columbus compensation association february 5, 2009 stan striker

Columbus Compensation Association

February 5, 2009

Stan Striker

Things you will take away…• Motivation beyond basic benefits• Employee engagement and the

connection to customer satisfaction

• Research tied to recognition and it’s impact on employee satisfaction

• The role of the front-line manager• Best principles of recognition

Current State

• Drivers creating change in the workplace:– Mergers & acquisitions– Down-sizing– Budget cuts– Role consolidation– Changing workforce profile– Benefits, compensation adjustments– Cultural alignment– Customer satisfaction focus

Total Rewards Model

Performance ImprovementPerformance ImprovementEngage, Motivate, Recognize, RewardEngage, Motivate, Recognize, Reward

Basic CompensationBasic CompensationAttract, Retain, DevelopAttract, Retain, Develop

Base PayBase PayMerit IncreasesMerit Increases

Skill-based Skill-based CompetencyCompetency

Base PayBase PayMerit IncreasesMerit Increases

Skill-based Skill-based CompetencyCompetency

BenefitsBenefitsBenefitsBenefits IndividualIndividualIndividualIndividual GroupGroupGroupGroup ProjectProjectTeamTeam

ProjectProjectTeamTeam

Total Performance Management StrategyTotal Performance Management StrategyTotal Performance Management StrategyTotal Performance Management Strategy

Business Objectives and Desired CultureBusiness Objectives and Desired CultureBusiness Objectives and Desired CultureBusiness Objectives and Desired Culture

• The total rewards model illustrates the total investment organizations make in their human capital.• Basic compensation makes up the entitlements as conditions of employment.• Performance Improvement opportunities engage, motivate, and focus actions.

WorldatWork

Recognition or Incentive?Definitions

Incentives

Incentives

• “Do this, get that”• Formula based• Pre-announced• Focus: Tangible value• Self-funded

Organizational improvement primary objective

RecognitionRecognition

• “Great Job”• Discretionary or

competitive• Generally “after the fact”• Focus: Psychic value• Budgeted

Reinforcement of corporate values primary objective

How Not to Deliver Recognition

“I can live for two months on one

good compliment.” Mark Twain

Dr. Bob Nelson

“You’ll never get the best from employees by trying to build a fire under them – you’ve got to build a fire within them”

What is the Impact of Recognition?

The Issue The Impact

RetentionEmployees satisfied with recognition 20x more likely to spend career with company1

Engagement Employees satisfied with recognition 70x more likely to be completely satisfied with their job1

Alignment Recognition Training empowers managers to reinforce the behaviors that drive organizational strategy

Individual Performance

Recognition= engagement factor with strongest correlation to improved individual performance2

Organizational Performance

“Recognizing excellence” correlates with 6 times greater operating margin3

Customer Satisfaction

Work locations with top R&R scores have top Customer Sat scores4

Consolidation Up to 35% reduction in administration costs4

1 2006 Maritz Research Poll2 2006 Linkage Analysis Study – Maritz Research 3 Incentive magazine, August 2005, pg. 10 Question wording: “My company recognizes excellence?”4 Customer Satisfaction and Recognition analysis performed for financial services clients

* Forum for People Performance Management and Measurement Research at MeDill School at Northwestern University

In other words!

“There is a direct link between…”

So, where is the disconnect?“Perception is not always reality!”

Factors Employees ManagersFull appreciation for work done 1 8Feeling “in” on things 2 10Sympathetic, help on personal problems 3 9Job security 4 2Good wages 5 1Interesting work 6 5Promotion/growth opportunities 7 3Personal loyalty to workers 8 6Good working conditions 9 4Tactful disciplining 10 7

Sources: Sheryl & Don Grimme, GHR Training Solutions Bob Nelson, Blanchard Training & Development Ken Kovach; Valerie Wilson, Achievers International

Manager Skills and Knowledge“People don’t leave jobs, they leave managers.”

Do managers and supervisors have the knowledge, skills and abilities to deliver effective recognition?

– Train managers on:

• The business imperative for recognition

• Key recognition and reward principles

• How to give effective recognition

• Their responsibilities with the new program

What’s Going On?• Satisfaction with recognition is always among the lowest rated

items on employee engagement surveys.– Even among companies that otherwise fare well

• Problem: Recognition that is not ‘meaningful’ is at best ineffective…and at worst de-motivating.

