management processes such as performance management according to the 2016 SHRM/Globoforce Employee Recognition Survey. The survey also reveals recognition programs tied to organisational values are perceived to outperform other programs when it comes to delivering a return on investment, reinforcing corporate values, and maintaining a strong employer brand. The survey results were announced 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.
The survey shows that 46 percent of organisations cite employee retention as a top workforce management challenge. More than one-third (36 percent) of the organisations surveyed see employee engagement as another top challenge, one closely related to turnover. The survey of 798 HR leaders also found that traditional performance management practices may be failing to properly measure employees’ work in many organisations. 40 percent surveyed said they do not think performance reviews are an accurate appraisal of employees’ work. Another 19 percent said they’re “not sure” if their reviews are accurate. As HR professionals look to bring more humanity into the performance management process, they can leverage employee recognition programs to create coaching cultures within their organisations.
Key insights and findings from the report include: Retention, employee engagement and recruitment remain top challenges. For the second year in a row, employee retention/turnover topped the list of workforce management challenges. Previously, workers may have tolerated a less than satisfactory work experience for the sake of job security. In today’s job market, more power is in the hands of job seekers. Workers have more confidence and options to explore better opportunities outside of their organisation. Organisations that dedicate 1 percent or more of payroll to values-based recognition programs are more likely to perceive a strong return on investment, instill and reinforce corporate values, and maintain a strong employer brand.
The survey found that in 2016, 60 percent of organisations had a values-based recognition program, up from 50 percent in 2012. Conversely, the number of organisations with recognition programs not tied to values was down to 21 percent in 2016, compared to 27 percent in 2012.
- HR leaders at organisations that dedicate 1 percent or more of payroll to recognition programs are nearly three times more likely to rate their program as excellent (26 percent), versus companies that spend less than 1 percent (9 percent). In contrast, companies that spend no budget on recognition are five times more likely to rate their program as poor by HR.
- HR leaders with values-based recognition programs with a budget of 1 percent or more of payroll are 3.5 times more likely to say their program helps HR professionals attract new job candidates. They are also nearly two times as likely to perceive it delivers a strong return on investment (88 percent versus 48 percent), and two times more likely to help retain employees (88 percent versus 44 percent).
As organisations strive to create positive employee experiences, HR leaders should encourage continuous conversations to boost employee performance. The survey strongly suggests that HR professionals are evaluating their current performance management practices.
- As mentioned above, 40 percent of HR leaders feel performance reviews are not an accurate appraisal of employees’ work.
- Twenty-one percent of HR leaders feel coaching is directly tied to employee performance.
“In order to be successful, organisations need to win the hearts and minds of employees,” said Eric Mosley, CEO of Globoforce. “A more human-centric approach, where employees are treated not as human capital, but as people fosters greater humanity and creates more positive employee experiences. It’s also crucial for HR leaders to take a fresh look at compensation structures and evaluate the value they bring to employees and their respective companies. As our study shows, social recognition can directly impact employee experience and financial outcomes.”
* The SHRM/Globoforce Employee Recognition Programs Survey was commissioned by Globoforce and conducted by the Society for Human Resource Management from April 25, 2016, to May 22, 2016. This is the sixth deployment of the survey since its launch in 2011. This edition of the survey was sent to randomly selected SHRM members at a manager level or above. The final sample of the survey was composed of 798 HR professionals who are employed at organisations with a staff sise of 500 or more employees. The survey had a response rate of 13 percent and a margin of error of +/-4 percent. Results include responses from organisations in the U.S. across a wide range of business to business and business to consumer industries.