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Featuring research from
Improve Engagement With Recognition.
Welcome
Research from Gartner: Social Employee Recognition Systems
Reward the Business With Results
About Achievers
1
2
10
Triumph Over Disengagement
2
Welcome
Today, 70 percent of North American employees
feel indifferent or disengaged at work, costing
the U.S. economy nearly $500 billion every year
in lost productivity, substandard performance,
and employee turnover. Globally pervasive trends
have completely changed the way employees
work and are motivated. Employers that don’t
adapt are likely to fall victim to the same loss in
productivity.
These are some of the most dramatic trends in the
modern workforce:
• Millennials entering the workforce with higher
expectations of their work lives
• Flattening of traditional hierarchical
organizational structures
• Employee skills shortage
• Mobile, dispersed employees who work
remotely – from just about anywhere
In the article that follows, you’ll find that Gartner
offers valuable insight on how you can build and
maintain a competitive advantage through your
workforce by keeping them engaged, aligned,
and recognized. It’s more important than ever
that companies not only recruit, but retain top
talent to grow the businesses of the future. If
employees are not engaged in the business, they
will leave--especially the A-players. An employee
success platform that is designed for today’s
modern workplace can engage and, yes, empower
employees, improving employee performance and
driving business success.
I hope you’ll find this article helpful as you plan
for and implement an employee success platform
that’s right for your enterprise.
Sincerely,
Patrick D. Quirk
President and Chief Executive Officer
Achievers
3
Research from Gartner
Social Employee Recognition Systems Reward the
Business With Results
Analysis
Employee recognition and reward programs
have a long history within the human capital
management (HCM) industry. From the crystal
clocks and gold watches awarded at service
date milestones to recognition programs that
reward employees for exemplary performance or
innovative ideas, organizations have established
a variety of programs aimed at recognizing and
rewarding desired workforce behaviors. With the
consumerization of technology, many current
enterprise reward programs also include concepts
derived from hotel and airline loyalty programs,
rewarding points to individuals for certain actions
and behaviors that can be accumulated on a
reward card and redeemed for merchandise or
services as desired by the recipient.
The latest transformation in employee recognition
programs has come through the use of social
networking, mobile accessibility and gamification,
delivered through SaaS applications. As social
employee recognition surfaces within HR
applications, employee recognition has taken
on more structure, often aligned with formal
performance review processes, but more often
is purposefully designed to drive recognition,
engagement and alignment.
Such programs, when designed properly, can
transform traditional siloed programs into a
comprehensive strategy for engaging and inspiring
employees. They augment traditional reward
processes with informal recognition and feedback
delivered via social networking tools, making
it easy for employees to recognize each other
publicly. Some applications provide automatic
integration to internal performance reviews, while
others take recognition beyond the enterprise,
allowing posts to external social media sites
such as Facebook. With many of the latest social
recognition systems, recognition activity may be
stored in the employees’ file to augment their
internal reputation, thus leveraging extrinsic
rewards to reinforce intrinsic motivations.
The fundamental shift driving these new
social reward and recognition programs is the
acknowledgment that regular recognition and
HR and business leaders worldwide are benefiting
from migrating traditional employee reward and
recognition programs to a new generation of
social-enabled technologies that support pay-for-
performance strategies and help align recognition and
reward initiatives with company brand and culture.
Impacts
• HR and business leaders utilizing social
recognition and reward systems report
significant improvement in employee
engagement and business outcomes.
• The use of social and gamification concepts
by HR, IT and business leaders is transforming
reward programs with accelerated adoption and
sustained results, but inherent risks must be
effectively monitored and managed.
• Social recognition and reward concepts
enable HR leaders to re-evaluate traditional
approaches to performance management,
employee referrals and other talent
management systems.
Recommendations
• Capture baseline metrics across critical
employee, customer and business performance
measures, and continually monitor for impact
and improvement.
• Evaluate the organization’s cultural readiness, and
plan for the impacts of increased transparency
resulting from social technology deployment.
• Plan for and monitor the risks inherent in
social-communications-based programs, and
adopt an agile approach for risk mitigation.
• Look for design flexibility to meet different
organizational objectives, including the ability to
align all recognition programs — incentive, spot,
milestone and others — under a unified program.
Strategic Planning Assumption
Social reward and recognition systems will see a
25% year-over-year increase in adoption rate from
a base of 3% to 5% today, and will reach the early
mainstream phase by 2016.
