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HOW

PERFORMANCE
RECOGNITION
Impacts Innovation & Employee Engagement
THINK ABOUT THE LAST TIME
S O M E O N E YO U WO R K W I T H TO L D YO U ,

“GREAT JOB!”
HOW D I D I T M A K E YO U F E E L?
FOR MOST O F US,

SINCERE RECOGN ITION CA N B E A

POWERFUL
MOTIVATOR

TO REDOUBLE OUR EFFORTS
AND STRIVE FOR EVEN GREATER
PERFORMANCE IN THE FUTURE

W HET H E R I N

SPORTS, AMONG OUR FAMILIES, OR AT WORK.
AND AS A RE S ULT,

I N FAC T,

E MP LOYE E S

STUDIES SHOW

w ho re ce i ve re co g n ition
are m o re l i ke l y to be
hi g hl y e ng ag e d.

ARE MORE LIKELY TO
PERFORM AT THEIR BEST

&

MO RE LIKE LY TO DE VE LO P

INNOVATIVE
WAYS TO I MPR OVE THEI R COMPA N Y.
WE WIL L LOO K AT T WO DI F F E R E N T
TY PES OF P ERFORM A NC E R E CO GN I T I O N:

1
ONGOING EFFORT:
Th is i s t yp i c a l l y in fo r m a l, ca s u a l,
and more f re q u e nt re co g n it io n ,
typ ica l l y d e l i ve re d in t h e fo r m o f
a w ri t te n n ote, a n e m a il, o r a
since re t h a n k you .

2
A BOV E A N D BE YO N D
PE R FO R M A N C E :
Thi s ty pe o f re co gni ti o n i s
ty pi cal l y mo re fo rmal and ti e d to
a mo re si gni f i cant achi eve me nt.
It i s f re que ntl y acco mpani e d by
anno unce me nt to the te am o r
co mpany and/o r an award i te m.
L ET ’ S EX P LO R E
how performance re co g ni ti o n i mp a cts
yo u r employee’s engageme nt, i nnovati o n, and o utp ut.
ENGAGEMENT
I N THE L AST FEW YEARS ,

A REC URRI NG FOCUS OF DISCUSSIONS
O F BUS INE SS PERFORMANCE HAS BEEN

INCREASING EMPLOY E E
E M PLOY E E E N GAGE M E N T %
6 0 -70
Wh i l e d ef in it ion s o f e ng ag e m e nt
abou nd , t h e c r u x o f t he i d e a i s s i m p l e
- w h en em p loyees are m o re f ul f i l l e d
i n th e ir wor k a n d co m m i t te d to t he i r
col l eag u es a n d comp any, t hey ( and
th e com p a ny) w ill p e rfo rm b e t te r.

49 - 6 0

>25

9.1

-

24.2

AVG. SHA R E HOLD E R ’S R E T U R N %

200 4 Hewi t t A ss ociates, E mp loyee Enga gem e nt at Double -Digit Growth Co mp an ies
AS A RE S U LT
co mp a nies are investing heavily
in a va rie ty of ways to inc re a se
em ployee e nga gem e nt.
ONE OF THE MOST EFFECTIVE
W AY S T O I N C R E A S E E N G A G E M E N T

is simply to recognize
employees for their
performance,
I N BOT H FO R MAL A N D
I N FO RM A L WAYS .
RECOG N I T I O N AC R OSS FO U R
COMPONEN TS OF E NGAGE ME N T:

D RI V E & DE T E R MI N AT I O N

89%

PERCENT OF EMPLOYEES
WHO ARE HIGHLY ENGAGED

44%
W H EN COMPANI ES
FOCUS ON RECOGN I T I ON

W HEN CO M PA N I ES
D O N ’ T CA R E
RECOG N I T I O N AC R OSS FO U R
COMPONEN TS OF E NGAGE ME N T:

COM PA N Y CO N N E C T I O N

81%

PERCENT OF EMPLOYEES
WHO ARE HIGHLY ENGAGED

35%
W H EN COMPANI ES
FOCUS ON RECOGN I T I ON

W HEN CO M PA N I ES
D O N ’ T CA R E
RECOG N I T I O N AC R OSS FO U R
COMPONEN TS OF E NGAGE ME N T:

