Sunday, January 6, 2008

Employee recognition programs in practice

In today’s highly competitive global economy, many organizations are under severe cost pressure. They’ve responded with layoffs, wage freezes, and increasing employee work loads. Employees, in turn, are feeling overworked and stressed out. This environment makes recognition programs particularly attractive. Why? Because recognition provides a relatively low-cost means to stimulate employee performance.

It shouldn’t be surprising, therefore, to find that employee recognition programs have grown in popularity. A 2002 survey of 391 companies found that 84% has some program to recognize worker achievements and that four in 10 said they were doing more to foster employee recognition than they were just a year earlier. A recent study conducted by the Gallup, identified employers recognition as one of the twelve key dimensions that describe great workplaces.

Wipro believes that reward and recognition systems are some of the fundamental ways of improvement motivational level. The company has a unique package called Encore, which is essentially a basket of non-monetary rewards given to motivate employees and recognize excellent work performance. For example, award Feather-in-My-Cap, is an on-the-spot recognition of an effort awarded to a project or project team; Dear Boss recognizes the positives of a good boss, including technical, managerial, and leadership skills. Awards like Mastermind, which notes the most innovation solution or idea in Wipro, and The Wipro Hall of Fame recognizes superlative performers in different roles as well as superlative team performances.

In NIIT, there is a practice of naming a conference room or office or training room after the name of the most outstanding employee of the year. The naming is done ceremoniously, the employee’s family is invited, a cake is ordered; and all the employees assemble for the felicitation. At Federal Express, rated one of the best work workplaces, employee can get one of FedEx’s 500 aero-planes named after his / her child. RPG managers give certificates to employees to facilitate small achievements and the good work done by them.

Two of the most popular methods of recognizing employees are by giving gift certificates and cash rewards. The most common reasons for giving an award are length of service and exceptional performance. In 1998, Price-water House had a “Thank You Store�? for employees to select gifts and thank you cards for supervisors, managers, and office assistants. Johnson & Johnson has peer-to-peer recognition programs, where employees submit nominations on behalf of other employees, teams or oneself. All nominations are reviewed for a Merit Award and all Merit Awards are reviewed for the Chairman’s Award. The Eureka Award at HCL Comnet is for the entrepreneurs who come up with the best business idea. The Value Creator Award is the most coveted and sought after among the awards given in appreciation of extraordinary individual initiative and innovation.

Gotcha recognizes top performers and ranks them on merit. Special vacation packages are given to employees who excel in their targets. Eicher uses a mix of monetary and non-monetary rewards. The financial package helps in sustenance and basic needs fulfillment. The non-financial part helps in recognition and fulfillment of higher order needs. In the non-financial part, Eicher offers perks like study leave, trips, special training, challenging project opportunities, and flexible timings based on individual need.

In India many companies like Larsen & Toubro, HLL, P&G, Century Enka and others encourage suggestion from employees on cost savings, energy conservation or quality improvement or increase in sales. The suggestions are periodically reviewed and few employees may get one time cash rewards based on he quantum of savings their suggestions can generate. This cash rewards system on suggestions is mostly up to junior management level.

Some companies allow executives to make their own mix of salary packages. Some perquisites are offered on a use-or-lose basis. They cannot be monetized, this is to restrict monetization of perks which otherwise would increase cash outflows to unacceptable levels. In the year 2000, HICOM introduced three awards for employees who were nominated as ‘best leader’, ‘best motivator’, and ‘best employee’. In the same year, the company also introduced the new idea of appreciating subordinates through flower-shaped cards. In addition, the HR department put a big wallboard titled ‘initiatives.com’, which was filled with information on the initiatives taken by the employees in the workplace and the appreciation of their initiatives. The management as a policy honors an employee who completes five years of services in HICOM with a gold plated appreciation plaque.

In spite of its increased popularity, critics argue that employee recognition programs are highly susceptible to political manipulation by management. When applied to jobs for which performance factors are relatively objective, like sales, recognition programs are likely to be perceived by employees as fair. However, in most jobs, the criteria for good performance are not self-evident, which allows managers to manipulate the system and recognize their favorite employees. When abused, this can undermine the value of recognition programs and lead to demoralizing employees.

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