Why is it so tough for managers to give Recognition?

While working with an organization that is new to broadbased recognition, we realized that giving Recognition is a skill, a huge behavioural change that is required on the part of managers. In the last 6 months that the Recognition program has been active in the company, the budget usage has been less than 20% of what is available to managers.

We undertook an effort to talk to all the managers who could give Recognition and asked them if they had used the program. 70% of the managers responded saying that they didn't know who and what for to recognize. 30% said that they were worried that they were setting an expectation if they recognized their people - i.e anyone they recognized would invariably expect a good annual performance rating. So they wanted to be very conservative with Recognition.

Now this is a classic case of managers not truly understanding what Recognition is and how fundamental a need it is. The Rewards, the gifts that come with Recognition are simply a manifestation of the Recognition experience and you can practice Recognition even without the rewards. So I probed a few of them on why they didn't send the employee even a thank you card - this costs nothing, probably won't set expectations. The response was "If I give anything, I will be setting expectations. So I would rather not do anything".

Now here is a case of a firm which has invested in building a recognition culture, has provided the tools and the money required for managers to practice recognition and is yet, struggling to implement the program. How many companies are riding this boat?

The only solution I can think of to this problem is to educate the managers on what Recognition is and help them practice Real Recognition.

Normal is Boring ? Really?

As people, we crave for something that is not normal, something that is different and this always excites and energizes us.

But when it comes to Recognition, organizations get mixed up between what is normal and what is different/exciting. Recognizing the top performers is "Normal". The same folks who get the recognition are also typically the poster boys / poster girls and are expected to be recognized. While the audience may clap when these folks get recognized, do they really get excited? It's like saying that I reached the office today in 30 minutes, the same time it takes me everyday, and I am excited about this.

So how do we use Recognition to really excite/energize employees? The simple answer - when you recognize employees who are not typically expected to get recognized. Wn you do things that are not normal. Now this does not mean you recognize someone for nothing. If you just look (not even hard), you will find that most people do afew things well once in a while that could merit some recognition (maybe not the big award, but a mention in a team meeting with a voucher thrown in). If the recognition is given genuinely for a specific activity/task the individual has accomplished or a behaviour the employee has demonstrated, it will be very meaningful to the employee who receives it. If it done in a manner that is impromptu (or seemingly impromptu), say at 11:05 AM amidst the cubicles, it will snap everyone out of their desks and excite them (simply because it is not normal) and create a charged up work environment.

Image Credits:
1) http://www.lendio.com/cms/wp-content/uploads/2011/08/bored-employee.jpg
2) http://g-square.blogspot.in/

Is Employee Engagement in Indian workplaces pathetic?

Over the last several years of interacting with several individuals working at various corporates in India, I have often felt that almost all employees were highly disengaged. They were simply checking in and checking out everyday, doing what was required to not get into trouble and collecting their paychecks at the end of the month. Once in a while they would stretch their hand a little bit and do something that gives them a promotion/a big bonus and/or some significant recognition.

Today, I saw an article in the Corporate Dossier (supplement of the Economic Times), where Jim Clifton, CEO of Gallup has given an interview. Jim minces no words in saying that the Indian workplace is so low on energy, that if it were a stock, he would short it.

While I clearly don't like the situation we are in, I would whole-heartedly agree with Jim on his observation about Indian work-places. It's not that every company in other parts of the world has a highly engaged workplace - but this argument cannot be the reason why companies and their leaders don't push the envelope around employee engagement. Frankly if something important needs to be fixed, it doesn't matter if other fix it or not.

Is there a really simple way to find out if employees who work for you are really engaged? Ask yourself if the employees who work for you would relate, respond and interact with you in the same manner if your title was suddenly taken away and you were just an individual. If the answer is "No", then your people are clearly in the check-in/check-out mode and will only do what is necessary to keep them out of trouble. On the other hand, if the answer is "Yes" or "To some extent" or even "Maybe a few of them would", then you are on the right track as a manager & leader. Individuals may work for a company, but for them a large part of the company is their manager, whose every action will impact them positively or negatively.

