Recognition in a recession

Publication: HR Leader Magazine
Date: July 2009

Excerpt:

The economic downturn has impacted on companies and their approach to reward and recognition in a variety of ways. Some companies have actually increased their spend and efforts to reward and recognise staff in a bid to boost performance, some have kept their investment in such programs steady, while others have rationalised their spend as part of cost-cutting programs across the entire organisation.

Alan Heyward, general manager of Accumulate, says that most companies have maintained their commitment to rewards and recognition, despite others cutting back. “Still, companies realise that recognition, maybe less so reward, is an integral part of business. Despite economic conditions, companies still realise that they need to commit to this,” he says.

Return on investment

Return on investment in reward and recognition programs is being scrutinised more closely in the downturn, according to Heyward. “Companies are looking more closely at the level of return, which also needs to be more tangible than it has been in the past,” he says.

“Most companies have a clear understanding the reward and recognition program they have in place and what they want out of it. Companies don’t run them just because it’s good to look after employees.”

Reward and recognition trends

In addition to more broad-based programs, Heyward says the trend towards non-cash rewards will continue. Cash-based incentives and commissions are expected as part of compensation and entitlement, he says, and often “cash gets spent very quickly and the link between their performance and the reward is forgotten quickly”.

HR’s role in reward and recognition

Heyward says the key role for HR is in championing an initiative to the executive team to help them understand how reward and recognition can contribute to a broader strategy. “HR has to put it in the context of the business. Obviously there is a cost to such programs, and, if these come into question, HR’s role is in helping the business understand the non-financial benefits.”

Elements of successful reward and recognition

• Reward behaviour as well as performance, because behaviours such as exhibiting company values or excelling in customer service contribute to outcomes
• Everyone should have access to the reward and recognition program – not just high achievers or sales professionals
• Increase frequency of rewards and recognition to reinforce positive performance and behaviour
• Secure strong executive support, so a company’s leaders own and drive the program, and not just HR

Source: Alan Heyward, general manager, Accumulate