Unit 6 Employee Recognition

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Overview

To improve employee engagement at work, we learned the RESPECT model in our last unit. Additionally, we discussed the role and function of stewardship in employee engagement. During this unit, we will discuss employee recognition and appreciation, and how we can use employee recognition and appreciation to further boost employee engagement. Furthermore, Units 6-10 are specifically designed for students in the healthcare stream of the MA Lead program. Let’s begin.

This unit is divided into the following topics and a Case Study Analysis & Presentation for in person students:

1. The Carrot Principle;
   
2. The Four Key Levels of Recognition and Employee engagement.

Learning Outcomes

When you have completed this unit, you should be able to:

• Assess an organization’s engagement and stewardship practices and identify its strengths and weaknesses.
  
• Ensure high levels of employee loyalty within your organization by using best practices.
  
• Analyze the current practices of recognition and develop a standard of practice to effectively build a culture of loyalty and recognition.
  
• Develop critical thinking skills and apply best practices in relation to employee engagement and stewardship from the perspective of the operational leader.

Resources

Online resources will be provided throughout this unit.

6.1 The Carrot Principle

Most organizations strive to employ business leaders who set clear goals, communicate openly, treat people fairly, hold them accountable, and build trust. The most successful leaders also provide employees with frequent and effective recognition.

Unfortunately, surveys show that something critical is often missing from the equation. A number of surveys conducted among millions of workers indicate that “feeling appreciated” is of great importance to them. In fact, it is ranked #1, #2, or #3, together with “doing work that has value” and “working for an employer that I respect.”

Even so, a study conducted by the O. C. Tanner Company indicates that 74% of leaders worldwide still don’t practice recognition with their employees. Some of the study’s other noteworthy points are:

• 65% of respondents reported that they were not recognized at all in the preceding year.
  
• 79% of people leaving an organization reported “lack of appreciation” as a key reason for their departure.
  
• Of those reporting the highest morale at work, 94.4% agreed that their managers were effective at recognition.
  
• Organizations that effectively recognize excellence tend to be more profitable and can have up to more than three times the return on equity (ROE) than those organizations that do not place a high priority, or no priority on recognition, whether it be formal (institutional) or informal (situational).

The Carrot Principle, by Adrian Gostick and Chester Elton (2007), is a classic reading for employee engagement. In the book, successful leaders are described as leading with “carrots” rather than with sticks. Through their research and case studies, Gostick and Elton demonstrate that recognition can significantly improve operating results. There is often an element missing in companies that prevents them from achieving their business potential, and that is an accelerator. According to the authors, there is no accelerator with more impact than purpose-based recognition. Purpose-based recognition is the meaningful appreciation within the context of effective leadership.

Leaders who express appreciation are drawing on the most significant accelerator of human potential, which is the carrot. Defined as “something enticing offered as a means of persuasion”, the carrot in business/industry is what is used to inspire and motivate an employee. Those employees whose strengths and potential are recognized are much more likely to produce value and exceed expectations.

According to Gostick and Elton, organizations that can provide managers with a formal way (i.e. a structure) to recognize their employees and teams will win gratitude and increased productivity, as appreciation is a critical motivator of performance. Recognition gives co- workers a vision of what’s possible to achieve and the rewards that go with it.

Learning Activity: Reflect about Employee Recognition

• In this learning activity, you will reflect on the learned topic.

6.2 The Four Key Levels of Recognition and Employee Engagement

There are four basic areas of good leadership in which leaders need to be strong to lay a strong foundation for enhanced healthcare services. These four areas are:

Goal Setting: Clearly defining the purpose of a task and linking it to specific goals and results desired.

Communication: Discussing issues and sharing useful information with employees, and encouraging open dialogue and discussion.

Trust: Keeping their word, taking responsibility for mistakes, maintaining a high ethical standard and core values that positively impact the reputation of the organization.