WOR K R E L AT I O N S H I P S

78%

PERCENT OF EMPLOYEES
WHO ARE HIGHLY ENGAGED

35%
W H EN COMPANI ES
FOCUS ON RECOGN I T I ON

W HEN CO M PA N I ES
D O N ’ T CA R E
RECOG N I T I O N AC R OSS FO U R
COMPONEN TS OF E NGAGE ME N T:

P E R S O NAL STA N DI NG

76%

PERCENT OF EMPLOYEES
WHO ARE HIGHLY ENGAGED

28%
W H EN COMPANI ES
FOCUS ON RECOGN I T I ON

W HEN CO M PA N I ES
D O N ’ T CA R E
D RIV E &
DE TER M I N AT I O N

CO MPANY
CO N N E C T I O N

WO RK
RE LAT IO NS H IPS

PE RS O NAL
STANDING

W HE N LOO KI N G AC R OSS THESE FOUR DIMENSIONS,
t h e re i s a stark d if feren ce i n the e nga gem e nt levels of
t h o s e wh o receive recog n ition with those who do not.
M O R E THA N TWICE AS MANY
E M P LOYE E S A RE HIGHLY ENGAGED
amon g th ose who re ce ive pe rform a nce
recog n ition com pa red to those who do not.
R ECOG N I T I O N A N D E NGAGE ME N T

78%

PERCENT OF EMPLOYEES
WHO ARE HIGHLY ENGAGED

34%
CO M PANI ES WI TH
ST R O NG RE COGN I T I ON

CO M PA N I ES W I T H
W EA K R ECO GN IT IO N
A g ood example of this is se en in
th e relation s hip be tween m a na gers
an d th ose they direc tly oversee.
A MON G THOSE W HO R EC EIV E
ST RO NG P ERFORMAN C E R ECOG N I T I ON

Great job!

A M O N G TH OS E W H O R E C E I V E
W E A K P E R F O R M A N C E R E CO G N I TI O N

...

87%

51%

say they h ave a st ro n g re lat io n s h ip
wi t h t h e i r d i re ct m a n a g e r s

say they have a stro ng re l ati o nshi p
wi th the i r di re ct manage rs
Great job!

FREQUENT
RECOGNITION

IN ADDITION,

82% o f ma na ge rs who re cog n i ze t h ei r em p l oyees ’
pe r fo r m a nce m ore t h an o n ce a mo n t h
REPORT HAVING GOOD RELATIONSHIPS WITH THEM.
Great job!

INFREQUENT
RECOGNITION

IN CONTRAST,

only 63% o f m a na g er s w h o recog n i ze
pe r fo r m a nce le ss f req u en t l y
REPORT HAVING GOOD RELATIONSHIPS WITH THEM.

U NFORT UN ATE LY,

39%

O F MANAG E RS RE PO RT T H AT T H E Y
INFRE Q U E NT LY RE CO G NIZE T H E IR
T E AM ME MB E RS ’ PE RFO RMANCE .
While it’s certainly possible that
RECOGNITION IS A RESULT OF

GOOD RELATIONSHIPS
(and good managers),
THE OPPOSITE IS CLEARLY ALSO TRUE
INCREASED PERFORMANCE
RECOGNITION APPEARS TO BE

ONE OF THE MOST
EFFECTIVE WAYS
to improve relationships between
managers and employees.
>
I N FAC T,
employees believe eit he r ty p e o f re co g ni ti o n
is much more import ant tha n a c ash b o nus.
E MPLOYEE/ MANAGER R EL AT I ON SHI P S A R E
IM PROVE D BY P ERFOR M A N C E R ECOG N I T I ON

EMPLOYEES CHOICE OF WHICH BENEFIT WOULD
MOST IMPROVE THEIR RELATIONSHIP WITH THEIR DIRECT MANAGER.