Corporate India - It's time to make our workplaces a better place for individuals to spend a large part of their time in.

Recognition Education Works

We recently decided to undertake an experiment with one of our clients to measure the direct impact of Recognition education on the usage of the Recognition program we had implemented in the company. The primary driver behind the experiment was to improve the usage of the Recognition components - specifically the Pure Recognition (Thank You Cards), Spot Awards (worth Rs.500) and a nomination based Award (both individual and team based).

We had divided the organization into 10 logical groups (based on Business units, departments), identified the usage of these Recognition components over the previous 4 month period. We then scheduled Recognition Education sessions for people managers in each of these 10 groups over a 4 week period. The session was a short 60 minute high impact presentation "Real Leadership using Real Recognition" and focused on sensitizing managers why Recognition is critical for the employees they manage and what is the RoI they would get for the effort in Recognizing their employees. We then measured the Recognition activities within each group for a period of 8 weeks post the 60 minute Recognition Education session. The % monthly increase range in usage in each of the 10 groups was the following:

1) Nomination Based Awards: 5-25%
2) Spot Awards: 24-44%
3) Thank You Cards: 30-75%

Clearly the % increases were significant (of course some of the numbers are very high because of the really poor usage within the groups earlier). The data point that was most impactful to me was the % increase in Thank You Cards being given. The education had helped people managers understand that giving someone a "Thank You" Card without any monetary value attached or a tangible gift associated, could still be very meaningful if done in the right manner with the right intent. The company is now on its path towards creating a strong Recognition culture - the key would be to sustain the momentum created and ensure that the usage levels stay where they are currently. 

What's in a Name? Rajiv Gandhi, Indira Gandhi & Jawaharlal Nehru

There are 450 government funded projects named after 3 individuals from the Congress - Jawaharlal Nehru, Indira Gandhi & Rajiv Gandhi. Agreed that these 3 folks were Prime Minsters, did a lot for the country and deserve some recognition. But this is a case of recognizing the same small set of people for almost everything that happens in this country - something's wrong here. One recent example is the government tax saving scheme to encourage new investors to invest their money in the stock markets. They named this after Rajiv Gandhi. Wouldn't this have been a great opportunity to recognize someone who founded the Bombay Stock Exchange - even Google does not return the name in a simple search?

This in some ways reflects what happens in a lot of companies. The same set of employees (the top performers) get the big bonuses, the big salary increases, the promotions, the training opportunities etc. etc. Agreed the top performers play a very significant and pivotal role in the success of a company and need to be rewarded and recognized. But if every recognition the company does involves this small set of employees, it is like saying that they are the only ones contributing and everyone else is biding their time and don't deserve any credit.

The key is to have a broad-based Recognition program that provides recognition opportunities for a large section of employees, at appropriate levels for the specific contributions made towards the overall success of the organization.

Appendix to the Post:
As per a RTI (Right to Information) filed:

• 12 Central Government programmes and projects are named after Rajiv Gandhi
• 52 state government programmes
• 98 universities and educational institutions
• 6 airports and ports
• 39 hospitals
• 74 roads, buildings and places and
• 15 national parks and sanctuaries

In the dynastic naming spree, even Jawaharlal Nehrulooks like an after-thought. The formidable listing ranges from Indira Gandhi Calf Rearing Scheme and Indira Gandhi Priyadarshini Vivah Shagun Yojana (Haryana) to Rajiv Gandhi Kabaddi Tournament, Rajiv Gandhi Wrestling Gold Cup, Rajiv Gandhi Stadium (three in Kerala alone), Rajiv GandhiIndian Institute of Management, Rajiv Gandhi National University of Law, Rajiv Gandhi Aviation Academy, Rajiv Gandhi Centre for Aquaculture, Rajiv Gandhi Shiromani Award, Rajiv Gandhi Khel Ratna Award, Rajiv GandhiFellowship for SC/ST, Rajiv Gandhi Wild Life Sanctuary,Rajiv Gandhi Mission on Food Security, Rajiv GandhiBreakfast Scheme (Pondicherry), Rajiv Gandhi Bridges and Roads Programme, Rajiv Gandhi Cancer Institute. There’s even a peak in the Himalayas named Mount Rajiv.

