Forbes India 15th Anniversary Special

Employee recognition is vital, but often overlooked

The single biggest contributor to staff attrition is lack of recognition, says Research firm OC Tanner's Executive VP David Sturt

Published: Aug 28, 2015 06:44:33 AM IST
Updated: Aug 28, 2015 11:04:03 PM IST
Employee recognition is vital, but often overlooked
In an interview in Mumbai, OC Tanner Institute’s Executive Vice President David Sturt said, “Our research shows that recognition is part of the glue that holds an organisation together.”

Many employers believe that a good salary and reasonable work hours can retain talent in the workplace. And no doubt, they can...but something far more important lies at the crux of employee retention: Recognition.

It’s a concept that seems so simple and hackneyed that most employers overlook it. In 1928, Obert Tanner founded the OC Tanner Institute with the hope of addressing this problem. Since then, the institute has provided a range of services, which enable companies to align employee satisfaction with their larger values and goals. OC Tanner’s research indicates that adopting this basic practice can give employees a deeper sense of fulfillment and create a motivated workforce.

In an interview with Forbes India, OC Tanner Institute’s Executive Vice President David Sturt and Managing Director, India & APAC, Ty Brown talk about the company’s recent foray into the subcontinent and throw light on the complexity of the issue.

Q. How important is recognition for an employee and why?
We all have a desire to make a difference in our jobs, and this is all the more true for millennials. People want to believe, what they’re doing matters. So, from an individual standpoint, recognition is vital. In fact, the top reason for attrition is usually, the employee not getting acknowledged for the value she is contributing. So, it’s important enough to influence decisions like ‘where to work’. One of the worst things in an organisation is not to acknowledge an employee after she has made a difference. It sends a huge, often unintended, message that it just doesn’t matter around here. Our research shows that recognition is part of the glue that holds an organisation together.

Q. How can organisations benefit by giving recognition?

Organisations that have delivered high performance have generally been clear about what they value, and hold that up. So, when individuals contribute value, or do things that move the organisation forward in some differentiated way, companies like to highlight that on a pedestal. That serves as a model and sends a message that this matters and personifies the value the company is trying to drive.

Q. What is recognition like in India?
Recognition isn’t new to India. Many companies practice it in some form—like giving long-service awards. But, initially, they weren’t tying it into corporate values and hence didn’t get any returns. We are working with them and it has been progressing. Earlier, companies were just happy to have a recognition programme, and didn’t bother about tailoring it to Indian needs. Then, MNCs said they need to fine-tune it to local conditions. Now, MNCs and Indian firms want recognition programmes, not just to be nice, but also to achieve their business objectives.

Q. Most companies have Human Resources (HR) departments. In spite of that, why do they need external help to solve employees’ problems?

Not all HR practitioners are experts across the whole spectrum of activities spanning Human Resources. You have HR Generalists, HR Operational Experts, HR Learning and HR Organisational Development. HR tends to be fairly specialised and to become good in any one area, you’ve got to spend some time and understand it. HR departments hence look to industry experts for research and best practice. So often, we’re roped in by HR leaders, or senior executive teams, trying to instal a stronger culture of recognition and appreciation. They’ll bring us onboard to help and support HR leaders with a range of things, that maybe they don’t have access to or that they can’t build themselves.

Q. Are companies always willing to accept help?

It’s common to go into a large organisation and see all kinds of recognition programmes. And, in some ways, they work; but not really. If it’s more ad-hoc and haphazard, companies tend to not be as interested in bringing us in, because they think they’ve got it figured out and it’s not aligned to the organisation’s strategy. They don’t have a process to make it consistent across the enterprise. There are many gaps in those one-off solutions. But if they tackle it as an enterprise strategy, that’s when they get more serious and bring in experts. I’ve seen both sides of that equation.

Q. What are the most common problems (apart from lack of recognition) that employees face, from an HR standpoint?
We see a range of things. Engagement has been a huge issue we’ve seen. Employees make a decision on whether or not they provide their best work. Whether they give their discretionary effort to their job. And so, that’s something we track a lot, to test how engaged employees are.

There are challenges with levels of autonomy. Sometimes employees feel frustrated if they are overly micromanaged or if they’re not given the latitude to be able to make a difference in their jobs. Issues with bosses inevitably sprout. Usually that’s a function of the relationship: How much interaction that leader has with them. Other issues involve team dynamics. You can tell a lot about the team health based on peer-to-peer interactions, and whether or not peers feel empowered to support and recognise one another at a team level.
Q. Is favouritism destructive, and if so, how?

When recognition is poorly done, it tends to backfire and create animosity in the team. Sometimes, managers do not consciously choose a favourite; they’re just too busy to notice what else is going on in the team. We’ve seen a significant increase in peer-to-peer recognition. For many years, recognition was the purview of the manager only, with top-down recognition. What we’ve helped initiate across the industry is helping to create more peer-to-peer opportunities. Peers are way more observant about what’s going on than a busy manager. That’s a way to offset recognition being delivered to the same person over and over and being blind to the other contributions that are being made across the team. I think that’s true across the enterprise. There are certain jobs that attract more recognition because they’re more visible and I think you have to be wise about balancing that and keep an eye out for those who are delivering significant value, but maybe are in a quieter or non-visible part of the organisation.

Q. Do you feel a linear structure is superior, in organisations where there’s not too much hierarchy?

I think that tends to work better. It depends on the organisation, but flattening helps as it gives more exposure for the leader to be a part of the team. In young organisations, much of what used to be a manager’s responsibility is being shared across team members. Some call this trend the ‘democratisation of the workforce’, and I think it’s wise.

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