50%
22%
5% SAL ARY
B O NUS

28%
A B OV E & B E YO N D
R E COG N I T I O N

O N GO IN G EF F O R T
R ECO G N I T I O N
P E RFORM A N C E R E CO GNI T I O N
F UEL S E M P LOY E E I NNOVAT I O N
SO, IF EMPLOYEE ENGAGEMENT

?

increases with strong performance recognition,

HOW DOES THAT AFFECT
EMPLOYEE AND COMPANY
PERFORMANCE
THE FIRST MAJOR EFFECT
THAT RECOGNITION HAS ON PERFORMANCE

DR IVIN G INNOVATI ON
A top p riority for successful
execu tives everywhere.
When asked how many new ideas
EMPLOYEES GENERATED IN THE LAST
MONTH TO IMPROVE THEIR COMPANY’S

PRODUCTS, SERVICES, OR SYSTEMS
THE RESPONSES WERE COMPELLING.
T HE RESP O NS E S?
Em pl oyees receiving st ro ng re co g ni ti o n g e ne rate
n e ar ly twice as m any innovat i ve i de a s e a c h m o nt h.

EMPLOYEES RECEIVING
WEAK RECOGNITION

EMPLOYEES RECEIVING
STRONG RECOGNITION

1.8 NEW IDEAS

per month

to help improve their company

3 NEW IDEAS

per month

to help improve their company
I N A D DI T I O N ,
Employees will proactively seek new ways to improve efficiency at their
company when they receive strong performance recognition.

EMPLOYEES RECEIVING
WEAK RECOGNITION

EMPLOYEES RECEIVING
STRONG RECOGNITION

54%
seek new ways to improve efficiency

87%
seek new ways to improve efficiency
While there are many factors that go into an
individual’s or a company’s ability to innovate,

We fou n d th at recognition c a n be a
p owerf u l d river of continua l im prove m e nt.
EMP LOY EE IN N OVAT I ON I S
IM PR OVE D BY P ERFORM A N C E R ECOG N I T I ON

EMPLOYEES CHOICE OF WHICH BENEFIT WOULD
MOST IMPROVE THEIR INNOVATION FOR THE COMPANY.

32%
5% SAL ARY
B O NUS

41%
27%
A B OV E & B E YO N D
R E COG N I T I O N

O N GO IN G EF F O R T
R ECO G N I T I O N
P E RFORM A N C E R E CO GNI T I O N
F UEL S E M P LOY E E O U T P U T
THE SECOND MAJOR EFFECT
THAT RECOGNITION HAS ON PERFORMANCE

WO R K IN G AT MAXI MUM CAPACI TY
In creasin g emp loyees’ willingne ss to
work at their be st.
EMP LOYE E & T E A M O U T P U T

P E R C E N T O F E MP LOYEES WORKING
AT 9 0 % C A PAC I TY OR ABOVE

53%
CO M PANI ES WI TH
ST R O NG RE COGN I T I ON

40%
CO M PA N I ES W I T H
W EA K R ECO GN IT IO N
E XPECTAT IONS
Employees have a wide variety of expectations
ABOUT THE FREQUENCY AND NATURE

OF RECOGNITION
IDEAL PERFORMANCE RECOGNITION FREQUENCY

MULTIPLE TIMES A WEEK
ONCE A WEEK

9%
11%
19%

MULTIPLE TIMES A MONTH

26%

ONCE A MONTH

20%

ONCE A QUARTER
ONCE EVERY 6 MONTHS
ONCE A YEAR

7%
9%
HOW IS A MANAGER
supposed to know how often
HE/SHE SHOULD
RECOGNIZE HIS/HER
EMPLOYEES
+
T HE A N SW E R
t hought fully combi ni ng f re q ue nt a nd
informal recognit ion fo r “o ng o i ng e f fo r t ”
wit h less frequent b ut mo re me ani ng f ul
reco g nit ion of “above and b eyo nd p e r fo r mance.”
O N G O IN G E F FORT,
esp ecially w h en prov ided frequently and
si nce re l y , can be used to recognize little wins
an d en cou rag e em ployees to ke ep going.
O N THE OTHER HAND,
recog n iz in g employees less frequently but
w i t h mo re fo r mality for a bove a nd beyond
p erforman ce s ets a pa rt the m ost signific a nt
ach ievemen ts i n a unique a nd soc ia l way.
+
RE SE A RC H S H OWS
th at bot h t ypes of recogni ti o n a re i mp o r tant a nd
s h o u ld be used in deliberate a nd co mp l e me ntar y ways.
Source: Cicero 2013, The Effect of Performance Recognition on Employee Engagement

