What's Ahead: Employee Recognition: The Missing Link in Integrated Talent Management

This is part of a special advertising section on What's Ahead for HR Leaders.

Friday, April 1, 2011
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Momentum in the entire talent-management category continues to build this year. It's little wonder that more organizations than ever are interested in it. As expert and consultant Josh Bersin points out, when companies develop mature talent-management processes, they actually make more money and their employees deliver higher-quality customer service.

Integration is the buzzword in talent management today as organizations move to unify every aspect of the employee lifecycle, including recruitment, onboarding, performance, succession, learning and compensation. But one crucial supporting element is still missing -- employee recognition. Authentic, organic, peer-to-peer recognition can reinforce behaviors and skills that improve business performance and support talent management in a meaningful way. Consider a few examples:

* Performance management: When an employee hits a performance goal, a manager can recognize him or her for the achievement -- and an employee can recognize a manager for clear direction and support.

* Compensation management: As organizations look for incentive-based compensation to support a total-rewards strategy, spot recognition can encourage desired behaviors and true pay for performance.

* Enterprise learning: As employees complete coursework and master new skills, supervisors and peers can recognize them for jobs well done and encourage them to take on future learning challenges.

The idea that employee recognition fits into the talent-management family of solutions may seem like a quantum leap in thinking about the category, but talent management has already seen drastic changes. Think about how you hired people, reviewed performance, taught new skills and identified the next generation of leaders only 10 years ago. It looks a lot different today.

A lot of things have changed over the past few years. Some have been driven by external factors. Many companies -- even great ones -- were forced to cut benefit costs and lay people off during the Great Recession. Unlike previous downturns, this one was measured in years, not months. And as unemployment went up, so did workloads for remaining employees. As a result, many organizations are nervous and fear a retention crisis as hiring begins to increase and employees have more choices. Adding to these complications for these tarnished employment brands was the explosion in social networking and smartphone ownership. With employees having access to social-networking tools anywhere at any time in the palms of their hands, many organizations are obviously nervous about what employees might say.

In this environment, where employers need to re-engage their people, employee recognition can be one of the most important tools to recruit, retain and inspire talent.

* Recruit: Building an authentic employer brand is directly correlated to recruiting the best talent in the workforce for our organizations. You can invest heavily in antiquated talent-acquisition practices, but the true way to build and spread your employer brand is through your own employees' networks. Social networks are becoming the primary point of interaction between companies and potential employees, and social recognition allows an organization to publicly acknowledge great performance through social networks. It's instant and free brand-building for an organization. By making recognition and your culture visible, there is an opportunity to capture passive candidates who might not work for an organization with a culture like yours.

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* Retain: Recognition and rewards has come a long way from plastic trophies and pen sets. Organizations that practice recognition in five-year increments, using traditional service awards, are spending their budget to actively disengage their workforce. Software-as-a-Service (SaaS) technology allows you to free up your budget to focus entirely on engaging your workforce. It also automates the recognition program with an engaging online platform designed to give frequent performance-based recognition by tying company values to behavior.

What gets recognized gets repeated, and according to Towers Watson research, organizations with a "culture of recognition" have employees who are five times more likely to feel valued, seven times more likely to stay with their companies, and 11 times more likely to be committed to their jobs.

* Inspire: Recognition motivates employees to give their best every day and contribute to the bottom line. Employee engagement is a synonym for inspiration, and inspiring employees gives them a higher meaning in what they do. Recognition is validation; it's the organization telling employees that outstanding performance contributes to the company's success.

Employee recognition as a part of talent management? I know that's a change. But the world is changing. Are you?

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