Effective Employee Feedback Combined with Employee Recognition

Employee feedback is important, so is recognition of positive performance.  They should go hand in hand.  

Over the years I’ve been amazed at the stories I’ve heard about managers that don’t know how to give feedback to difficult employees.  So, they just avoid it entirely or just give them average feedback thinking that average is bad.   In many ways it’s like what some teachers do with their students just to get them passed and on to the next grade. 

No one wants to deal with negative performance issues.  No one wants to be the bad guy and tell it like it is, so they sugar coat things, they aren’t direct and they don’t tell the truth.  That just delays the issue and pawns the employee off to the next person who has to manage them. 

Unfortunately giving feedback and is more subjective than objective.  Everyone looks at employee feedback through their own eyes and appraise employees accordingly.  What one sees as an inadequacy, another might see as average performance or even as strength?  As much as companies try their best to appraise the performance and provide feedback objectively it’s not always easy to do.    

Of course when you do have a very difficult employee you won’t always be able to salvage them.  In those cases, it’s ok to cut your losses and recommend that they might want to look for a position that is more suitable to their own needs.  If not, they will likely become disengaged, or worse yet actively disengaged, and before you know it will have brought down some other less that engaged employees to be totally negative.  

In the meantime, do your best to know and utilize the ways to effectively provide feedback, positively or negatively.  If it is negative, when they make a concerted effort to change and improve their performance, but sure to recognize that change with positive reinforcement.  Of course when it’s positive performance and the employee’s accomplishments are particularly noteworthy, then by all means praise them and recognize them for that performance.   

Many folks have written about all the ways to give effective feedback.  We came across thisarticle from last year that we feel is well done and provides all you’ll need to know to start an effective feedback campaign for you employees.   

And, if the feedback is very positive and you are so inclined and want to give them a small reward along with the recognition, think of the Award of Choice card (a shameless plug).  It is a terrific system that gives the employee terrific choice with no administrative fees for you.

Incentives or Recognition – They Never Seem to Learn the Difference

Will corporate award planners every truly understand the difference between an incentive program and a recognition program?  Try as some of the experts in the industry might to educate them; these two terms are constantly being interchanged.

The EmployeeEngagement Alliance defines the two types of programs as this…

“Incentive programs are used to drive behaviors conducive to practically any business objective. Recognition programs are used to recognize individuals whose accomplishments were particularly noteworthy.” 

We’ve addressed the issue on several occasions but many folks still persist on confusing them.   Here’s an excellent post from our friend PaulHebert at I2I Incentive Intelligence that will give you one way of looking at a difference between the two.  Another great way to differentiate them is by reading this post from the Compensation Café on the Right vs WrongIncentives.  As this article comes to us from a well-respected blog on cash compensation, it gives us a good look at the same things we need to consider when discussing incentives or recognition to improve performance.   

The key paragraph in this compensation piece is the discussion of a financial rationale and these questions… 

“What will the company receive in return for the increased costs of an incentive program?" and “If you are planning to increase your targeted compensation costs of an affected group, how will you answer the ROI question?

All well planned non-cash incentive programs follow the same methodology.  They plan for an ROI.  This is the single largest difference between incentives and recognition! 

The award industry has struggled for years to apply any sort of meaningful ROI to a recognition system.  They haven’t figured out a good way to do it and never will based on the metrics and fundamental structure they use for these types of programs. 

And as mentioned in the Compensation Café article…

Caution: You had better provide a business rationale, and not subjective phraseology like “survey says” or “everyone else is doing it" or even “it’s the right thing to do.’ Management tends to frown on such trivial rationalizations.

So for all corporate award planners, please get your definitions straight.  Regardless of what all the prize peddlers in the industry tell you, you won’t change behavior and drive significant results with a recognition program.  Recognition programs can provide you with a whole different set of benefits.  You can drive results with an incentive program that is well designed and implemented, but it won’t necessarily recognize specific behaviors of employees whose accomplishes are particularly noteworthy.

The Disadvantages of Sales Incentive Programs

This is the kind of article that is written by those who think they understand incentive programs, but is what he says correct?  Unfortunately much of it is correct all too often, but it is not the norm, nor is it what happens when the incentive program is designed and implemented by professionals in the industry.  While the author offers a list of disadvantages of sales incentives, they are not disadvantages of using sales incentives them; they are disadvantages of how they are used.  Let us review the points mentioned in the post and how they differ from ours. 