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How performance recognition impacts innovation and employee engagement

  • 2. THINK ABOUT THE LAST TIME S O M E O N E YO U WO R K W I T H TO L D YO U , “GREAT JOB!” HOW D I D I T M A K E YO U F E E L?
  • 3. FOR MOST O F US, SINCERE RECOGN ITION CA N B E A POWERFUL MOTIVATOR TO REDOUBLE OUR EFFORTS AND STRIVE FOR EVEN GREATER PERFORMANCE IN THE FUTURE W HET H E R I N SPORTS, AMONG OUR FAMILIES, OR AT WORK.
  • 4. AND AS A RE S ULT, I N FAC T, E MP LOYE E S STUDIES SHOW w ho re ce i ve re co g n ition are m o re l i ke l y to be hi g hl y e ng ag e d. ARE MORE LIKELY TO PERFORM AT THEIR BEST & MO RE LIKE LY TO DE VE LO P INNOVATIVE WAYS TO I MPR OVE THEI R COMPA N Y.
  • 5. WE WIL L LOO K AT T WO DI F F E R E N T TY PES OF P ERFORM A NC E R E CO GN I T I O N: 1 ONGOING EFFORT: Th is i s t yp i c a l l y in fo r m a l, ca s u a l, and more f re q u e nt re co g n it io n , typ ica l l y d e l i ve re d in t h e fo r m o f a w ri t te n n ote, a n e m a il, o r a since re t h a n k you . 2 A BOV E A N D BE YO N D PE R FO R M A N C E : Thi s ty pe o f re co gni ti o n i s ty pi cal l y mo re fo rmal and ti e d to a mo re si gni f i cant achi eve me nt. It i s f re que ntl y acco mpani e d by anno unce me nt to the te am o r co mpany and/o r an award i te m.
  • 6. L ET ’ S EX P LO R E how performance re co g ni ti o n i mp a cts yo u r employee’s engageme nt, i nnovati o n, and o utp ut.
  • 8. I N THE L AST FEW YEARS , A REC URRI NG FOCUS OF DISCUSSIONS O F BUS INE SS PERFORMANCE HAS BEEN INCREASING EMPLOY E E
  • 9. E M PLOY E E E N GAGE M E N T % 6 0 -70 Wh i l e d ef in it ion s o f e ng ag e m e nt abou nd , t h e c r u x o f t he i d e a i s s i m p l e - w h en em p loyees are m o re f ul f i l l e d i n th e ir wor k a n d co m m i t te d to t he i r col l eag u es a n d comp any, t hey ( and th e com p a ny) w ill p e rfo rm b e t te r. 49 - 6 0 >25 9.1 - 24.2 AVG. SHA R E HOLD E R ’S R E T U R N % 200 4 Hewi t t A ss ociates, E mp loyee Enga gem e nt at Double -Digit Growth Co mp an ies
  • 10. AS A RE S U LT co mp a nies are investing heavily in a va rie ty of ways to inc re a se em ployee e nga gem e nt.
  • 11. ONE OF THE MOST EFFECTIVE W AY S T O I N C R E A S E E N G A G E M E N T is simply to recognize employees for their performance, I N BOT H FO R MAL A N D I N FO RM A L WAYS .
  • 12. RECOG N I T I O N AC R OSS FO U R COMPONEN TS OF E NGAGE ME N T: D RI V E & DE T E R MI N AT I O N 89% PERCENT OF EMPLOYEES WHO ARE HIGHLY ENGAGED 44% W H EN COMPANI ES FOCUS ON RECOGN I T I ON W HEN CO M PA N I ES D O N ’ T CA R E
  • 13. RECOG N I T I O N AC R OSS FO U R COMPONEN TS OF E NGAGE ME N T: COM PA N Y CO N N E C T I O N 81% PERCENT OF EMPLOYEES WHO ARE HIGHLY ENGAGED 35% W H EN COMPANI ES FOCUS ON RECOGN I T I ON W HEN CO M PA N I ES D O N ’ T CA R E
  • 14. RECOG N I T I O N AC R OSS FO U R COMPONEN TS OF E NGAGE ME N T: WOR K R E L AT I O N S H I P S 78% PERCENT OF EMPLOYEES WHO ARE HIGHLY ENGAGED 35% W H EN COMPANI ES FOCUS ON RECOGN I T I ON W HEN CO M PA N I ES D O N ’ T CA R E
