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TheWhitePaper*

ISSUE 5 FEBRUARY 2008




Designing Your Company’s
Social Architecture:
Five Steps to Build a Culture of A...
TheWhitePaper*




In today’s work environment where people spend more time with their work
colleagues than with friends a...
TheWhitePaper*




                 1      DETERMINE WHAT YOUR
                        CULTURE IS TODAY
                 A...
TheWhitePaper*




A Global or Imperialist Culture?                     A Culture of Intimidation
Is your culture truly gl...
TheWhitePaper*




                 2        CULTIVATE A GLOBAL CULTURE
                          OF APPRECIATION
        ...
TheWhitePaper*




3        EVOLVE YOUR SOCIAL ARCHITECTURE


Bring Your Company Values to Life                   “Effecti...
TheWhitePaper*




                                                   Penetrate the Entire
                               ...
TheWhitePaper*




4        COMMUNICATE CONSISTENTLY
         AND CONSTANTLY
Once your strategic recognition program has  ...
TheWhitePaper*




                 5        ELIMINATE BORDERS THROUGH A
                          CULTURE OF APPRECIATION...
TheWhitePaper*




Employee Borders
As recognition evolves a company’s social      tance, employee engagement, and bottom
...
TheWhitePaper*




About Globoforce
Globoforce is the leading worldwide provider of on-demand strategic reward and recogni...
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  1. 1. TheWhitePaper* ISSUE 5 FEBRUARY 2008 Designing Your Company’s Social Architecture: Five Steps to Build a Culture of Appreciation across Borders
  2. 2. TheWhitePaper* In today’s work environment where people spend more time with their work colleagues than with friends and family, the organization they work for is a significant part of their social fabric. In any situation where people are grouped together to achieve a purpose, individuals want to know they belong. Further, they want to know they belong to a “winning team” – a group that has either proven their success in the past or has clearly defined strategies to do so in the future. On an individual level, employees need an understanding of the value they personally bring to the organization and they need to know they are making a valuable contribution to the team, the company, and its customers. In their groundbreaking people manage- social architecture, which is the method by ment book First, Break All the Rules, Marcus which companies enable collaboration, build Buckingham and Curt Coffman of the Gallup relationships and coordinate communica- Organization discussed human nature as the tion between people, across teams and even last reserve of value to remain untapped by around the world. the vast majority of companies today. How- So, how do you design your company’s social ever, the power of human nature is unlike architecture to foster a culture in which your any other force of nature because “…each employees will accomplish what you need human’s nature is different. If companies while avoiding the pitfalls that are so com- want to use this power, they must first find a mon in a global workforce of multiple cultures mechanism to unleash each human’s nature, and social standards that now also spans six not constrain it.” generations? In working with the world’s larg- The mechanism to unleashing each per- est and most complex companies, we have son’s best lies within your company’s cul- discovered there are five critical steps to build ture – the outward manifestation of your a culture leading to success every time. How to Build a Culture of Appreciation 1. Determine what your culture is today 2. Cultivate a global culture of appreciation 3. Evolve your social architecture 4. Communicate consistently and constantly 5. Eliminate borders through a culture of appreciation
  3. 3. TheWhitePaper* 1 DETERMINE WHAT YOUR CULTURE IS TODAY As in any social group, a company’s culture What is your company’s culture today? After is defined by the people in it. The culture spending so much time and effort developing a is the shared ways employees think and strategy, mission and values, company leaders act, often learned over time and heavily hope those values become the basis for the influenced by their peers and managers. company culture, but that is not always the Yet organizational culture is a significant case. Unless the values are visibly and quanti- driver of employee engagement, which in fiably reinforced on a daily basis, they become turn determines how productive a person nothing more than an engraved plaque hanging or working group is – all of which impact on the wall. Instead, the culture derives from bottom-line results. perceptions and attitudes – the human nature – of highly differentiated individuals. The Results of a Solid Foundation Increased Bottom Line Productivity Employee Engagement Culture of Appreciation Social Architecture
  4. 4. TheWhitePaper* A Global or Imperialist Culture? A Culture of Intimidation Is your culture truly global or imperialistic or Appreciation? and imposed from the country where your Is your culture based on intimidation or on headquarters are located? We have repeat- recognition? The unintentional consequence edly heard from our clients about the pain of many productivity or quality improve- of past “global” initiatives in the company, ment initiatives is the creation of a culture whether they were HR programs intended to of intimidation to achieve goals – or else. inspire or software systems intended to sim- In such an environment, employees tend plify and streamline production. In nearly ev- to disengage from the company and their ery case companies have first deployed in the work, negatively affecting productivity and headquarter’s country with eventual roll-out performance in a potentially devastating way. to outlying divisions with little consideration Gallup conducted a study in 2004 finding if given