Feature Article - September/October 2016

Trending Up, 2016

The Stunning Post-Recession Rise of the Reward & Recognition Industry

By Rick Dandes

Understanding Program Design and Planning

Melissa Van Dyke is right, noted Mike Ryan, senior vice president, Client Strategy, Madison Performance, New York. Things have changed. As a trend, "The generational strategy is something that just about every organization is focused on these days, and it will continue," he said. "What is important for companies to understand is there certainly are differences in what different generations expect when it comes to being recognized and when it comes to the perception of opportunity within the organization. Many people are focused on younger workers, as they should be. They are rapidly becoming the majority of the workforce."

What's interesting about younger workers, however, is they like to be recognized more often than older employees. "We all suspected that," Ryan said. "One of the reasons is not that they are insecure; it's that they have a definitive need to know that they are on the right path, in terms of where they wanted to be. Many organizations are reinventing their programs that are normally designed to reward for service longevity. They are keeping them for older employees that have already eclipsed the five-, 10-, 15-year barriers, and there is good reason for that. Those employees are outstanding role models and illustrate what success looks like over time, but for younger employees they are creating programs that provide more ongoing feedback in terms of relevant skills, new certification and new skills being acquired."

It's important to have many different disciplines within organizations. Call this trend horizontal leadership, which basically means that you can step in as an individual and provide leadership, even when you are not technically in charge. That is important because when employees work on ad hoc project groups or they work across different disciplines trying to solve a problem, it is important for people to step up, Ryan said.

"Millennials not only want those types of opportunities to be heard and to be influential, but they seize them. And they know that leadership isn't just about being in charge, it's about charging up others," he added. "Those are some of the things organizations are sensitive to, and some things that organizations are planning for when it comes to structuring their recognition programs."

Then there is the issue of talent poaching, Ryan said. "You see it in a lot of key industries—especially in technical, but it is really rampant in every industry that needs a good portion of the best talent-driven professionals out there. Companies won't say they have talent poaching strategies, but with tools that are available in the marketplace today, such as social networking sites, it is easy to recruit via the internet.

"When you look at what companies are doing to prevent their best from being poached, they are making sure they have social recognition tools in place, where employees who are positive apostles of the organizations are able to speak internally with other employees. They are able to give recognition, they are able to do good work. They are able to chime in when others have gotten rewards. They're trying to raise the bar on the culture of appreciation within the company. The object is to keep it an environment where people don't feel that they are being ignored, or don't know how their contributions contribute to the organization's efforts. Therefore, they don't feel restless and are not susceptible to poaching."

Inside the C-suite, executives know that recognition is a viable part of the compensation, but there is a trend now that has marketing and HR partnering on what marketing needs to get out of recognition. "They need to improve their brand's authenticity in the marketplace," Ryan said. "They need to improve customer satisfaction scores—positive word-of-mouth. The pivot point on all that is people."