Rewards for Top Performers

“Most sales incentives tend to reward only the top performers ...some of these representatives may already be selling at a high level. They do just enough to collect their bonuses or trips”

Most top salespeople will be the top salespeople regardless and will always work to be the top.  For them it is intrinsic.  If historically only the top salespeople earn, the objectives and rules structures were not set properly to include 80% of the universe, not just the top 20%.  A properly designed system will motivate the majority to better their own performance.  In essence, they should compete with themselves.

Narrowly Focused

“Many sales incentives are also narrowly focused on just sales. This causes sales representatives to focus only on revenue-generating activities.”

Absolutely!  That is as it should be.  If you want them to focus on something else then incent that objective as well, but good salespeople are success driven. And that’s where you want them to be.  The best programs will be those that are narrowly focused with qualifications to avoid other issues.

Costly

“Sales incentives also have high associated costs. Small companies which fail to tie incentives to the right performance variables may needlessly be paying tens of thousands of extra dollars per year for bonuses, trips and impromptu rewards.”

This should never really happen.  Before you implement any sales program, enough time and due diligence should be spent so your measurements and objectives are tested against historical averages, taking all current marketing conditions into consideration.  Any client who spent tens of thousands of dollars needlessly did a poor job of planning.

“The best sales incentives should be equally tied to increases in new business and sales of specific products and services. Some products or services may be ignored for higher-priced products or higher volume sales. “

Not necessarily.  You can’t solve all problems with one program, but there are ways to tie them all together with one program using combinations of these other objectives as qualifiers or bonus earning opportunities when the main goal is achieved. 

A professional incentive salesperson has the experience to turn these perceived disadvantages into advantages that will make your program the best it can be.   As they say, you wouldn’t go to foot doctor to fix a heart ailment, would you?  For one of the best incentive consultants in the business, check out Paul Hebert at I2Iincentive Intelligence.

What Happened to Employee Engagement in 2011?

Employee engagement, you know that catch-all buzzword that speaks to how well employees are feeling these days?  Well it seems like it wasn’t all that rosy in employee land last year.   

AonHewitt, the consultancy that specializes in HR services along with a raft of other fun stuff like health and benefits, compensation, talent and organization, mergers and acquisitions, investing etc. has released data from their 2011Employee Engagement Database showing that engagement is still lagging.  Given the state of the economy and the fact that we have a very dysfunctional government running things, I’m kind of surprised that employees aren’t tearing their hair out by the roots.  Disengagement might be the least of our worries. 

But nonetheless, the 5700 employee database which represents over five million employees worldwide, reveals …

“an engagement level of 56 percent for the end of 2011, which is the same as 2010, but lower than 2009 (60 percent) and 2008 (57 percent). Traditionally, engagement levels between 65 percent and 100 percent represent a high-performing culture; 45 percent to 65 percent indicate the workforce is indifferent to organizational success or failure; and anything lower than 45 percent represents a serious or destructive range.” 

It seems that the largest drop in engagement comes from employees’ perceptions of how companies manage performance.  Or in other words, employees think their bosses have not provided the proper level of management that leads to better productivity.  They also don’t do a very good job of connecting the employees performance overall to company goals.

Sounds reasonable to us, not being in the corporate world anymore we really wouldn’t know that businesses out there don’t do a very good job of connecting performance to goals.  Frankly, that sounds like a communication problem to us.  

The report goes on to state that significant numbers of employees are not motivated to work beyond job requirements and are thinking of leaving in the near future.  Not sure what “significant” means, maybe over 50%, but the way that the majority of employees have been treated in this bad economy, I’m surprised it wasn’t higher. 

When discussing what drives this engagement, they point to many things but as always “appropriate recognition beyond pay and benefits for employee contribution” is high on the list.  Recognition has been on this list for years.  When will the guru executives every really understand and practice it?  It’s surely the easiest fix of anything else they can do. 

Happy Employees Aren’t Necessarily Productive Employees

Just in time for the New Year comes this research that attempts to negate the value of employee recognition programs.  Well at least it tries to negate it and is otherwise written supposedly to “challenge existing assumptions and provide an impetus to further exploration.”  They probably should have said “provides an impetus for further clarification” as the research was not very evident nor clear and certainly provided no evidence to support conclusions drawn. 

Frankly this piece is nothing more than a compilation of re-occurring thought on the values of recognition awards to change behavior in the workplace and is more self-promotional than anything else.   In addition they throw in some thought dredged up from the works of Herzberg in the sixties as if to authenticate their position, all of which makes for a hodgepodge of creative deductive reasoning that leaves you a tad baffled.  Hey, we’re not saying their conclusions are wrong, just a little confusing. 

