How to Design Recognition Programs That Improves Employee Engagement and Retain Top Talent

For any organization to be highly successful, it should have talented employees who are motivated to achieve results and are highly engaged with a clear vision of short and long-term goals. It is therefore not surprising that in a recent survey of over 800 HR Executives published by Human Resource Executive Magazine in August 2010, 46% of executives indicated that one of the biggest challenge they face is ensuring employees remain engaged and productive. Some of the principles and practices of fortune 500 companies are revealed here.

Best practice research indicates that organizations that reward and recognize their high performing employees have significantly higher employee engagement and achieve their business objectives.

What then is employee engagement?
Employee engagement is the buzz phrase for the sum total of all factors that drive employee performance and retention in an organization. The Gallup organization defined employee engagement as "an employee's involvement with, commitment to, and satisfaction with work."


AlphaMeasure, another company that provides organizations of all sizes with a method for measuring employee engagement defined engagement as "the level of commitment and involvement an employee has towards their organization and its values."

Research on engagement, job satisfaction, retention and stress levels
Recent research indicates that high potential employees who are engaged are unlikely to leave their company, other studies indicates that when employees are highly engaged they always measure high on job satisfaction surveys, are less likely to leave and experience low stress levels at work (Evisia Learning, 2006). This means that whenever employees are highly engaged on the job they also experience high job satisfaction. The relationship between employee engagement and job satisfaction will be addressed in a future article. The Hay Group found in a study that highly engaged office workers were 43% more productive than less engaged co-workers.

Various studies have found that among other factors, the influence of employee engagement, the employers' culture of rewards and recognition play a key role in positively influencing employee engagement, job satisfaction and retention of critical talent.

Key principles to guide the setup of reward and recognition programs
The following are some of the principles that should guide the development of an effective recognition program in any organization:

· Recognition awards must be linked closely with the organizations' business plan, culture, values, leadership principles and business results. Understand the factors that affect your organization’s strategy

· Teams or units that foster diversity and inclusion, and innovation should be weighted high in selection for rewards and recognitions

· Must be communicated well to employees and managers at all levels. Evidence points that organizations that communicate programs well have employees who are more satisfied than those who do not

· Establish a reward mix that aligns with behaviours that support your organization objectives

· Programs should offer rewards that are meaningful and flexible for employees

· A variety of awards should be offered and for large corporations with multiple business units and locations, there may be corporate and divisional programs with large annual awards at the corporate level, and small on the spot business specific awards at the divisional and locations levels

· For an effective recognition program for a large company there must be a balance between centralized to decentralized structures for the administration of the programs. Decentralized structure for the business level and location that are tied into a centralized corporate program. On-line administration of any recognition program is highly recommended

· To ensure that managers are not restricted in the usage of the programs, budget should be centralized. On-line training of managers in the selection of employees for awards should be mandatory and usage may be tied to a manager's performance

· A significant omission in most reward and recognition programs that could negatively affect team building and performance is to base awards only on individual merit. Corporate level awards should have a reflection on the immediate teams of the corporate award recipients by way of team awards

· Establish a credible evaluation process. Employee feedback on the operation of the reward program is key for improvement and acceptance by employees


Recommend the following practices:

· Organizations should consider annual corporate awards linked to their leadership principles, culture and business objectives. Organizations may vary objectives periodically to reflect current business objectives at the corporate and division levels or at various locations, and these should be linked to spot awards.

· Clearly defined and communicated criteria for employee selection for awards at the team, business unit and at the corporate levels. Any criteria selected should be such that individuals who have won a number of team awards goes on to win business unit awards before they qualify for nomination for a corporate or company wide awards.

· Independent internal panels should be appointed for corporate awards.

· To enable teams support their strong candidates and to encourage team performance, corporate awards program, should consider giving small awards to individual team members of recipients of corporate awards.

· Fair distribution of corporate awards among all business units based on a criteria, it could be the business' overall input to corporate results.

· Have a second sober look at any program developed, may start with a pilot project in a small division before implementation organization wide.