Recognition in a Dowturn

Rewarding and recognizing performance is especially important in a downturn.

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 recognize staff in a bid to boost performance, some have kept their investment in such programs steady, while others have rationalized their spend as part of cost-cutting programs across the entire organization.

Most companies have maintained their commitment to rewards and recognition, despite others cutting back. Still, companies realize that recognition, maybe less so reward, is an integral part of business. Despite economic conditions, companies still realize that they need to invest in their teams.

Recognition plays an important role in an economic down turn. There are people who have missed out on bonuses or who are missing out on pay rises as a result of a pay freezes, but one thing companies can do is to continue to recognize their people. The authenticity of how an acknowledgement is made is really, really important – much more so than an award that someone gets just because they’ve spent so many years with a company.

Improving discretionary performance is important in an economic downturn – a particularly good time to make a strategic investment in performance improvement. When employees perform better, the company performs better and while there has been some affect on non-sales generating areas, companies are still recognizing that the people generating income need to be motivated. Those sorts of programs haven’t been affected either on the incentive or rewards side.

Return on investment

Return on investment in reward and recognition programs is being scrutinized more closely in the downturn. Companies are looking more closely at the level of return, which also needs to be more tangible than it has been in the past. Most companies, now more than ever, 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.

The ROI on an incentive program is obvious: low fixed cost element and a high variable cost element, so that when people generate revenue, such programs pay for themselves because people are hitting their targets. It doesn’t really matter what the budget is, however, with a smaller budget you have to be more clever about how you put the elements of the program together.

Boosting discretionary effort is vital in tough times, and companies need to think about the “loyalty mirror. The more the workforce is engaged, the higher the customer loyalty, and this absolutely goes to profit and the bottom line. Gallup has given us the figures. Engaged employees deliver 27 per cent higher profit, 50 per cent higher sales and 50 per cent higher customer loyalty. So it’s just a commercial decision,” she says.


Human Resources’ role in reward and recognition

HR is in a prime position to help make the most of any reward and recognition programs. Now, more than ever, leadership teams want increased discretionary effort. And the only way to get that is if people feel engaged with the organization.

To get engagement you've got to go through the three basic steps. Firstly, do people have all the performance development tools hat people need - that's the HR role. Secondly, are people emotionally connected to the organization? And, thirdly, are they connected to the brand?

Te 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.

[Source: Human Resource Leader, 8 July 2009]

Retention in the Hospitality Industry

Retention Retention Retention

Some numbers for you:
Cost to recruit and train one mid level manager 10K - 14K
Time to find and train on average 6 months
Current turnover average in the industry 40%

I hear from clients and contacts in the industry often about the difficuties and costs when it comes to keeping quality people, especially of late. While I have a distrinct advantage in targeting candidates in the market, it's up to the client to implement methods to retain that person. It's a real crisis in the Western Canada market right now and I don't see it getting better any time soon. You needent think you're alone in this increasingly difficult task of retaining people. Everyone in the hospitality industry feels the impact of the exodus of front-line staff and management to Oil in Alberta. BC is affected by this and is also not all that far behind with 2010 only 2 years away. So what does it take to minimilzie the impact?

As much as it seems to have come down to money, money money, the companies that are succeeding in winning over quality candidates and keeping them on board are using a few methods, including money, and are continiously seeking out alternatives to keep people.
The approaches that I see working are comprehensive and target these goals: attract, challenge, and compensate.

I don't really need to say you'll attract greater candidates using an industry focussed recruiter, right? Attract the best candidates by putting effort into presenting your company in the most favorable light possible. This is not always accomplished with a job advertisement and job fairs but they certainly make a first impression for good or bad, so take the time to explain the position and the company culture. Too many people don't consider just how much appearances mean to candidates. They want to be valued and that is first demonstrated with your putting the effort into presenting the opportunity and company well in print, web and in person.

Once you've got their attention, they will likely be thinking, "How can this company can help me build on my work experiences". For those who didn't get the memo, IT'S AN EMPLOYEES MARKET! And the candidates know the tide has turned and they're in the driver's seat. The pros and cons of that and how to deal with it may be a future topic. Most candidates I've spoken with over the years want to develop and be challenged in their work and this comes across as the number one priority above all other concerns. This is especially true with the younger workers just coming up the career ladder. The point is, you must have either a succession plan for the position to put forward or be offering a position somehow beyond their current scope.

Compensation. It's really not going to work to continue to say, "We want people who don't value money over all else". I've heard this more than a few times, but would you work for 30K? At the end of the day, we all look for a good compensation package - and yes - the fair, good and excellent candidates all consider this before taking a position. And rightly so. Anyone who thinks they don't have to respond to the increasing salary ranges the industry demands will have difficulty attracting, and most certainly retaining, great people.

Consider again the time and cost to get a new person on board along with the turnover rate in the indstry as noted above. Is it clear that those who succeed in targeting and retaining the best candidates are paying attention to how they attract, challenge and compensate people? It is to me, I've seen it working.

Happy hunting,
Colleen