Getting Recognition

Globoforce’s Derek Irvine answers our questions about the real value of strategic recognition programs.

“A strategic employee recognition program can provide a cost-effective way to rescue employee morale during tough times”
-Derek Irvine, Globoforce

HRM. Could you give us a little background on the company? What are your key areas of business and what type of clients do you serve?
Derek Irvine. At Globoforce, we say we’re in the ‘thank you’ business.  To our customers, that means we give them the tools necessary to empower their employees to thank and appreciate each other regardless of company position, geographic location, and language. Our strategic recognition programs affect culture change within the largest of organizations, uniting employees under common company goals and values and behind strategic objectives, which will then ultimately establish a true culture of appreciation focused on success within the walls of these organizations. These programs are powerful and proven. We primarily run peer-to-peer employee recognition programs – those accessible to all employees and not just the top performers – and serve large, multinational companies that have thousands of employees located all around the world, such as Amgen, Dow Chemical, Intel, Procter & Gamble and Symantec. 

HRM. In the difficult economic climate we currently face, there could be the temptation to neglect recognition as a cost saving measure. Do you believe that would be a mistake?
DI. Absolutely. In fact, many companies are slashing their budgets for merit increases and bonuses this year, and a strategic employee recognition program can provide a cost-effective way to rescue employee morale during tough times by re-engaging disconnected employees, galvanizing them around core values and raising productivity levels throughout the organization.  Companies can spend as little as one percent of payroll on these programs and indeed several of our existing clients are looking to increase that figure to three percent of payroll because of the high return on investment the program provides in addition to the tremendous psychological boost it can give a workforce crippled by fear and uncertainty during a recession. 

In rewarding employees traditionally, management relied on the classic combination of salary and bonus. In this structure, the bonus was intended to cater to esteem and recognition needs while also clearly being about performance pay. In Maslow’s classic hierarchy of needs, the bonus – typically given as cash – would cater to the higher-order needs for self-esteem and self-actualization. But company leaders are now scratching their heads trying to figure out how to keep employees motivated and productive while merit increases and bonuses disappear.

The human needs illustrated in the upper segments of Maslow’s hierarchy cannot be met through cash compensation or bonuses. If, because of the recession, HR leaders find they have a gap in their Total Rewards Package, now is the ideal time to meet their employees’ higher level needs through a strategic recognition program.

HRM. How can recognition bring real value to a business? Is it possible to measure the true ROI of recognition programs?
DI. Our customers have saved millions in three ways: by consolidating multiple disparate programs, by eliminating cash rewards, and by turning to a gift-card model over a merchandise model. But aside from these tremendous savings, recognition brings value through increasing productivity and employee engagement – an employee’s desire to give additional discretionary effort. After the massive layoffs we’ve seen reported in the news, we know many companies are trying to accomplish the same amount of work with fewer employees – all while trying to hold onto market share or even gain a competitive edge. But employers are fighting an uphill battle against the fear and torpor induced from the layoffs and the general news climate today.

Recognition is a powerful, positive tool to inspire workers and unite them behind common goals, ultimately driving increased productivity in precisely those areas employers need to succeed in today’s challenging economy. And yes, this can be measured, but only if objectives are clearly defined with associated metrics for success at program initiation. Then, by its definition, strategic recognition requires constant measurement and reporting against those metrics to show the return on investment, both in real dollars and in improved morale and productivity.

Derek Irvine is Chief Marketing Officer and Vice President of Global Strategy at Globoforce, a leading worldwide provider of global strategic recognition solutions. Globoforce was founded in 1999 in Dublin, Ireland, and is now dual-headquartered in Dublin and Southborough, Mass., USA, with employees on the ground in many parts of the world. Irvine can be contacted at dereki@globoforce.com.