SHRM/Globoforce Survey Reveals Growing Impact of Recognition Programs on Performance Management

April 12, 2012

2 min read

April 12, 2012

2 min read

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More than half of companies with recognition programs also observe higher levels of employee engagement, retention, and productivity

SOUTHBOROUGH, Mass., and Dublin, Ireland – April 12, 2012 – Sixty-four percent of companies that have an employee recognition program say their employees are rewarded according to job performance versus just 36 percent of organizations who do not have a recognition program in place. These are just two of the noteworthy statistics from the SHRM/Globoforce Employee Recognition Survey*, announced today by GloboforceOpens in a new tab® (www.workhuman.comOpens in a new tab), the world's leading provider of employee recognition solutions, and Society for Human Resource ManagementOpens in a new tab (SHRM), the world's largest association devoted to human resource management. The SHRM/Globoforce semi-annual survey examines the current state of HR leaders' employee engagement and recognition practices and their impact on performance management. Today's leaders face increasing competition to hire skilled workers and retain top talent – a business's number one asset. The survey reveals that employee engagement is still the number one priority among HR professionals. The recent survey also uncovers a connection between recognition programs and engagement and retention levels, all crucial elements amidst an awakening job market. "We're witnessing intense competition for talent that requires new approaches for energizing, engaging, and evaluating a global workforce," said Eric Mosley, CEO of Globoforce. "Performance management has long been viewed as the underlying way this is done. Yet, as this latest survey shows, the lack of ongoing feedback continues to be its missing ingredient. By using a social performance management strategy powered by employee recognition, HR leaders can fill that critical gap of feedback. The result is higher levels of employee engagement, satisfaction, and productivity." "The latest SHRM/Globoforce survey shows a growing introspection among HR leaders. They know how critical HR strategies will be in 2012 and well into the future," said Mark Schmit, SHRM's vice president of research. "By taking the next step beyond simply talking about employee engagement and proactively addressing it with tools like employee recognition, HR leaders will have greater success in elevating all key HR metrics." Among the 770 HR leaders who responded to the survey, key insights include:

Employee engagement is the top HR challenge but underutilized

According to the survey, 94 percent of HR leaders say employee engagement is an important or very important workforce challenge they currently face. However, only 42 percent of respondents currently track employee engagement levels, missing an opportunity to address low engagement levels within the organization with targeted, proactive strategies. In fact, among companies that measure engagement (versus those that do not), HR leaders say:

More employees feel rewarded according to job performance (69 percent vs. 49 percent)
More managers acknowledge and appreciate employees (56 percent vs. 46 percent)
More employees are satisfied with their levels of recognition (37 percent vs. 23 percent)

Employee recognition fills the feedback gap for effective employee performance management

The survey finds that 45 percent of HR leaders do not think annual performance reviews are an accurate appraisal for employee's work while 42 percent do not think employees are rewarded according to their job performance. Examining this by companies with recognition programs versus those without:

55 percent of companies with recognition programs say their managers effectively acknowledge employees.
Conversely, only 36 percent of companies without recognition programs feel employees are effectively acknowledged and appreciated by managers.

Employee recognition delivers ROI against key HR metrics

Among organizations that measure the ROI of their employee recognition programs, HR leaders observed increases in key metrics. More than half of survey respondents saw increases in productivity, customer/employee retention, employee engagement, return on profit margin, and return on equity as a result of their employee recognition program. Percent of HR leaders who say they observed an increase in these metrics as a result of their recognition program:

Employee productivity - 63 percent
Employee engagement - 61 percent
Return on profit margin - 58 percent
Customer retention - 52 percent
Employee retention - 51 percent
Return on equity - 50 percent

Survey Methodology

* The SHRM/Globoforce Employee Recognition Survey is an employee recognition survey that examines employee engagement, performance management, as well as other key metrics associated with employee recognition. The survey is commissioned by Globoforce and conducted in collaboration with SHRM. There were 770 responses from organizations with 500+ employees, resulting in a margin of error of +/- 3 percent at a 95 percent confidence level. The online survey was conducted by SHRM from December 22, 2011 – January 12, 2012.

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