4
feedback drive employee engagement and
employee success, which in turn propels customer
success and improved business outcomes (see
Figure 1). As a result, the market for social
recognition and reward systems is a rapidly
growing technology category (see “Hype Cycle for
Human Capital Management Software, 2013”).
Implemented as stand-alone programs, social
reward and recognition programs deliver significant
business value, as measured by performance across
employee engagement, employee success, and
customer and business success. As organizations
explore opportunities to leverage the benefits from
these programs into other talent management
processes (such as performance, recruiting
and onboarding), new benefits and process
transformations surface to drive even greater
business impact. There are, however, inherent
risks to programs that incorporate gamification
and social concepts, and organizations must plan
accordingly and continuously monitor and adjust
program components as necessary. Figure 2 lists
the top impacts of social employee reward and
recognition systems, and recommendations how
HR and IT leaders can deal with them.
Impacts and Recommendations
HR and business leaders utilizing social
employee recognition and reward
systems report significant improvement
in employee engagement and business
outcomes
Employee recognition programs — initiatives
centered on rewarding employees for service
longevity, retirement, achievement, outstanding
performance, suggestions/ideas, wellness
milestones and other motivated behaviors — are
almost ubiquitous, with 88% of U.S. organizations
supporting an average of four types of recognition
programs.1
The most common forms of recognition
awards have traditionally included gifts of money,
merchandise, gift cards, plaques and certificates.
The costs of such programs are not insignificant.
Organizations spend as much as 2% of payroll
on recognition programs, much of it focused on
programs that reward tenure. It is, therefore, no
surprise that more than one-third of organizations
report that these programs have little to no
effect on employee engagement, motivation
and satisfaction.2
There are several fundamental
design flaws in these traditional approaches that
can thwart getting full value from recognition
investments, including:
Source: Gartner (December 2013)
FIGURE 1 The Engagement-to-Outcomes Value Chain
5
Source: Gartner (December 2013)
• Recognition events are infrequent and often
have limited visibility beyond the employee’s
immediate manager, department or business unit.
• Rewarding longevity can have the negative
effect of celebrating long-term employees
even if performance is subpar, and can send
the message that longevity is valued over
creativity, service and other corporate values.
• Monetary rewards are functional, but are soon
forgotten after being spent. Gift cards provide
flexibility in award choice, but still may be
of less value to some than a spontaneous
gesture of appreciation from an esteemed
colleague, a team celebration or another
nonmonetary award. Rewards focus on
recognizing extrinsically motivated behavior,
not sustainable, intrinsic motivations.
New approaches in rewards and recognition
have emerged during the past five years that
take advantage of the Nexus of Forces — social,
mobile, information and cloud delivery — to make
recognition visible, sustainable and continuous
across the enterprise. Some vendor solutions focus
purely on recognition and reputation management
to foster engagement and performance, often
including gamification components, such as badges,
likes, points and other features, to reinforce desired
behaviors. Others also include the administration
of actual reward programs for items including
compensation, time off, services, gifts or gift
cards, redeemable points, and other perks. When
evaluating vendor solutions, buyers should look
for technologies that incorporate a high degree of
personalization, reflecting individuals’ personal
preferences in communications and awards.
FIGURE 2 Impacts and Top Recommendations for Social Employee Reward and Recognition Systems
6
Taking a social approach to reward and recognition
programs drives significant advantages over
traditional models by amplifying the reach
of recognition events, increasing program
participation, improving intrinsic motivation and
sustaining workforce engagement. The emphasis
on employee engagement is critical, because the
relationship between engagement and business
performance has been well-documented (see “CFO
Advisory: Employee Engagement Impacts Financial
Outcomes and Business Risk”). In its February
2013 meta-analysis spanning 263 research studies
and over 1.3 million employees, Gallup found
that companies in the top quartile of employee
engagement, as compared with those in the
bottom-quartile, exhibited:
• 21% higher productivity
• 22% higher profitability
• 41% higher quality
• 48% fewer safety incidents
• 37% reduced absenteeism
Gallup’s research also found that organizations
scoring in the top half of employee engagement
rankings nearly doubled their odds for success,
compared with organizations scoring in the
bottom half of workforce engagement scores.