TCS & Cognizant have consistently outperformed Wipro, Infosys, HCL & Mahindra Satyam! Does it have anything to do with Recognition?

Over the last few years, in the big IT services industry in India, 2 companies have consistently outperformed the rest of the industry pretty much on all key financial parameters. TCS & Cognizant have grown revenues faster, have better profit margins, have better-than-industry attrition rates etc.etc. During the Infosys Q4 results announcement, a CNBC anchor made a statement that stuck with me - "We have seen this play out everytime. Infosys declares the results, the street gets disappointed, the sensex drops. Then TCS announces results, beating estimates and the street gets confidence in the sector once again".

Coincidentally, TCS & Cognizant are the only 2 companies out of the top 6 (the others being Infosys, Wipro, HCL & Mahindra-Satyam), in my assessment, that have had a broad-based Employee Recognition program established and operational for over 10 years now. Can we attribute their financial & business success primarily to their Employee Recognition program? While the answer is clearly "NO", having a broad-based Employee Recognition program in place is an indicator of a number of other softer aspects within the company.

1) The company truly believes that a large number of their employees add value and are responsible for the success of the company. While some employees may contribute significantly more than others, they feel that a very large percentage of their employees contribute and want to acknowledge this fact.

2) They are probably better at "True Delegation", by allowing junior managers and departments to design and run their own Recognition programs within a broad framework.

3) They are better at distinguishing employee performance, growth potential and valuing them for everyday contributions. They are less worried about employees getting upset because they keep getting recognized, but do not get the promotions or the big bonuses.

4) They have moved away from event based Recognition to localized Recognition. At both the companies, Recognition is now a localized event, rather than a big bang event with top management getting involved. At most of the other companies, the focus is still on the big-bang events (essentially a gathering of 1-2% o the top performers).

5) They spend much more money on Recognition than the other firms. Their overall Recognition spend is 4-10 times higher than the others. This means that they are putting the money where their mouth is.

In summary, I think it boils down to whether the management truly believes if all their people are contributing and want to acknowledge them for that, or believe that a lot of their employees are replaceable assets. The financial results are now showing.

PS: In another coincidence, the star of the ITES industry in India - GENPACT, also happens to be the only large ITES firm to have had a broad based Employee Recognition program for over a decade now.

Once upon a time

Last evening I was sitting in a bar sipping a few handcrafted beers at Bangalore's new microbrewery Toit in Indranagar. Right next to my table was a large group of employees from Intuit enjoying a company outing. I happened to see one of my high school buddies (after 15 or so years) and we exchanged hugs and numbers.

As the beers went down, this friend of mine was narrating a Recognition story - I overheard it (was too close to their table).

While in college, this friend of mine was a computer whiz. About 15 individuals who were giving their Chartered Accountancy (CA) exams were baffled by the introduction of a computer science test as part of their CA exams. They approached a professor at the college for help and the professor connected them with this young friend of mine, who was at home on a summer break from college. He helped them with the exams and all the 15 folks cleared the bar. The day after the results were announced, all the 15 individuals came to their young tutor's house with a gift.

This friend of mine, who is now a accomplished software project lead at Intuit today with over 15 years of global corporate work experience in blue chip companies was narrating this story as one of the greatest Recognitions he has received till date. Why?

It is apparent that the genuine, spontaneous nature of the gift giving exercise and the physical involvement of all the 15 individuals is the reason for this. The guy was narrating about the gift he had got, it was all about the Recognition.

An Award is meaningless without a monetary component. Really? What about the Oscar Awards then?