Accountability: Ensuring people follow through on their commitments by providing clear expectations, guidelines, and directions.

In the Carrot Principle, the authors believe that when recognition is added to these Four Basics of good leadership, it accelerates employee performance. This is the guiding principle for “The Carrot Principle”. As an example, applying recognition is like the growth phases of a carrot:

1. Leaders must first set clear goals for planting the seed.
   
2. Then those seeds must be planted with open communication.
   
3. Then trust must be built, just as the carrot seed must be nurtured.
   
4. The leaders must then hold everyone accountable to their role and expectations, which is the weeding component of carrot cultivation.
   
5. Finally, the carrot is harvested.

As a business/industry sees “The Carrot Principle” come to life, employees are engaged, satisfied, and inspired to do what’s required for a strong team culture, customer loyalty, and increased profitability. As a result, leaders must not only master the Basic Four, but also learn how to use recognition to motivate their employees to achieve excellence in their work.

Providing recognition, however, is not just a strategy for getting work done, it is also a way for employees to achieve whole-life success, where they feel satisfied in every aspect of their lives. Work becomes fulfilling, impacting family, relationships, education, hobbies, etc. With recognition, an individual is able to set goals and experience fulfillment in every aspect and activity of their life. In order to achieve personal satisfaction and engagement, workers should be able to achieve their life goals both inside and outside the workplace. As a result, they will become more creative and inspirational.

Recognition in the workplace can result in millions of dollars in revenue, reduced expenses, increased productivity, and significantly improved service/profits. Recognition is also recognized as a powerful source of motivation and can be used to maintain a low employee turnover rate and, therefore, increase employee performance and, subsequently, business results.

The authors refer to surveys and the resulting data which has produced some fairly substantive conclusions. Three worth noting are:

• Organizations that effectively recognize excellence enjoy a return on equity (ROE) three times higher than the return experienced by firms that do not.
  
• Organizations that effectively recognize excellence enjoy a return on assets (ROA) three times higher than the return experienced by firms that do not.
  
• Organizations in the highest quartile of recognition of excellence report an operating margin of 6.6 percent, while those in the lowest quartile report 1 percent.

With these statistics and findings as their foundation, Gostick and Elton present “four key levels of recognition” that any organization and its leadership should implement into their policies and practices.

We would like to explore further the Four Basics of Leadership and how they can be used to increase employee engagement. It is difficult to recognize and reward something that cannot be seen or measured (both quantitatively and qualitatively). With this in mind, how do you see leadership in your organization in terms of the Four Basics?

Learning Activity: Watch and Reflect – Ted Talk: The Puzzle of Employee’s Motivation

To begin this learning activity, watch the following video (Note: this video is 18 minutes in length)

Watch: The puzzle of motivation

• After completing the activity above, reflect and include your analysis in this week’s Compendium.

Note that this question will help you prepare for session discussion.

Learning Activity: Watch and Analyze - Case Study: Employee Motivation and Employee Voice in Healthcare

• To begin this learning activity, watch the following video (Note: this video is 32 minutes in length)

Watch: The UCHealth Story_Waggl Webinar

• After watching the video, analyze.

Note that this question will help you prepare for session discussion.

Summary

In Unit 6, we have covered the essential components for employee recognition – what and why of cognition at the workplace, and the outcome of practicing recognition at work. What is employee recognition?

Employee recognition is the way organizations show how they value their employees. It can refer to how organizations show their appreciation for their employees’ contributions. There are many forms to express their appreciation over tangible or non-tangible rewards, for example, monetary compensation or non-monetary compensation. Organizations recognize employees for things like:

• Achievements
  
• Exhibition of desired behaviors
  
• Going above and beyond the organization’s expectations
  
• Professional milestones such as tenure
  
• Why employee recognition matters
  
• Based on the Ted Talk by Daniel Pink, employees long for positive affirmation. It motivates employees to do better for tasks assigned to them. Employee recognition helps:
  • Retain top talent
    
  • Increase employee engagement
    
  • Encourage employees for high performance

O.C. Tanner (https://www.thanks.com/why-thanks){target=“_blank”} studied employee engagement and how managers can tailor their workplaces to promote it. An employee survey conducted by O.C. Tanner (asked employees the following question - “What is the most important thing that your manager or company currently does that would cause you to produce great work?”)