These findings are demonstrated across many
clients implementing social recognition and
reward programs:
• One of the largest credit unions in Canada
had a long-established employee recognition
system based on periodic service awards, ad
hoc recognition of employee achievements
and quarterly outstanding employee
awards. Despite its longevity, it failed to
reinforce company values. The organization
implemented a social platform to manage
recognition and rewards in a combined
offering, and immediately achieved 98%
employee participation — a level it has
sustained for more than three years. It has
measured a significant boost in employee
engagement scores, improved retention
levels, higher customer satisfaction and
3.5% improved brand awareness. It also
found a correlation between low employee
performance and low program participation,
signaling managers to act proactively if
participation levels drop.
• An international hotel chain consolidated
its many different reward programs under
a centralized, global, SaaS-based social
recognition program, with a focus on promoting
instant, daily recognition coupled with tangible
rewards. The results were significantly higher
employee engagement scores, reduced
turnover, higher customer engagement levels
and improved revenue for the hotel chain.
• Following several acquisitions, a leading high-
tech provider launched a social recognition
platform across 50 countries to consolidate its
many acquired cultures. Within four months,
it had doubled its recognition program
participation. The organization increased
employee engagement by 14% in less than one
year, and enabled cross-functional peer-to-peer
recognition across the globe.
Conversely, disengaged employees undermine
morale, erode the bottom line and endanger the
long-term success of the business. According to
a Towers Watson study of 50 companies over a
one-year period, organizations with low levels of
engagement saw operating income drop more than
32% and earnings per share (EPS) decline 11%
(compared to 28% growth in EPS within high-
engagement companies).3
Authentic recognition and appreciation are proven
aspects of motivation. The U.S. Department of
Labor reports 64% of working Americans leave
their jobs because they do not feel appreciated.
According to Richard Florida in “The Rise of the
Creative Class,” modern workers are motivated
significantly by peer recognition. A 2010 Gallup
report revealed that almost 80% of employees
said recognition is a strong motivator of work
performance, and 70% said they would work harder
with ongoing recognition. Organizations should
take baseline measures of key metrics — including
employee engagement, turnover, absenteeism,
customer engagement and retention — before
launching social recognition programs, and should
continue measuring and monitoring these and
other values postimplementation. Most social
recognition applications provide detailed program
analysis, often making such insights available to
managers and executives via mobile devices and
through interactive dashboards.
Social recognition technologies enable continuous
employee recognition and appreciation, and
amplify their visibility throughout the organization.
However, as discussed in detail below, they
7
are not without elements of risk, including the
potential for false-positive results, quid-pro-quo
interactions and unsustainable participation levels.
Yet, despite these concerns, social recognition
systems represent a high-growth market that
will reach early mainstream adoption by 2016,
where demand for these solutions will be at their
highest and solution proliferation will drive even
greater levels of competition and innovation (see
“IT Market Clock for Human Capital Management
Software, 2013”).
Recommendations:
• Capture baseline metrics across critical
employee, customer and business performance
measures, and continually monitor for impact
and improvement.
• Invest in solutions that enable mobile access
to the recognition platform, as these tools
have a proven effect on increasing program
participation and helping drive improved
business outcomes.4
• Look for social recognition tools that
combine the benefits of intrinsic and extrinsic
motivators. Extrinsic motivators (such as cash,
gift cards, points and other rewards) can be
important reinforcements of intrinsic motivators
(such as achievement, purpose and mastery).
The use of social and gamification
concepts by HR, IT and business leaders
is transforming reward programs with
accelerated adoption and sustained
results, but inherent risks must be
effectively monitored and managed
Modern recognition systems today are social —
making it easy for any employee to recognize
any other employee in the company. Mobile
applications make recognition even easier to give
— and receive — and companies incorporating
mobile accessibility into their recognition
strategies report higher levels of participation.
In these new platforms, public kudos, thanks
and awards are instantly communicated across
social activity streams and visible on dashboards.
As badges are granted, they become persistent
attributes of an employee’s talent profile. Leader
boards are monitored as they dynamically update
with each new recognition event — an active
demonstration of gamification in action.
Gamification concepts are inherent in today’s
social technologies, and are well-suited for
employee recognition programs. Gartner defines
gamification as “the use of game mechanics in
nonentertainment environments to motivate a
change in user behavior.” Used within recognition
and reward programs, gamification is intended to
make these actions more fun and motivating to the
participants. Badges, points and leader boards are
all examples of gamification in social recognition
and reward programs.