While all of us are watching the 84th Academy Awards roll-out, did you know that there is no "Monetary" award for the Oscar winners. All they get is the statuette. All the other benefits are indirect - global recognition, potential contracts, endorsements etc. Despite this, the Oscar awards are the pinnacle of Recognition in the movie industry, which everyone in the movie industry aspires for.

There are several lessons for corporates from this:

1) The premier awards in your organization do not need to have a large monetary component, if you are able to execute the Recognition process well. Over a period of time, the awards will be so aspirational, that no one will worry about the lack of a monetary component.

2) You get an opportunity to recognize the top few (nominees) while differentiating the best with just a statuette. This way the Recognition covers a larger employee pool.

3) Chances are, all your top performers are already making reasonable money and their careers are flourishing with promotions, investments in training etc. So in some ways, what they yearn for is "Real Recognition" for their high levels of performance.

4) You can use the event to bring out hidden talents in your employees - in terms of anchors, performers etc. If you search hard enough, you should be able to find enough youngsters who can pull off the event with passion.

The key is for the top management to believe that "Pure Recognition" will work and make the necessary investments to create a legacy program that will take a few years to flourish and create the necessary interest from employees.

Structured Recognition Programs in India - Summary

This was an article featured in the Feb issue of People Matters magazine (www.peoplematters.in) - http://peoplematters.in/articles/focus-areas-13/managing-and-rewarding-performance/rewards-special-structured-recognition-programs

Rewards Special: Structured Recognition Programs

Feb 9th 2012
By Jayanth Narayanan, VP & Managing Director, Asia Pacific Operations at Rideau Recognition Solutions

India is beginning to evolve in the space of employee recognition. Recognition is still clubbed with rewards and is an “Act of Faith”, a “Nice Thing to Do” in most companies. The largest companies in India are now beginning to design and implement a very structured recognition program. A few of them are pioneering the use of employee recognition to drive behaviors and achieve measurable business results. We expect this evolution to take at least another 6-10 years.

Most companies are using points as the preferred award currency i.e. every time an employee gets recognized, he/she gets points credited to his/her account, instead of a reward product. The employee then accumulates these points over a period of time and can redeem the points for merchandise from an independent catalog. Points have become the preferred currency, as it delinks the recognition from the rewards products and allows employees to choose gifts that they want. It also allows companies to manage their recognition budgets better, by assigning an appropriate rupee value to a point depending on the overall budget available in a year. This way, the recognition program stays constant and the spending can vary.

There are three categories of service providers in this space:

The first category is that of the rewards products providers – companies that provide gifts, certificates, etc. Companies in this space include Accor, Giftlinks, eYantra and several merchandise and gift product providers.

The second category is of those who offer a technology platform – a web-based solution using which managers can recognize and reward employees in a self-service model. The budget and the business rules governing the recognition system are built into the system avoiding the need for approvals every time a manager wants to recognize an employee. There are companies that sell this software on a SaaS (Software as a Service) model, where companies pay a very low monthly user fee with no capital expenditure. Companies in this space include QuadMo, BenefitsPLUS, RewardPort, etc. Many of these companies also provide a catalog of products for their clients to use. Some of the larger merchandise and gifting companies now offer a platform as a value addition. The technology platforms also offer a “Facebook” style portal to share and communicate recognition stories across the organizations. There are a few companies, such as TriggerO, which focus on only this component called as “Social Recognition”.

The third category is of the global recognition providers, like Rideau, who focus on helping clients achieve targeted business results using recognition, by identifying the behaviors to be impacted, designing a suitable recognition program, using a technology platform to implement the program and analyzing the data to monitor the progress and impact of the recognition initiative.