Respondents answered in their own words, providing a variety of responses, but a clear pattern emerged. 37% of respondents said that more personal recognition would encourage them to produce better work more often.

Many themes were provided; however, autonomy and inspiration surfaced, recognition was the most common theme that emerged from responses. The study showed that affirmation, feedback, and reward are most effective for motivating employees to do their best work. See the complete results in the chart below:

By narrowing in on several statements in the Great Place to Work® Trust Index™ survey that measures how much employees feel recognized at work, we were able to see the impact of recognition culture on employee experience.

Great Place to Work https://www.greatplacetowork.com/solutions/employee-surveys analyzed 1.7 million employee survey responses gathered between 2018 and 2020 across small, mid-sized and large companies. They concluded -

• Recognition makes employees feel promotions are fair, spurs innovation and extra effort.
  
• After comparing the overall experience of employees who received recognition to those who don’t, we found that recognition was strongly tied to several areas of positive company culture.

The comparison between those who do not consistently feel recognized at work they find those who do feel recognized at work are:

• 2.6 times more likely to think that promotions are fair;
  
• 2.2 times more likely to say innovative thinking is embraced;
  
• 2.0 times more likely to say people here are willing to go above and beyond

Employee appreciation is linked to higher job satisfaction

If organizations do not have a recognition culture at work, the following could be the outcome expected:

• Employees who don’t feel recognized may struggle to describe what makes their workplace great
  
• How to create a meaningful employee recognition culture

There could be potentially 5 keys to meaningful employee recognition programs:

1. Be specific, be relevant: Recognition is more meaningful when it is tied to a specific accomplishment or organization’s objective.
   
2. Be timely: Recognition that arrives months after the fact isn’t nearly as meaningful as recognition received promptly. The longer it takes for managers to recognize employees, the less likely employees will see the affirmations as authentic. Make employee recognition a priority and have formal recognition systems in place so you can strike while the iron is hot.
   
3. Recognition comes in many shapes and sizes: It is indicated that people are motivated by more than just cold hard cash. It is also important to note that everyone has their preference (the language of appreciation) or style when it comes to giving and receiving appreciation, and then, recognize your employee accordingly and personally.
   
4. Little things go a long way: While it’s crucial to recognize major accomplishments, don’t overlook the power of the everyday thank-you to motivate employees.

Writing handwritten notes, or using the intranet to promote the good behaviors of individuals, can help instill a regular culture of employee recognition. These thank-you and shout-outs don’t have to come from managers alone; some employees may find recognition more motivating when it comes from their peers rather than from leadership.

1. Connect to the bigger picture: Recognition helps employees see that their company values them and their contributions to the success of their team and the company overall. This is particularly key when organizations grow or change. It helps employees build a sense of security in their value to the company, motivating them to continue great work. Regularly share news about how the company is striving to reach the mission, and explain how individual employee goals relate to that vision.

References

• Bridger, E. (2018). Employee engagement: A practical introduction.
  
• Todd, S. (2019) Book Review on Carrots and Sticks Don’t Work – Build a Culture of Employee Engagement with the Principles of RESPECT
  
• Kowalski, M., Basile, C., Bersick, E., Cole, D., McClure, D., Weaver, S. (2020) What do nurses need to practice effectively in the hospital environment? An integrative review with Implications for nurse leaders. Worldviews on Evidence-Based Nursing, 17(1), 60-70.
  
• Peters, J. (2019) - Employee Engagement: Creating High Positive Energy at Work (eBook).