April 10, 2013 at 7:42 AM ET
Is a pat on the back too much to ask?
Companies believe they’re doing a terrific job of motivating employees, but American workers don’t see it that way. After weathering the recession and being asked to do more with less, they’d like some kudos for their efforts.
“We found that employees with one foot out the door clearly feel recognition in their company is not frequent enough or fair enough,” Globoforce, a company that designs corporate rewards programs, said in its twice-yearly Mood Tracker survey last fall. About half of the employees who were looking for a new job said it was because they weren’t getting those “attaboys” for jobs well done.
When the economy was at its trough, employees didn’t mind giving up perks and working harder, because at least they still had jobs. But now things have changed: Corporations earned a record-high $1.75 trillion in the third quarter of 2012, and compensation for top executives has climbed even as wages for rank-and-file have stagnated.
A survey last fall of medium-sized and large companies conducted by the Society for Human Resource Management and Globoforce, found that although about three-quarters of respondents had programs in place to recognize employee achievements, this number slipped from the previous year.
That’s still a healthy majority, but there’s evidence that the decrease might be a longer-term trend dating back to the start of the recession. Surveys conducted every three years by the group WorldatWork found that recognition peaked in 2005 and 2008, when 89 percent of responding companies had recognition programs. In the group’s 2011 survey, that number slipped to 86 percent, and the amount they spent on these programs also dropped.
“There is an impact when things are taken away, particularly in this day and age when there are minimal increases in salary,” said Rodger Stotz, chief research officer with the Incentive Research Foundation. “The recognition becomes more valuable because it shows the organization values and appreciates the employee, and it has an emotional impact.”
Efforts to recognize good work and boost morale don’t have to be expensive, recognition experts say.
“My experience has been these programs don’t cost a lot of money, but there’s a lot of bang for the buck,” said Bruce Elliott, manager of compensation and benefits at the Society for Human Resource Management.
“It creates a culture of positivity,” Charlie Ungashick, CMO at Globoforce, said.
The problem is that the financial benefits of more motivated workers aren’t always evident. Much of the research conducted to assess results is attitudinal rather than quantitative, and the losses the come from dropping recognition efforts are similarly hard to quantify, said Frank Mulhern, associate dean of integrated marketing communications program at Medill School of Journalism Media and Integrated Marketing Communications at Northwestern University. “It’s hard for a CFO to see that.”
A little more than three-fifths of respondents in the SHRM survey said their company rewarded employees based on performance, but the people doing that hard work don’t see it that way. Just 37 percent of respondents in Globoforce’s Mood Tracker survey said people in their company were fairly rewarded according to their job performance.
More than half of workers say being “valued and rewarded” is what’s most important in choosing where to work, employee recognition program company Achievers found in a survey conducted last year, but a November Gallup poll found that slightly less than half of American workers are satisfied with the amount of recognition they get for the work they do.
Ungashick said companies were experimenting with new ways to give workers that pat on the back, like peer-to-peer recognition. And a growing number of managers are embracing benefits like flex time and working from home. But these “perks” are a double-edged sword: A Bureau of Labor Statistics study found that up to two-thirds of the time employees spend telecommuting is actually on top of the regular 40 hours they put in every week.
Industries with labor shortages see the most feel-good investment. Elliott says Silicon Valley, where big tech firms fight for top talent in programming and engineering, is a hotbed of incentives and little extras. After becoming CEO at Yahoo last July, Marissa Mayer implemented free lunch and gave employees iPods. (She also demanded that employees work from the office.)
But this sort of lavish perk isn’t the norm in most workplaces. “This emphasis on engagement, much of that is being pioneered in the high tech industries where there’s such a high value placed on human capital,” Mulhern said.
It’s another story at the lower end of the labor-market spectrum, where many of the jobs lost in the recession have been recovered, he said. “It’s more like the cost benefit isn’t necessarily there... for employees where there’s a high turnover and they’re easily replaceable.”