to local languages, cultural norms, or a manager ignores an employee, the chances work processes. of employee disengagement are 40%. If the In a truly global culture all divisions in all manager focuses on employee weaknesses, areas of the world believe themselves to be the chances of disengagement are 22%. And equally valuable to delivering on the com- if the manager focuses on an employee’s pany’s stated mission. In this culture, all strengths, the chances of the employee being employees perceive their contributions to be disengaged drops to just 1%. In a subse- critical to meeting and exceeding customer quent study in 2007, Gallup found it to be needs, thereby growing the customer base not uncommon for between one-fifth and and increasing the bottom line. one-third of employees to say, “Not only have I not received any praise recently, my best efforts are routinely ignored.” “If done well, effective recognition can develop Focusing on their weaknesses or ignor- an international cadre of engaged employees ing employees altogether will only serve who help drive the company’s long-term goals.” to foster a culture of intimidation. Giving Workforce Management, Sept. 2007 them work that draws on their strengths and then encouraging them builds a far more productive environment. In the same 2007 study, Gallup found the average benefit of a 10% increase in recognition to be 6.5% greater productivity and 2% higher customer engagement where each percentage point equates to hundreds of millions of dollars in sales for a Fortune 500 company.
  5. 5. TheWhitePaper* 2 CULTIVATE A GLOBAL CULTURE OF APPRECIATION Many studies have been conducted to try to categorize what type of culture a company has and which is the most effective at accomplishing that company’s priorities. Pundits seem to think that some combination of competition, coop- eration and even aggression helps companies deliver the goods. Our global clients have proven differently, “Companies are realizing that culture is as im- repeatedly realizing that a culture of appre- portant as strategy and that they can’t just look ciation that reinforces the company’s stated at the short term anymore.” values is the best strategy to achieve the – Barbara Bilodeau company’s mission. A culture of apprecia- Director of Market Research and Analysis, Bain & Co. tion allows for individualism in approach to accomplishing tasks, but unites employees across geographical and divisional boundaries need for community in their workplace and through a common attitude of recognition for positive relationships with high-performing tasks well done and goals achieved. It creates peers and managers, a need to be recognized opportunities and a desire to say “thank you” as individuals and to gain prestige for their throughout the day, month and year. contributions. In a study of more than 1,000 The leaders of globally influential compa- international executives conducted in 2007, nies are now feeling an urgency to develop Bain & Co. found nine out of 10 executives a company culture appealing to employees’ believe corporate culture is important today need for a sense of belonging and value, a as a strategy for success. This executive buy-in is critical for the success of a strategic recognition program that fosters Dow’s Culture of Appreciation a culture of appreciation. To perpetuate an ef- *Recognition is a strategic project. fective culture of appreciation, employees need to receive relevant and valuable rewards that *200,000 “Thank You” moments meet their need for psychic income – social ac- *90% of all global employees recognized ceptance, increased self-esteem and self real- someone in first year. ization. And such a recognition program should *87% of employees agree the culture of ap- be driven by a core, in house program manage- preciation has improved. ment team that encourages employees to make *Employee satisfaction scores rose from ap- recognition part of their daily work. Senior-level proximately 65% to approximately 85% validation of the recognition program and the program management team is essential, prefer- ably through an executive champion respon- sible for driving global program awareness.
  6. 6. TheWhitePaper* 3 EVOLVE YOUR SOCIAL ARCHITECTURE Bring Your Company Values to Life “Effective recognition initiatives are operated as part of a larger system designed to reinforce the Once a culture of appreciation has been estab- key values of the organization.” lished through the use of a strategic recognition – The Corporate Leadership Council: program, it becomes possible to bring your What Do World-Class Companies Do? company values to life. An absolutely critical step in taking the values off the wall plaque and instilling them in the every day actions of the employees is to ensure all actions or The Economics of Strategic behaviors nominated for recognition are tied to Recognition a corporate value. In many companies, recogni- Once rewarded actions and behaviors are tied tion happens on a one-on-one basis between to values, it becomes possible to report on the a manager and an employee with no clear traction specific values have in the organiza- rationale behind the reward. For example, if a tion. Much like lagging indicators show where manager chose to reward a staff member for trouble lies ahead for economists, values not organizing a team morale boosting activity, then frequently rewarded become an indicator of other team members may assume that making where management may need to intervene. work more fun is a value to be rewarded when in fact that has nothing to do with the firm’s Our global clients use dashboards and value- stated values. adoption charts not only to track rewards system usage, but to target values adoption When all nominated activities or behaviors are company-wide or even at the division or unit tied to a company value, then at least two peo- level. By targeting lagging values, managers ple – the