These companies price their services according to the impact the recognition program has on the desired business parameters. For example, if a company is looking at targeting better retention, a specific recognition program is designed, which focuses on enhancing the manager-employee relationship. It is a known fact that the manager-employee relationship has the single biggest impact on retention. Specific recognition initiatives include Service Milestone awards, extensive Spot Awards and unit/department level programs, rather than corporate wide programs. In the coming year, a lot more companies will spend money on Recognition & Rewards programs (1-2% of their annual payroll) and in 2-3 years, we can expect almost all companies to have internal rewards and recognition programs, with a technology platform in place.

Investing in Branding in a Recognition Program

It is absolutely critical to get the corporate communications folks involved with the Recognition program right at the beginning - at the conceptualization & design stage. Why do I say this?

The HR folks are more worried about the Program Structure, Administration Issues and Manager Training. But if the Recognition portal that is rolled out, the certificates that are issued from the program, and the cards (e-Cards, Thank You Cards, Birthday cards etc.) that the system sends out, do not appeal to the employees, the level of excitement that the program can create will diminish.

Whether we like it or not, while Recognition is important, it is not considered as being mission critical - i.e. missing a sales report is mission critical, while not thanking someone is now. This means that you cannot "PUSH" people to do Recognition. You can only educate them and create a "PULL" for them to use the Recognition portal and the tools available to do Recognition. Therefore, when they come to the portal, it should appeal to them. If they receive a "Thank You", they should feel good simply looking at the card and should want to send someone else a nicely designed "Thank You" Card. If they receive a certificate, they should feel like taking a colour print-out and showing it to their family and even display it in their work-desk.

All of the above means that you simply cannot compromise on the design quality and appeal of the employee facing components of the Recognition program - Portal design, User Interface, Design quality of cards, certificates. In addition, the designs should be aligned with the corporate brand - this is why it is critical to involve the corporate communications folks right at the beginning. First - they are the best equipped to figure out the alignment between the recognition program design and the various other communications initiatives in the organization. Second - they typically have a design firm on board who understands the company and can create design concepts that is aligned with the corporate brand.

Too much of Recognition

Over the last few months, I have been asked one question by a few clients/prospective clients - "If we do so much Recognition, won't it backfire on us? Won't we set people's expectations too high in terms of appraisal ratings, bonuses etc.? "

In all the cases, my response or my team member's response was the classic one "Has anyone ever told you to stop giving them Recognition?" - we then talk about various definitive studies around this including Gallup's Q12 survey, where one of the questions is "Have you been recognized in the last 7 days?". Using this ammunition of strong responses, we handle the question deftly.

But in the last several weeks, I have asked myself this question, and intuitively feel that this needs to be researched more and thought through more - even though I cannot really argue about the merit of the responses we usually give.

In order to try and do this in a meaningful yet fun way, I met with a few people managers in our client organizations, who don't seem to believe too much in the Recognition stuff (Raw criteria I used was those managers who don't get excited to meet with me to talk about Recognition).

Here is the data I collected from 5 of them - stated verbatim with minor edits:

1) Boss, if I keep giving out Spot awards to my people, I am setting expectations that they will get good ratings - I am the one who will suffer at the end of the year when HR tells me that 30% of my people will have to get a below average rating.
2) We are paying these guys a salary for showing and doing work. Recognition has to be done only when the guy goes above and beyond what is expected of him. Saying Thank You for what is in his job description makes no sense to me.
3) If I keep recognizing my people, they will stop valuing any awards I give them. Unless you create scarcity of awards, the value of the awards will go down and render them useless.
4) Look - we are a fast growing company. I would rather focus on promoting the good guys than do all this Award stuff. Maybe in 10 years, when our growth slows down, I will be forced to do all this stuff.
5) Don't get me wrong - I like Recognition and believe that it will have a big impact on our people. But our management needs to believe in it and provide budgets to do good stuff - right now we are doling out peanuts. If you throw peanuts, monkeys will dance - you won;t get performance. Come to talk to me after you have convinced our management to spend on Recognition.

I am not even going to attempt to analyze the data, but will probably try and undertake a small project to study this perception around "Too much of Recognition" not being healthy.

What is Social Recognition?