Gamification is not without some inherent risks.
For example, you would not want to provide
rewards to employees for being active nominators
of others within the recognition program: a
cascade of inauthentic kudos and overspend on
the budget would ensue. Leader boards (showing
those with the highest number of reward points
and recognition events) can result in quid pro
quo behavior — namely, employees agreeing to
recognize each other to increase their positions on
the board. The focus on accumulating recognition
badges could leave some employees feeling
isolated or frustrated if they have limited exposure
to other people in the organization or if they are
relatively new to the company. To offset these
and other gaming shortcomings, plan designs
often limit the number or value of points that may
be awarded by individuals over a given period. A
reward nomination may first require that a set of
qualifying criteria be met, and approval workflows
further ensure program design adherence.
Reporting and analytics help managers and
administrators regularly monitor these programs
to minimize the unintended consequences
of motivating the wrong behaviors (see “Best
Practices for Harnessing Gamification’s Potential in
the Workforce”).
The concept of social recognition itself has come
under fire. Risks of false positives stem from the
fact that most people will not criticize others in
a public forum. An abundance of kudos and other
recognition events throughout the year may not
correlate with the annual performance review
(although clients interviewed to date have found
the opposite — high activity correlates with high
performance). There may be disproportionately
low participation within some teams, leaving
its members feeling disenfranchised. Mitigation
of such risks requires careful plan design and a
regular review of the program metrics, including
8
participation levels segmented by manager,
division, region, job function and others; trends and
deviations from norms; gaps in participation; and
other critical success indicators.
Cultural readiness is another potential risk an
organization faces when implementing social
recognition programs. Introducing any social
technology into the organization introduces
an element of risk. Gartner predicts that,
through 2015, 80% of social business efforts
will not achieve their intended benefits due
to inadequate leadership and an overemphasis
on technology (see “Predicts 2013: Social
and Collaboration Go Deeper and Wider”).
Ensuring the alignment of executives and
management to the success of these programs
is critical. Without the proper upfront planning,
training, communication and executive
support, launching social-based programs
can actually have a negative effect on
employee engagement and program objectives.
Executive support requires more than budget
and lip service; within social scenarios,
leadership needs to demonstrate active
participation as well.
In fact, a new model of leadership is required in
today’s workplace to achieve and maximize the
effects of social technologies — one that highlights
socially centered leaders. Gartner defines socially
centered leaders as those “characterized by
personal authenticity, community connectedness
and daily expression. They foster the trust of
a committed and self-propelled workforce of
engaged employees.”
When these characteristics are present within
leadership, workforce engagement, talent
attraction and retention, innovation, and other
key performance indicators follow (see “Maverick*
Research: The Socially Centered Leader”).
Without a culture of transparent communication
and socially centered leadership, social reward
and recognition programs will not only fail to
deliver on the promise of improved employee
engagement, retention and performance, but they
also will actually have an adverse impact on these
and other business outcomes.
Recommendations:
• Evaluate the organization’s cultural readiness
and plan for the impacts of new levels of
transparency and immediacy from social
technologies.
• Leverage gamification and social collaboration
concepts to amplify participation and reach of
recognition programs.
• Plan for and monitor the risks inherent in
social-communications-based programs, and
adopt an agile approach for risk mitigation.
Social recognition and reward concepts
enable HR leaders to re-evaluate
traditional approaches to performance
management, employee referrals and
other talent management systems
Informal social feedback and recognition are
taking place most frequently outside of any
formalized integration with talent management
processes. However, Gartner is seeing an
increased impact across other elements of talent
management, resulting from the introduction and
support of informal feedback and socialized reward
programs across enterprises. For example:
• Performance and reward systems: The
annual performance review is not going
away anytime soon, at least within most
organizations, but it is being reshaped by
social recognition and reward programs.
Peer recognition and feedback, provided in a
social context, enable immediate feedback on
employee impact and develop a better baseline
for periodic performance review conversations.
When employees have a regular pulse check of
their actions and contributions from across the
corporate community, performance coaching
ensues and employees have a stronger
connection to the mission, goals and values
of the organization. Rewards granted through
the social recognition program reshape the
employee’s view of their total reward package.