nominator and the recipient – must can work with specific employee groups or think about the values during the process. If divisions to bring everyone to the same level such nominations require approval, then even of understanding and acceptance of all of more people are reminded of the values. And the values. if all recognitions within a set time period are then announced in a monthly team meeting, then entire teams or divisions will be reminded “I believe that we need to become a much of the values and how to demonstrate and more competitive company, a more efficient achieve them in every day tasks. In large, glob- company, a more service-oriented company, ally distributed companies this is virtually the and a more aggressive company. However, it is only way to make the company values come much more than just changing our products or alive for every employee at all levels. changing the architecture: it means changing the Reuters culture as well.” – Tom Glocer CEO, Reuters
  7. 7. TheWhitePaper* Penetrate the Entire Organization to Gain Knowledge This level of insight into company culture is For the same reason, the frequency of awards not possible, however, in recognition pro- must also be significantly higher than is grams where only the top 10% of employees typical to achieve the level of knowledge on are involved. At least 80% of employees in values penetration necessary to evolve a so- all locations must participate in the strategic cial architecture. Globoforce’s model encour- recognition program for enough knowledge ages a high frequency of low-value awards to be gathered on which values are not being to foster a culture of appreciation. Once a selected as a reason for recognition. It is high frequency of awards to at least 80% of only when values adoption at every level of the employee base is reached, the strategic an organization is fully understood that the recognition program will market itself. As the company culture can be manipulated by ad- Corporate Leadership Council recently noted, dressing those lagging values and influencing “If someone doesn’t feel appreciated, they employees to improve in those areas. can’t appreciate others.” Daily Weekly Elitist Recognition Program Strategic Recognition Program No values adoption Social architecture evolved or manipulation companywide Culture of appreciation established Frequency of Reward Monthly Bi-Annual Tactical Recognition Program Infrequent Recognition Program Little to no impact Low Psychic Income on company culture value to participants Annual 0 10 20 30 40 50 60 70 80 90 100 Percentage of Employees Recognized
  8. 8. TheWhitePaper* 4 COMMUNICATE CONSISTENTLY AND CONSTANTLY Once your strategic recognition program has week, then the program needs no further inter- at least 80% of employees nominating for and nal marketing or communications “push.” And receiving rewards, then the communication companies do not need to invest additionally to begins to self-perpetuate. We have seen con- achieve these returns. Lower value awards will sistently across clients who have the highest generate the same sense of goodwill in a much employee satisfaction scores that when 5-8% broader audience for the same budget as far of employees are nominated for rewards every fewer high-value awards targeted to the elite. “Getting employees to be part of the communication process is more than a one-way cascade of informa- tion flowing from management. It’s about creating a culture where employees help lead the process.” – Melcrum Report, October 2007 Communicating a Company’s Importance of Consistent Culture Employee Communication Northwestern University’s Forum for People Several research studies during the last Performance Management & Measure- decade have shown the lack of effective ment found in a recent study that achieving communication deep into an organization a motivated workforce is only possible if is a major reason why people leave. This employees are satisfied, which can only be is largely because people need a sense of accomplished through the development of an belonging and an understanding of how their effective communication environment, both jobs fit into the company’s mission. In es- up and down the organization. sence, they need a social architecture. To effectively communicate, a common lan- A lack of consistency in communication can guage is needed. In the case of your company’s lead to confusion about goals, priorities and culture, the common language should be even company performance. A manager cannot based on a brand consistent with your compa- only inform an employee of their tasks, but also ny’s market brand, but unique to the strategic must tie those tasks to the company’s strategy recognition program. Then, as discussed above, and success. Then the manager must take it a it should incorporate your company’s values step further to show the employee how he will and strategy into every level of communication, too benefit from the success. from recommendation, to award types, to ap- Only when employees can make this leap proval process, to receipt and redemption – all from the personal benefit to the corporate translated into the local languages of employ- benefit will they become fully engaged, ees around the world. With this type of unifying allowing the organization to achieve a full re- recognition language, the culture of apprecia- turn on the compensation, training and other tion will cascade throughout the organization. investments made in that employee.