As is often the case, the Impact Achievement Group, who did the research, doesn’t seem to have a clue about the difference between an employee recognition program and an employee motivation or incentive program.  The also hang their case on “happy employees” not being productive, but productive employees are “happy.”  Not sure where the “happy” came into to picture, we’ve always heard “engaged” as the buzz word of the day.  We’ve been designing and implementing recognition or incentive programs going on 40 years and have never used “happy” as the objective of the program.   

We believe the issue here is who is best equipped to assist companies in improving employee performance.  There are many who claim the high ground on this, not the least of which is the consultant types as mentioned here whose income is dependent on assessment, coaching, training etc., but not awards.  Others include those research types who want to research every nuance possible of the employee world.  Then we have the communication companies who feel that all you need to do is communicate better and your woes will be gone.  Then you have the recognition and award companies who hang their hat on the award as the driving factor.  Take your pick, read up on all of them, you’ll find that they all say much the same thing, but use their main money making deliverable to drive the plan.   

If you believe that employee engagement (or happiness) is a behavioral issue (which we do) you might want to consider tackling the issue using the behavior model.   In it you’ll find that research, training, communication and measurement and feedback are all part of changing behavior, with positive consequences as the piece to close the loop and continue the behavioral circle.   As “positive consequences” include the reward piece, than it would seem that it is kind of difficult to extricate the reward and recognition from the total.  Or are we just being too simplistic here? 

Let’s stop thinking about whether reward and recognition does or doesn’t work in helping to engage employees and improve performance.  There is plenty of evidence out there to support that conclusion.  I don’t know if engaged means they’re happy, but it does mean they are performing better than those who are not engaged.  What do you think?

Unwanted gift cards? They Can Be Avoided!

Since the passage of the Card Act in August of last year we’ve seen many articles on how to sell your unwanted gift cards for cash.  Today we found nine of these companies who purchase unwanted cards online and even one website that compared pricing on the top four companies. 

The concept is simple.  You tell them the value on the card you have and they will quote you a price to purchase your card.  Each company has different terms and the price will usually fluctuate based on the popularity or availability of the card.  They will ask you to send in your card, and recommend that you send it insured First Class (a cost you need to consider as decreasing your card value).  They then resell the card at a higher price.   

Most of these companies sprung up over the last year or two and do nothing more than implement a form of arbitrage…buying a product low and selling it high.  With the explosion of gift cards in the consumer market, having these types of companies was inevitable, and they actually do some gift card award companies a big favor.   

Gift cards became the unquestioned #1 employee award for several reasons:  easy to use, tremendous choice, dollar for dollar value, etc.  But, they never totally eliminated the problem of gift or award giving and not knowing what kind of gift to give.  To give or reward the right gift card does require a little thought and understanding of the recipient.  When you just purchase a card without knowing anything about the person you’re giving it to, the above mentioned companies come into play and the when the recipient doesn’t want the card they simply turn it in for discounted cash.  The same holds true for all those companies who don’t know what to give their employees, but think that one or two cards with general appeal will suffice.  They don’t.  You won’t hit the hot button of all your employees with one or two cards and some will be disgruntled and resort to turning it into discounted cash. 

When you give a card like the Award of Choice that is redeemable for just about every popular merchant, restaurant or service company in the country, you practically guarantee that the recipient will get what they want.  Our lives change daily, one day we may want a Best Buy card to help get that DVD player, the next it might be one to a spa to give ourselves a mini-vacation day, or on another a restaurant card to take the family out to a memorable dinner.   

Gift Cards for the Christmas Stocking!

Consumer surveys conducted by Goldman Sachs for the International Council of Shopping centers point out that gift cards will be the most popular choice among shoppers this year. 

The ICSC released their list of top holiday gifts for the 2011 season as part of the ICSC’s holiday spending forecast, which includes predictions for Black Friday.  The items that consumers plan to purchase this year is: 

·         Gift cards – 14.2% compared to 11.2% in 2010

·         Clothing – 12.8% compared to 11.9% in 2010

·         Toys or Games – 11.2% compared to 8% in 2010

·         Music, CDs of DVDs – 9.2% compared to 8.6% in 2010

·         Cash – 8.4% compared to 8.1% in 2010

·         Electronics – 7.9% compared to 7.7% in 2010 

Did we ever think that gift cards, used as holiday gifts would be more than 70% higher than cash?

Gift Cards Most Used Incentive Award…More than Merchandise

There is some interesting data that has come out of the 2011 gift card survey of subscribers to Incentive magazine.  We’re sure this data did not please the traditional merchandise award companies who have been fighting the use of gift cards for years.  But, such is life.   