• Design is then a very important factor to delivering effective recognition

Best Principles (Not Practices)World-Class employee recognition plans reflect consistent principles, i.e., plans that are…

• Imbedded in philosophy and core values

• Championed by senior management

• Owned and sponsored by unit & line management

• Viewed as investment, not expense

• Used consistently and equitably

• Decentralized and tailored to meet business

unit objectives

• Tailored to respect that different people

are motivated by different forms of recognition

• Continuously evaluated and renewed

Understanding Motivation: Our Whole-brained Philosophy

Focus Shapes PerspectiveThe act of paying attention creates chemical and physical changes in the brain

Repeated, Purposeful Attention Focusing on specific ideas, closely enough, often enough and for a long enough time changes behavior

Source: “The Neuroscience of Leadership” by David Rock and Dr. Jeffrey Schwartz

You must rewire the brain to create new habits and get past the discomfort of change

Positive Reinforcement

Encouragement and reinforcement of new behaviors helps brain build

new pathways

Human Truths Require a Whole-brained Approach

Even when people want to change, it’s hard to learn new behaviors and habits

People alwayshave the power to

choose

People base actions on emotions as well as rational thought

Use positive and meaningfulconsequences for changing behavior and achieving results

People’s behavior is shaped by consequences

Focus, repetition and feedback are necessary to “rewire” the brain

Include communications, education and leadership to help people understand the goals and strategies and make their own connections about the importance of achieving common goals

Make sure program design is both fair and fun to engage both the left and right brain.

1. What do you want me to do?Role Clarity: easy to understand direction

2. Why is it important?Strategy & Vision: embedded philosophy, values, management and leadership

3. How do I do it?Competence & Capability: integrated program, continuous communication

4. What’s in it for me?Rewards & Recognition: meaningful and motivating rewards

5. How am I doing?Measurement & Feedback: monitor results, provide feedback and communication

Reinforce a whole-brained approach by

answering 5 key questions.

Educate and Communicate

Engaging Events

Cascading Meetings

On-Going Communications

Everyone

Managers

Champions

Measure and Feedback

• Four Levels:– Program Usage:

Given and Received– Behavior Tracking:

Recognition Criteria– Integration:

Engagement Scores

– Linkage to business results and ROI

What rewards best drive behaviors?

“…psychological processes can increase the perceived value of tangible non-monetary incentive awards over and above cash-based awards…”

The SITE Foundation, Prof. Scott Jeffrey, University of Chicago

21

Baby BoomersBaby Boomers Generation XGeneration X Generation YGeneration Y

What does our workforce look like?

TraditionalistsTraditionalists

Born:1946 to 1964

75.5 million

Born :1965 to 1980

44 million

Born: After 1981 (to 1994)

76 million

Born:Prior to 1946

45.4 million

(Source: U.S. Bureau of the Census)

The Act vs. The Rewards

Personal Private

Written Verbal

The “How” The “What”

Experiential

Merchandise

Hot, Brand Named Merchandise

Purposeful Choice is Key• A wide assortment

of rewards A points based approach.

• Plus featured rewards that emphasize the message and the program

Gift Cards

Individual Gift Cards

Unique Multi -Merchant Shopping Cards

World Class Online Travel Featuring

Travel

Unique Entertainment & Experiential Options

High End Events

Experiential

Program Management: Centralized Program, Local Flexibility

Formal Annual & Quarterly Recognition

Informal Recognition Weekly/Monthly

Day to Day Thank You

Peer-to- Peer

Managers

Top Performers

Bronze: Manager to associate recognition.

Gold: Annual recognition and reward ceremonySilver: Nomination-based, formal quarterly recognition & celebration

All-associate, low-cost or no-cost recognition.

Important Take Aways

Communicate business decisions and direction; ensure programs are tied to this direction

Grow supervisory skills in developing relationships with employees

Tap into employees concerns; reinforceprogram criteria

Provide growth opportunities and new skills opportunities related to criteria

Reward key behaviors that drive business goals

Appendix

• Stan Striker: V.P. Client Services, Maritz Motivation, St. Louis, Missouri stan.striker@maritz.com

• Book: Dr. Bob Nelson “1001 Ways to Reward Employees”

• White paper: The Benefits of Tangible Non-Monetary Incentives, SITE Foundation

• Website: www.buyrewardsdirect.com