  9. 9. TheWhitePaper* 5 ELIMINATE BORDERS THROUGH A CULTURE OF APPRECIATION When borders exist in an organization, whether they be geographic, divisional or because of position, progress slows. Nothing should impede the sharing of ideas or the flow of talent. Most importantly, however, nothing should stand in the way of well-deserved recognition. Geographic Borders Division Borders A culture of appreciation can break down Within global organizations, it is not uncom- the boundaries of country, continent, and mon for divisions to share best practices, language. In today’s multi-national corpora- research, or even team members. An orga- tions where a functional team or a division nization-wide recognition program branded includes team members spread across mul- with the company’s values and delivering a tiple countries, it is critical to give employ- single consistent message on the company’s ees the ability to interact with the system in strategy and vision acts as the bridge be- their own language to ensure the spread of tween divisions. All employees everywhere, a culture of appreciation doesn’t stop at the regardless of divisional reporting structure, border. With more than a dozen language share a common language of recognition, options in a Globoforce strategic recognition and a common culture of appreciation. program it is possible, for example, for an In today’s hyper-active mergers and acquisi- employee in Beijing to view the portal in Chi- tions environment, companies also need nese, but nominate a team member in Tokyo a way to excite newly acquired employees such that the recipient receives the reward about the company’s values and strategy, to in Japanese, while the manager located in involve them in their new company’s culture, Paris receives and approves the nomination and to integrate them fully into the social in French, the reward is issued in Japanese architecture. A strategic recognition program yen, and the client is invoiced in pesos at that employees want to participate in, that company headquarters in Mexico City. recognizes employees – new and old – fre- quently and consistently, and that embeds the brand and the values into every day “No successful organization can have even one activities is a powerful tool to increase the spectator. Instead, there needs to be a culture momentum of the integration process. shift so that every leader and employee recog- nizes that they have a responsibility to the pro- cess. Engagement and collaboration must hap- pen between departments and between levels (i.e., horizontally as well as vertically).” – Melcrum Report, October 2007
  10. 10. TheWhitePaper* Employee Borders As recognition evolves a company’s social tance, employee engagement, and bottom architecture, a global culture of apprecia- line results. When employees are given the tion becomes woven in the very fabric of power to thank their colleagues regularly and a company. Manager-to-peer, peer-to-peer, frequently – in the local language and cur- team-to-team – all are powerful recognition rency – it unleashes a company’s latent power options, but too often companies limit their in its people to unite the workforce, energize programs to the classic manager-to-peer a recognition program and drive productivity model. While recognition from the manager across the organization. is always valuable, a 2007 Gallup survey Gallup found in their 2007 study that recog- found positive words from any source acti- nition activates regions of the brain related vate regions of the brain related to reward, to reward. One employee Gallup interviewed “Creating an internal reward system that explained: “For me, receiving praise and makes employees want to repeat behavior recognition kind of sets off a little explo- that the company needs, if doing the right sion inside. It’s kind of like, ‘Oh, that was thing earns them recognition.” good, but you know what? I can do better.’ It Peer-to-peer recognition is one of the most helps give you that drive to want to continue powerful methods for driving strategic rec- achieving, doing yourself one better.” ognition program penetration and accep- Are you in need of a social architecture that inspires your employees to be more productive? Are you prepared for the growth a culture of appreciation can bring to your employees? Our consultants are ready to help you build a strategic recognition program that fosters a cul- ture of appreciation based on your company’s mission and values. Visit us on the web at www.globoforce.com or email us at corporate@globoforce.com. To speak to one of our global consultants immediately, please call: +1 888-7-GFORCE.
  11. 11. TheWhitePaper* About Globoforce Globoforce is the leading worldwide provider of on-demand strategic reward and recognition solutions for Global 2000 companies. Globoforce’s flexible and efficient recognition tool can scale from one user to millions of users with ease, offering global companies a powerful and secure solution to implement and manage their companywide or divisional employee recognition programs. Through a dynamic, easy-to-use, on-demand technology platform, Globoforce trans- forms the way companies engage, motivate and empower their workforces across the world. Co- headquartered in Southborough, Mass., and Dublin, Ireland, Globoforce was recently selected by the Great Place to Work® Institute as one of the “50 Best Companies to Work For.” Globoforce won a 2007 Process Innovation Award for the creative deployment of Dow Chemical’s global, on-demand employee recognition program. Globoforce also won Human Resource Executive magazine’s coveted “Top HR Product of the Year” award in 2004 for its revolutionary on-demand software solution. Some of Globoforce’s world-class customers utilizing this enterprise-class solu- tion include Amgen, Avnet, Dow Chemical, Intuit, Procter & Gamble and Reuters. Globoforce (North America) Reservoir Corporate Center 144 Turnpike Road, Suite 310, Southborough, MA 01772 USA Phone: +1 (888) 7-GFORCE (436723) Fax: +1 (508) 357 8964 Email: corporate@globoforce.com Globoforce Limited 6 Beckett Way, Park West Business Park, Dublin 12, Ireland. Phone: +353 1 625 8800 Fax: +353 1 625 8880 Email: corporate@globoforce.com Private Limited Company Irish Company Registered Number 264562 © 2008, Globoforce Limited. All rights reserved.

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