First, the number of responses from large budget incentive users has nearly doubled over 2010 figures.  Traditionally companies with these large programs who have used other forms of awards for their programs now seem to be embracing gift cards as their award of choice.  One reason we believe is the value and choice given by gift cards that was not readily apparent in the traditional merchandise awards.  This trend has been increasing for several years, but 2011 seemed to be a peak.  According to the survey:

“Of special note to gift card suppliers are the survey responses that place more value on gift cards than merchandise – gift cards are overwhelmingly seen as a more influential incentive or reward than other options.  Since 57 % of respondents said their budgets were untouched for 2001, the outlook for gift card suppliers is even brighter this year.” 

A significant survey question was:

How gift cards compared to traditional merchandise awards? 

o   59.6 % said more effective

o   27.6% said equally effective

o   5.7% said less effective

o   7% didn’t use merchandise. 

These types of responses would have been unheard of twenty years ago.  Traditional merchandise awards had been the backbone of the incentive awards industry because they drove all the profit.  There was only a small handful of suppliers selling gift cards and only to a limited market.  Today gift cards are very well accepted as an award that will drive performance.  They no longer have that “impersonal” label that was given to them by all the traditional merchandise suppliers when faced with them as competition. 

The Good News about Gift Cards this Holiday Season

Every time I see a positive article about gift cards I think about all the folks who work for those traditional merchandise incentive award companies who must be grinding their teeth over it.  For years they have taken gift cards to task…they are too impersonal, they are too much like cash, they don’t provide the same kind of motivation that their high cost silver bowls do, yada, yada, yada.  But try as they may, they just can’t keep gift cards down.  It’s what employees want; it’s been that way for years.  About the only reason I can think of that these companies don’t embrace gift cards as a viable award is….PROFIT!   They just don’t make much of it compared to the toasters and TVs they sell. 

 According to CeridianStored Value Solutions Inc., the holiday season promises to be robust and outlines optimistic expectations for gift card sales throughout the upcoming winter holidays. 

They report that retail buying patterns show consumers continuing to purchase gift cards for their flexibility, while the business embrace them as a way to increase sales.   

The article goes on to say that:  

·         “Nearly 60 percent of consumers say gift cards are the #1 item they plan to give this year. 

·         Consumers named gift cards as the most desired gift to receive this year (5 years in a row) 

·         Consumers spend an average of 80-90% more than the face value of the gift cards 

·         Over 50% of US employers use gift cards to recognize employee’s contributions 

·         Use of gift cards as employee incentives is forecast to increase 23% by 2012 

·         15% of U.S. corporations have annual gift card budgets of more than $100K”

The Award of Choice, with its extreme flexibility and choice is ideally suited to take advantage of this market need.  Take a look at our merchant list to see the vast selection that we have, much more than other gift card fulfillment companies. 

7 Things Employees are Thinking, but Won’t Say

You gotta love this post on CBS Money Watch.  It’s a few months old and we don’t know how we missed it, but it says a lot about employee engagement and from our perspective what many employees are really thinking.  Jeff Haden is a great writer, and once again I think he hits the nail on the head with what’s going on in corporate America. 

While we certainly don’t mean to be disrespectful of those conscientious management types who look at their workforce through slightly rosy tinged glasses, maybe if everyone started to look at reality instead of what is really going on in the workplace they would be in a better position to take advantage of all the hype and hoopla surrounding this entire employee engagement thing.  Right now a lot of lip service and consultant mumbo jumbo is given to it.  

We don’t remember an employee attitude survey conducted over the last couple years that didn’t speak to how disgruntled employees are today, more so than yesterday and sure to be more so tomorrow.  No one can foretell the future, employees may be so unhappy that they jump ship at the first opportunity.  Maybe they will, maybe not.  Surely one way to stem the mad rush for the door would be to listen to their needs today and react positively to them.  Of interest to us is the following from the article:

"Would it kill you to say "thanks" once in awhile?" I know. Employees are paid to do a job.     Thanks comes in the form of their paycheck. True but incomplete. Find specific reasons to thank employees for what they do. Look for accomplishments, no matter how small, and express appreciation. "Thanks for staying a few minutes late yesterday." "Thanks for figuring out how to get the order shipped on time." "Thanks for letting me know about that database problem; if you hadn't told me we who knows how long we would have kept having issues." Saying thanks is easy -- and is a great conversation starter.” 

One thing is for sure, if you take heed of what Mr. Haden says, “…always apply the 4 : 1 ratio.  Make sure the employee speaks four times as much as you do.”  

You might also want to download and copy the article and send it to every manager in the company.  It will enlighten some, scare some and anger some.  But a lot of them are that way anyway so what do you have to lose?

And, if you happen to be looking for a great and inexpensive award to use thank and recognize your employees check out Award ofChoice.  It is a very effective tool.