Why is employee recognition more relevant than ever?

Employee recognition is an “inherently adaptable” aspect of the total reward package that can help employers respond to some of the key issues currently disrupting workforces, argued speakers at Xexec’s latest industry breakfast event, held at The Ivy on Thursday 7th March.

Jamie King, Head of Global Reward, at Xexec and Masha Boldyreva, Interim Executive Vice President of HR, Colt Technology Services, both discussed how employee recognition could encourage specific values and behaviors in the workplace and, crucially, unlock discretionary effort amongst staff, at a time when traditional notions such as loyalty were becoming increasingly problematic.

The trends disrupting modern workforces
Jamie King kicked off the discussion talking about contemporary disruptive trends – including Artificial Intelligence (AI) and the democratisation of the workplace – and how these were creating challenges for HR and reward professionals.

In Xexec’s recent survey of 1,000 employees from the UK’s largest companies (those with 500+ employees), the growing influence of AI and the impact of the gig economy both featured high up on the list of employee concerns with regard to job security. But what about how those factors might impact employers?

Much has already been observed about the potential for AI to replace manual labour roles, but what’s next? “Creative industries, professions and even highly skilled technical jobs such as medicine are also at risk” argued King. In fact, global management consultant McKinsey has predicted that intelligent agents and robots could eliminate 30% of the world’s human labour.

At the same time the advent of the gig economy has the potential the really shake up the notion of loyalty amongst employees. Statistics suggest that 50% of employees are planning to change career in the next 5 years , and 29% of workers in the USA were already undertaking gig work in 2015.

Recognition is inherently adaptable 
“Against these changes the question of how to create loyalty in the modern workforce becomes more pertinent than ever” suggested King. “Will loyalty even be required?” Whilst Xexec was already giving a lot of thought to how employee benefits might need to be redefined over the next decade, in order to respond to these challenges, the nature of employee recognition meant that, in many ways, it was better suited to addressing these issues than the likes of employee benefits.

Employee reward and recognition is inherently adaptable” argued King. “You want it to change with your industry and company culture and, as a living solution that tends to run in phases, it’s very well suited to run with these changes.”

Picking up on King’s point about loyalty, Masha Boldyreva went on to suggest that, for Colt Technology Services at least, loyalty was not a key concern when it came to employee recognition, for the disruptive tech business (a global provider of agile, high bandwidth connectivity solutions), “encouraging positive behaviors and unlocking discretionary effort were the primary objectives”.

Recognition on a global scale 
Boldyreva talked about the launch of Colt Inspire, a comprehensive employee portal for the business’ 5,000+ employees working across 22 countries.

Following a strategic decision (after the business was taken private) to be disruptive and instill a challenger culture within the organisation, Colt introduced a number of success behaviours and values that supported this cultural change and could be easily measured. These included things like “shake things up” and “win big”.

It was against this backdrop that the business’ recognition framework was revamped. Working with Xexec, Colt launched a “fantastic new portal” allowing colleagues to nominate each other for multiple financial and non-financial awards; including peer-to-peer thank yous, special occasions, instant financial awards, quarterly awards, career milestone awards and a CEO award. In response to the international footprint of the organisation, Colt and Xexec developed a multi-currency programme, incorporating cost of living index calculators alongside local country redemption catalogues with retail vouchers and multi-currency prepaid cards.

The user-friendly nature of the portal – it was built for mobile, tablet and desktop devices and includes a ‘Facebook’ style newsfeed – meant that very little investment was needed in training.

The challenge for Colt was not lack of interest or support for employee recognition, rather ensuring that recognition was “done properly and for the right reasons”, suggested Boldyreva. In fact, Colt was already spending over 2% of payroll on recognition, yet with a system that was not user friendly, with little governance and not fit for purpose for the business’ global workforce, particularly with regards to issues such as cost of living parity, etc.

Recognising the ‘how’ and not the ‘what’
One of the key issues Boldyreva encouraged Colt’s board to reconsider at the outset was why recognition rewards were being made and, in particular, where recognition sat within the total reward package. “Whereas salary and bonus are very much about the what i.e. doing your job and/or exceeding your targets” she argued, “recognition has to be about the how.”

At a strategic level, this fed directly into the functionality of the portal. Aspects such as the e-cards (with their powerful words and imagery evoking the business’ ‘challenger’ culture) really came to the fore. Monitoring which behaviours were being recognised was also ‘hugely insightful’.

Having the right systems and governance in place was crucial in ensuring that a recognition programme was fair and sent the right messages to staff. From Colt’s perspective it was important to adjust award values across the globe to account for differences in things like cost of living. Reporting was also important, with a results dashboard being sent to the executive team every quarter to keep the team abreast of budgetary issues. This also generated “a number of interesting conversations between different functions within the business”, said Boldyreva.

Other key lessons 
Boldyreva concluded by considering that though the business had made great strides with regards to employee recognition, the scheme was “far from perfect” and the ability to review, analyse and make ongoing changes was crucial in dealing with some of the challenges that would inevitably arise. These included issues such as ensuring consistency on a global scale (“an ongoing challenge”) and tackling some of the bad habits that the business had historically gotten into with regards to recognition.