  • 15. RECOG N I T I O N AC R OSS FO U R COMPONEN TS OF E NGAGE ME N T: P E R S O NAL STA N DI NG 76% PERCENT OF EMPLOYEES WHO ARE HIGHLY ENGAGED 28% W H EN COMPANI ES FOCUS ON RECOGN I T I ON W HEN CO M PA N I ES D O N ’ T CA R E
  • 16. D RIV E & DE TER M I N AT I O N CO MPANY CO N N E C T I O N WO RK RE LAT IO NS H IPS PE RS O NAL STANDING W HE N LOO KI N G AC R OSS THESE FOUR DIMENSIONS, t h e re i s a stark d if feren ce i n the e nga gem e nt levels of t h o s e wh o receive recog n ition with those who do not.
  • 17. M O R E THA N TWICE AS MANY E M P LOYE E S A RE HIGHLY ENGAGED amon g th ose who re ce ive pe rform a nce recog n ition com pa red to those who do not.
  • 18. R ECOG N I T I O N A N D E NGAGE ME N T 78% PERCENT OF EMPLOYEES WHO ARE HIGHLY ENGAGED 34% CO M PANI ES WI TH ST R O NG RE COGN I T I ON CO M PA N I ES W I T H W EA K R ECO GN IT IO N
  • 19. A g ood example of this is se en in th e relation s hip be tween m a na gers an d th ose they direc tly oversee.
  • 20. A MON G THOSE W HO R EC EIV E ST RO NG P ERFORMAN C E R ECOG N I T I ON Great job! A M O N G TH OS E W H O R E C E I V E W E A K P E R F O R M A N C E R E CO G N I TI O N ... 87% 51% say they h ave a st ro n g re lat io n s h ip wi t h t h e i r d i re ct m a n a g e r s say they have a stro ng re l ati o nshi p wi th the i r di re ct manage rs
  • 21. Great job! FREQUENT RECOGNITION IN ADDITION, 82% o f ma na ge rs who re cog n i ze t h ei r em p l oyees ’ pe r fo r m a nce m ore t h an o n ce a mo n t h REPORT HAVING GOOD RELATIONSHIPS WITH THEM.
  • 22. Great job! INFREQUENT RECOGNITION IN CONTRAST, only 63% o f m a na g er s w h o recog n i ze pe r fo r m a nce le ss f req u en t l y REPORT HAVING GOOD RELATIONSHIPS WITH THEM. U NFORT UN ATE LY, 39% O F MANAG E RS RE PO RT T H AT T H E Y INFRE Q U E NT LY RE CO G NIZE T H E IR T E AM ME MB E RS ’ PE RFO RMANCE .
  • 23. While it’s certainly possible that RECOGNITION IS A RESULT OF GOOD RELATIONSHIPS (and good managers), THE OPPOSITE IS CLEARLY ALSO TRUE
  • 24. INCREASED PERFORMANCE RECOGNITION APPEARS TO BE ONE OF THE MOST EFFECTIVE WAYS to improve relationships between managers and employees.
  • 25. > I N FAC T, employees believe eit he r ty p e o f re co g ni ti o n is much more import ant tha n a c ash b o nus.
  • 26. E MPLOYEE/ MANAGER R EL AT I ON SHI P S A R E IM PROVE D BY P ERFOR M A N C E R ECOG N I T I ON EMPLOYEES CHOICE OF WHICH BENEFIT WOULD MOST IMPROVE THEIR RELATIONSHIP WITH THEIR DIRECT MANAGER. 50% 22% 5% SAL ARY B O NUS 28% A B OV E & B E YO N D R E COG N I T I O N O N GO IN G EF F O R T R ECO G N I T I O N
  • 27. P E RFORM A N C E R E CO GNI T I O N F UEL S E M P LOY E E I NNOVAT I O N
  • 28. SO, IF EMPLOYEE ENGAGEMENT ? increases with strong performance recognition, HOW DOES THAT AFFECT EMPLOYEE AND COMPANY PERFORMANCE
  • 29. THE FIRST MAJOR EFFECT THAT RECOGNITION HAS ON PERFORMANCE DR IVIN G INNOVATI ON A top p riority for successful execu tives everywhere.