Over the last few months, multiple HR folks have been asking me about Social Recognition. Given that I have generally been a late adopter of technology trends, I really didn't have a good answer for what Social Recognition was. So I spent a few weeks reading about Social Recognition, talking to folks who are experts in Social media with respect to businesses. Here is my short understanding of what Social Recognition really means and the business impact it can have for organizations.

1) Those who have seen the movie "The Social Network" would recall that "Facebook" was about taking the social experience of college and creating an internet equivalent of the in-person social experience. In the same way "Social Recognition" is the internet equivalent of broadcasting employee recognition stories and allowing anyone interested to Comment, Like and follow the activities/thread related to a Recognition story.

2) Should HR folks think about Social Recognition - YES in a big way. Outside of the small costs involved in a technology platform to enable Social Recognition, everything else is free. Depending on how the employees use the tool, it has potential to become a highly engaging & employee location independent website. Plus it creates a healthy competition among managers to do more recognition within their teams/groups. The ones who use Recognition and the ones who don't, become clearly visible on the portal.

3) Well! - Social Collaboration platforms within organizations made a lot of noise but have not really taken off - i.e. organizations are not yet ready to pay for these platforms, which means they don't see tangible value yet. In the case of Recognition, the Social Recognition platform sits on top of a tangible Recognition program, which means that activities are already happening in the organization and the platform is only used to broadcast and spread the news. So chances are - more people will actually logon to the portal for nominating, reviewing, redeeming etc. So Social Recognition is not a new destination employees need to visit, but an addition to the same place where employees were anyway visiting. So unless you have strong underlying Recognition platform in place, introducing just Social Recognition will be futile.

Summary: Focus on establishing a strong Employee Recognition program first and build a Social Recognition platform on top of it. Just like in the movie "The Social Network", Social Recognition is about taking the offline Recognition experience onto the internet to turbo-charge the impact of the program.

Tax Treatment of Awards

While I am no tax expert, I wanted to share common practices used by companies while dealing with the tax treatment of awards. Readers are kindly requested to consult their respective tax experts before making any decisions for your company. The information below is simply meant to be a guide.

Ask an HR person in an organization how they deal with taxation of employee awards, and the most typical response you would get is that we don't worry about it upto Rs.5,000. Post that the amount is taxed. What exactly is this exemption of Rs.5,000 and what is covered in this Rs.5,000?

According to the large accounting firms, the Rs.5,000 annual tax exemption amount is only for organization wide non-distinguished awards (e.g. Diwali gift for all employees, New year gift for all employees). Any other award based on performance or milestones that are given to individuals need to be taxed and do not fall under this Rs.5,000 limit. This means that every performance or milestone based award given to an employee is taxable. Any award given to the employee - vouchers, products, merchandise etc. fall under this category.

What about trophies, framed certificates, mementos?

Currently the common practice seems to be to not worry about these and simply ignore the value of the these awards from a taxation perspective. Plus, for the income tax authorities, tracking who has received a trophy etc. is not practically possible. But tax experts suggest that at some point of time, companies will need to include the cost value of these trophies as an employee benefit and provide for the tax amount appropriately.

With the usage of Award programs and the value of the awards being very low in India, and the process to monitor spends being very complex, these spends don't seem to be on the radar of income tax sleuths at this time.

From a company perspective, I would generate a report, on a financial year basis, by employee, listing the various awards he/she has received alongwith the value. I would then hand this over to the tax experts in the company and seek their advice on how to deal with this. From a budget perspective, I would also provide for a "Gross-Up" amount on the overall Award program - i.e. If I have budgeted INR 1 Crore for award products in a financial year, I would increase the budget to about 1.3 Crores to provide for tax payments.

2012 - The Year of Employee Recognition in India

My best wishes to all of you for a great 2012.

My Recognition Prediction for 2012: 2012 could be the YEAR for a large number of companies in India to launch a robust & structured Employee Recognition Program. We wish them all the best with their efforts.