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In a competitive market for employee talent, most companies focus on the salaries they can pay, in the hope that people will feel appreciated and happy to stay with their employer. If only it were that simple.
While the paycheck may be important for recruitment and retention, large companies and SMEs alike are seeing the benefits of recognition programs that make employees feel valued. In a study by SHRM/Globoforce , HR leaders had no doubts about how such programs brought benefits in areas such as the employee experience (89% of respondents), relationships (86%), organizational culture (85%), engagement (84%) and organizational values (83%).
The importance of recognizing people’s efforts and achievements is also understood by the world of SMEs. Research carried out by Sodexo Benefits and Rewards Services found that 95% of SME leaders think that valuing the efforts of their employees and recognizing their performance was the most effective way to increase their company’s performance. In addition, most of those leaders believed that SMEs performed better than large companies when it comes to employee recognition.
To make the most of such programs, though, companies need to understand what motivates their employees most. This will not only vary from one generation to another–with Baby Boomers, Millennials and Generation X all in the same workforce –but also from one location to another. Boomers tend to prefer rewards in the form of appreciation, promotion and recognition with a personal touch, while Millennials tend to prefer tangible rewards that are provided through a variety of technological channels, according to research by Sodexo Benefits and Rewards Services .
As for specific countries, team awards in China are highly appropriate and popular with employees who want to feel like part of a bigger success story. Recognition for teams, as well as individuals, is also valued in Scandinavia.
However, cultural differences require that award ceremonies in Scandinavian countries be kept short and low-profile, the size of a financial benefit should not be revealed to avoid embarrassment, and the awards themselves should be smaller and more frequent .
Clearly, financial rewards are only part of the recognition equation. A study of six countries in eastern Europe –Romania, Czech Republic, Hungary, Slovakia and Ukraine–found that meal vouchers and private health insurance were the most popular forms of benefits across the board, along with the provision of mobile phones. In Hungary, companies offer a “cafeteria” system where the employee can select from a menu of different benefits – such as meal vouchers, holiday accommodation or leisure facilities – within a fixed budget. In Poland, Sodexo Benefits and Rewards Services is providing recognition platforms in the banking sector that are focused on improving the performance of sales teams.
“Our solution combines the ability to monitor performance and then provide a flexible recognition system that is tailored to the customer’s expectations. Performance is rewarded with points, which are then redeemed either as Sodexo vouchers, which are accepted at 56,000 retail outlets here, Sodexo cards accepeted within the Mastercard network, or as consumer goods, such as electronic devices, sports gadgets, travel, or spa vouchers” explained Izabela Czarnocińska, Senior Product Manager.
Equally important, the implementation of these programs needs to be flexible enough to adapt to local conditions. For example, since 75% of India’s population have mobile phones, recognition solutions there need to be mobile friendly in order to be effective. They also need to be tailored to local cultural norms. In China, for example, treats from a high-end bakery that can be shared are popular , but giving clocks or watches is to be avoided at all costs, as they are seen as bringing bad luck and reminding people of their mortality. Similarly, avoid giving any gifts that involve the number 4, as it is associated with death in Chinese culture, and choose air filters to counter the country’s polluted air instead.
Such local knowledge is essential when designing recognition programs, and is one reason why a global operator like Sodexo Benefits and Rewards Services is able to help companies of all sizes to meet the aspirations of their employees. Thanks to its presence in 35 countries, its teams can offer a range of incentive and recognition solutions, whatever the culture or population.
Iain Thomson, Director of Incentive & Recognition, describes the programs deployed by Sodexo Benefits and Rewards Services in the UK.
They vary between recognizing success or safety, for example, but they all aim to drive behaviors that are aligned with the customer’s values. All clients face different challenges, such as organizational change or the embedding a new corporate culture. Our starting point is to understand their objectives, and then to build a platform for their specific needs – typically featuring e-cards, product catalogues and local awards.
The recognition market is relatively mature here — and is shifting from employer-driven to employee-driven. So, we give clients a ‘health check’ of their working conditions, base pay, benefits, and health & wellbeing programs, before we add a recognition package. That package is increasingly tech-based and ‘multi-tiered,’ covering staff and the self-employed. Meanwhile, as firms become more disparate and people work remotely, our platforms are moving from being recognition tools to one-stop shops for all an employee’s HR needs.
Our programs show that engaged employees drive 43% more revenue — due to more productivity, less absenteeism and greater retention. We have a utility customer that uses e-cards for peer-to-peer recognition for a job well done, with 36,000 cards sent in 2013. By 2017, that figure–which reflects engagement–had risen to 88,000 thanks to our program. For a logistics firm, we increased retention and cut recruitment costs with a ‘recommend a friend’ program for new hires, which benefits employees and drives HR efficiencies.
Juan Andrés Vizcaya, Incentives and Recognition Manager, Chile, outlines the programs delivered by Sodexo Benefits and Rewards Services in his country.
Most are either vertical, from managers to their direct employees, or nomination programs, where nominators and nominees recognize actions that benefit a company. However, we also implement award programs for special occasions, usually at the end of the year, and systemic programs that recognize behaviors which reflect corporate values or are related to productivity. We also offer peer-to-peer recognition, though there is less demand for this.
The recognition market is more active now, as more firms are joining Great Place To Work, which focuses on improving employee engagement. Companies want to create a recognition program but, as they lack the expertise, they need consultancy as a first step, and then the physical elements (cards) or digital platforms. We have adapted our offer to include an initial advisory stage and recognition training to help clients make the most of our tools.
In some cases, we gather feedback from the employee with a Likert scale survey – to find out how managers are recognizing their staff – but this information is only available to the HR owner. ROI for recognition programs is not easy to calculate, although employee engagement and GPTW surveys do evaluate this KPI. In one of our programs, we developed a solution for retail chain Tiendas Corona that recognized sales people for signing up customers for its loyalty card. The number of cardholders rose by 10%.
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