is recognition the duct tape in your talent management toolkit?
By jordan stabley in Appreciation, Insights, and Recognition Strategies
What comes to mind when you hear the words ‘Talent Management’? Engagement? Retention? Employee performance? You are probably all too familiar with these words, almost as if HR has been relentlessly demanding human capital to ‘improve, increase, grow.’ You may also think you’ve exhausted your HR toolkit trying to move the needle. Think again. In a recent study focusing on successful recognition programs over the last quarter of 2015 and the first quarter of 2016, O.C. Tanner and Aon Hewitt found that increasing engagement, improving retention, and driving employee performance are all common outcomes of recognition programs. Not engagement programs, not compensation, but recognition.
We asked respondents specifically what business goals they are attempting to achieve with their recognition programs (see chart to right for the top outcomes). Out of the top ten, nine very clearly fall into the realm of talent management initiatives. The one that does not, ‘build a culture of recognition’ still has its footholds in the HR/talent management realm. The relationship between engagement (the first ranked outcome) and recognition is fascinating. The chart to the left shows the relationship between fair pay and recognition. When pay is fair (see second column), recognition can make a difference of 30 points of engagement. When pay is unfair (see first column), this becomes a 40 point increase, which can make a huge difference for organizations. Many of our profiled organizations pointed to this as their top goal for their programs, indicating they also realize the huge difference recognition can make.
The second ranked outcome, ‘drive employee performance’ was surprising for us. One typically imagines recognition as being more focused on the ‘softer side’ of HR, but this could not be further from the truth. We also asked respondents about the situations in which they used their most effective recognition programs. The top three responses were: individual performance, team performance, and on-the-spot performance. The fifth was project-based performance. ‘Improve retention’ came up as the fourth outcome. Because of the consistent tightening of the labor market, companies will have to take a good, hard look at their retention measures, especially among millennials. Recognition can help, but many organizations may need to re-evaluate their programs, especially among this young population. Recognition is no longer just a good to have, one and done program, but a necessary part of the toolkit of any savvy HR or talent manager. Organizations are missing a vital part of the puzzle by ignoring these programs or letting them stagnate. You can read more about successful recognition programs in our joint research paper, Making Recognition Programs Successful.