  • 30. When asked how many new ideas EMPLOYEES GENERATED IN THE LAST MONTH TO IMPROVE THEIR COMPANY’S PRODUCTS, SERVICES, OR SYSTEMS THE RESPONSES WERE COMPELLING.
  • 31. T HE RESP O NS E S? Em pl oyees receiving st ro ng re co g ni ti o n g e ne rate n e ar ly twice as m any innovat i ve i de a s e a c h m o nt h. EMPLOYEES RECEIVING WEAK RECOGNITION EMPLOYEES RECEIVING STRONG RECOGNITION 1.8 NEW IDEAS per month to help improve their company 3 NEW IDEAS per month to help improve their company
  • 32. I N A D DI T I O N , Employees will proactively seek new ways to improve efficiency at their company when they receive strong performance recognition. EMPLOYEES RECEIVING WEAK RECOGNITION EMPLOYEES RECEIVING STRONG RECOGNITION 54% seek new ways to improve efficiency 87% seek new ways to improve efficiency
  • 33. While there are many factors that go into an individual’s or a company’s ability to innovate, We fou n d th at recognition c a n be a p owerf u l d river of continua l im prove m e nt.
  • 34. EMP LOY EE IN N OVAT I ON I S IM PR OVE D BY P ERFORM A N C E R ECOG N I T I ON EMPLOYEES CHOICE OF WHICH BENEFIT WOULD MOST IMPROVE THEIR INNOVATION FOR THE COMPANY. 32% 5% SAL ARY B O NUS 41% 27% A B OV E & B E YO N D R E COG N I T I O N O N GO IN G EF F O R T R ECO G N I T I O N
  • 35. P E RFORM A N C E R E CO GNI T I O N F UEL S E M P LOY E E O U T P U T
  • 36. THE SECOND MAJOR EFFECT THAT RECOGNITION HAS ON PERFORMANCE WO R K IN G AT MAXI MUM CAPACI TY In creasin g emp loyees’ willingne ss to work at their be st.
  • 37. EMP LOYE E & T E A M O U T P U T P E R C E N T O F E MP LOYEES WORKING AT 9 0 % C A PAC I TY OR ABOVE 53% CO M PANI ES WI TH ST R O NG RE COGN I T I ON 40% CO M PA N I ES W I T H W EA K R ECO GN IT IO N
  • 39. Employees have a wide variety of expectations ABOUT THE FREQUENCY AND NATURE OF RECOGNITION
  • 40. IDEAL PERFORMANCE RECOGNITION FREQUENCY MULTIPLE TIMES A WEEK ONCE A WEEK 9% 11% 19% MULTIPLE TIMES A MONTH 26% ONCE A MONTH 20% ONCE A QUARTER ONCE EVERY 6 MONTHS ONCE A YEAR 7% 9%
  • 41. HOW IS A MANAGER supposed to know how often HE/SHE SHOULD RECOGNIZE HIS/HER EMPLOYEES
  • 42. + T HE A N SW E R t hought fully combi ni ng f re q ue nt a nd informal recognit ion fo r “o ng o i ng e f fo r t ” wit h less frequent b ut mo re me ani ng f ul reco g nit ion of “above and b eyo nd p e r fo r mance.”
  • 43. O N G O IN G E F FORT, esp ecially w h en prov ided frequently and si nce re l y , can be used to recognize little wins an d en cou rag e em ployees to ke ep going.
  • 44. O N THE OTHER HAND, recog n iz in g employees less frequently but w i t h mo re fo r mality for a bove a nd beyond p erforman ce s ets a pa rt the m ost signific a nt ach ievemen ts i n a unique a nd soc ia l way.
  • 45. + RE SE A RC H S H OWS th at bot h t ypes of recogni ti o n a re i mp o r tant a nd s h o u ld be used in deliberate a nd co mp l e me ntar y ways.
  • 46. Source: Cicero 2013, The Effect of Performance Recognition on Employee Engagement