Short Analysis of Recognition Practices in India

Over the last few years, there has been a lot of talk about Indian companies adopting global best practices in a number of management areas. One of the questions, clients invariably ask me when I meet with them, is to find out how other Indian companies are adopting “Recognition” and how much they spend on “Recognition”. I did an analysis of 30 large companies in different industries I had met with (think of it as the Sensex companies for Recognition), and collected some information about their Recognition activities and spends. Here are some of the key findings:

1) RECOGNITION ADOPTION: Adoption of Recognition as a strategic tool varies from being virtually non-existent (in one case) to being heavily integrated within their culture (in 2 companies, the practices seem to be robust enough to the extent, that my colleague and President of the Recognition Management Institute (www.realrecognition.com), Roy Saunderson (http://rideau.com/blogs/roy-saunderson), believes that they could be a candidate for RPI’s Recognition Best Practices award (www.recognition.org – Recognition Professionals International), if the companies applied.

2) RECOGNITION SPEND: Not surprisingly, the spend on Recognition is much lower than the North American standard of over 2% of annual Payroll costs. The annual Recognition spends in India range from .002% to about 1% of payroll costs, with the average and median both around 0.5% of payroll costs. To put the figures in perspective, if a company has about 15,000 employees and an average employee salary of INR 200,000 per annum, then they would be spending around INR 1.5 Crores annually on various Recognition initiatives. A number of companies on my list are probably spending more indirectly (e.g. travel costs related to big recognition events, additional travel costs for overseas holidays etc.), but I have used conservative figures based on whatever credible information I had with me.

3) RECOGNITION REACH: A bulk of the Recognition spend (over 70% in most companies) is focused on the top performers (10-15% of the employee population). This is an area companies have to really think about and determine how they can adopt Recognition in a manner that can touch a larger employee population – I am not professing recognizing and awarding employees for things that don’t merit recognition, but companies need to design recognition programs to recognize employees for exhibiting behaviours/company values and doing activities that drive towards the vision and business objectives. The focus currently seems squarely focused on business performance providing very few opportunities for the non-superstars to get recognized in a meaningful manner.

4) AWARDS: The most popular award for top performers is an international holiday with Bangkok clearly being the favourite destination. Other popular destinations were Goa, Dubai and Malaysia/Singapore. Cash and Cash equivalent awards are very popular and extensively used.

5) RECOGNITION PROGRAM OWNERS: Most of the Recognition programs seem to be driven by the HR resources supporting a business rather than by the line managers in the business. System adoption for Recognition programs is minimal (a few companies use their intranet and a simple plug-in solution to automate some of the processes), with a bulk of process around nominating and awarding employees being done manually by the HR resources. Two companies have adopted a globally proven and robust platform.

I can go on and on with my analysis (probably better suited for a white paper once I collect more information and obtain permission from companies to share specific data), but I will stop here and let you folks digest the information above.

Contra View on Recognition

I recently had a fascinating meeting with the HR lead of a very large financial services institution. After I had passionately made my pitch on why Recognition is critical for companies and the business benefits of a good recognition program, the person reacted in a very unexpected manner.
He told me that in his company, they don’t believe in or do any of this stuff. He went on tell me “We do things that really matter to the employees – growth opportunities, security, market aligned pay with aggressive performance linked payouts. Since we have consistently been growing 30% year on year, employees are pushing themselves hard because they can see real growth potential – we have been walking the talk by promoting people internally very aggressively. We also bend backwards to assist employees in times of distress – We have had situations where we have hired a helicopter to provide medical help to an employee”.
I then asked him how satisfied their employees were and if lack of recognition was pointed out in their employee surveys – he told me that they don’t do employee satisfaction surveys. It was more important for them to have aligned employees rather than satisfied employees as they believed that “satisfaction” was too subjective. They did employee alignment studies – their aim was to ensure that employees were aligned with the business objectives and values of the company.
He then went to tell me how they have had bad experiences with awards, vouchers, merchandise in the past (primarily with misuse of these award products) and now they have almost gone into a state of “Nothingness” with respect to employee rewards. The only thing they do is to send their top performers on a holiday overseas.
In summary what he told me was that stuff like Recognition will work in a company which is not growing aggressively and once they run out of other options to positively impact the lives and careers of employees.
My aim with this post is to simply present the contra view, a leading industry player shared with me, rather than react to the views.

Recognition and Obama's visit to India

When Rideau decided to establish a business presence in India, it was really based on the fundamental belief that “Recognition” was about real leadership, and people and businesses in India would value this thought process in the region. Over the last several months, we at Rideau, have been evangelizing this concept of Recognition and how we can all work together to make this world a better place to live in.
President Obama’s recent visit to India, to me, is simply about Recognizing India’s newly developed importance in the world stage – both from an economic and a global security perspective. A few of my colleagues from the USA asked me - what was Obama really trying to accomplish with the visit and if there were any concrete outcomes for the US from the visit? Clearly, what my colleagues were asking me were for the specific results of Obama’s visit to India.
One of the key areas within Recognition, we have been advising clients on, is to start focusing on Recognizing the behaviors and activities, that would eventually lead to results. The hope is that a larger segment of the employee population could be recognized for exhibiting the identified behaviors, making them more engaged with their work, eventually leading to a larger segment of the population delivering business results.
My response to my colleagues in the USA, about the results of Obama’s visit was along the same lines. The President seems to believe that India would be a good partner for the US in the 21st century. Historically over the last 63 years (since India gained independence) the partnership between India and the Western world has primarily been a one way street – The western world giving and India taking. This seems to be changing with India’s growing economy, and the belief now seems to be around a mutually beneficial partnership where both partners give and take in a collaborative manner. The visit really underlines the need to begin a strong relationship between various sections of the two countries. Coming to specific results, around 20 deals were announced, which according to Obama would lead to the creation of 50,000 jobs in the US. Would these deals not have happened without the Obama visit? - the answer is “No”. Most of the deals would have anyway happened. But what the visit has done is to showcase these deals in a manner where a larger section of the economy on both sides, will now explore increased partnerships. This should in all probability lead of additional investment and job creation on both sides. Essentially the visit has simple recognized these deals and provided an incentive for other such deals to follow through.
The other thing the Obamas accomplished during the trip was to come across as normal people with the same kind of worries and vulnerabilities as people in India – Jobs for American people, Security for the common man and the fight against terror. Their body language and the way they carried themselves – whether it be dancing to Indian music or speaking at the parliament – Barack Obama came across as being a common man focused on doing good for the world. The image of the USA being a superpower that bullies the world was definitely wiped out during this trip – this could never have been accomplished without a personal visit by the President. What result will this behavior lead to? For one, when people in the US talk about India’s outsourcing industry taking away American jobs, the response in India will be one of empathy, rather than a knee jerk reaction. The industry will probably start communicating better on why outsourcing is infact good for the USA as it will help US companies focus on productivity and innovation leaving the routine activities to someone else. The second, people in India (a huge and growing consumer base) will start looking more favorably towards American products and services. So the end result could be one, where US companies innovate and create products that find a large and profitable market in India, while at the same time, the outsourcing industry in India supports the operational aspects of US businesses, providing wealth to a large Indian population to go out and buy those products. This self propelling cycle is the one that will eventually help both the US and India grow together.