• Succession planning and career
development: Analysis of interactions
across the social recognition platform makes
top performers and influencers visible on a
daily basis. It provides important insights for
managers regarding mentoring and succession
opportunities, and uncovers hidden talent
wherever it exists. Analysis of the social thanks
given to and feedback on individuals may also
serve to informally establish or validate certain
skills and competencies, further supporting
future career and succession initiatives.
• Talent sourcing acquisition: Talent sourcing
and recruiting efforts are bolstered by the use
of social reward and recognition programs. As
9
recognition moments take place every day,
they provide demonstrable examples of the
corporate culture being lived and celebrated
across the globe. Employees themselves
become more vocal brand ambassadors for
companies, improving talent attraction and
hiring initiatives in addition to retention and
other processes.
• Employee referral programs: Innovative
organizations are incorporating recruitment-
based employee referrals within social
recognition programs. In this way, as new
hires enter the organization, the employee is
publicly recognized for the referral (intrinsic
motivation), is granted a monetary reward and
perhaps a badge (extrinsic motivations), and
the event is broadcast across the company via
activity streams, dashboards or other publicly
visible channels.
• Onboarding: Highly acquisitive organizations
benefit from social feedback tools incorporated
into their onboarding processes, where such
transparency in communication is seen as
a critical way to bridge the gap and foster
cultural alignment between existing and newly
acquired staff.
• Talent profiles and reputation management:
Peer feedback and recognition are common
components of enterprise social networking
technologies, but often remain siloed and of
limited use across broader talent initiatives.
When social recognition becomes part of
core talent management technologies, either
directly or through integration, employees are
able to develop their reputations and grow their
internal brands as earned badges, kudos and
feedback become part of the enterprise talent
profile. The richer talent profile data helps
managers better understand the contributions
of their team members while providing a more
complete view of the talent of the organization.
These and other impacts of social recognition and
reward programs on talent management processes
are summarized in Figure 3 below.
Different approaches to social recognition and
rewards may be used at different organizational
levels, in recognition that not one size fits all.
For example, research conducted by the London
School of Economics in 2009 found that pay-for-
performance schemes worked well for motivating
mechanical-based tasks, but actually reduced
FIGURE 3 Social Recognition and Reward Technologies Are Reshaping Traditional Talent Management Processes
Source: Gartner (December 2013)
10
motivation of those performing cognitive-based
tasks. As a result, one organization may choose
to implement a recognition-only based program,
while another will implement a series of programs
internally with components of both rewards and
recognition, varying across different locations
and/or categories of employees. Organizations
evaluating social recognition technologies should
look to solutions that provide flexible design
approaches across different business objectives
and target audiences. Evaluate, also, the capability
to run multiple programs under a consolidated
master budget to better align overall recognition
and incentive spend against organizational goals
and values.
Gartner’s Engagement Initiative is a continuing
program that provides a framework for a strategic
response to consumerization-related workplace
changes (see “Use the Engagement Initiative to
Respond to Critical Challenges in the Workplace”).
A well-designed social employee recognition
and reward program can serve as a foundational
element in the engagement initiative.
Every day, employees make a decision as to whether
they will stay or leave their employer. Every day,
when faced with a crossroads as to whether or not
to put forth discretionary effort, employees will ask
themselves if they feel appreciated and if it’s worth
it. Designed and managed effectively, social reward
and recognition systems can provide the daily
evidence of the impact and appreciation of such
efforts, and serve as an incentive to others to rise to
higher levels of performance.
Recommendations:
• Identify areas within your talent processes
where social recognition and rewards can
augment and reshape traditional programs
suffering from lackluster results. However, be
aware that linkage with performance systems,
even informally, can cause distrust in the
recognition system.
• Look for design flexibility to meet different
organizational objectives, including the ability to
align all recognition programs — incentive, spot,
milestone and others — under a unified program
for the greatest impact and budgetary control.
• Consider including recruitment-based employee
referral programs within the social recognition
program as well. Advantages gained include
a consolidated budget, improved program
visibility through social channels and increased
participation overall.
Evidence
Vendor briefings; end-user client inquiries;
customer interviews.
1
World at Work, “Trends in Employee Recognition,
2013.” Note that 46% of participating
organizations reported that their non-U.S.
employees largely participated in these programs
as well.
2
Ibid.
3
Towers Perrin Global Workforce Study, 2007.
4
Client case study.
Source: Gartner Research, G00255299, Yvette Cameron, 6 December 2013
11
About Achievers
Achievers delivers the only true cloud-based
Employee Success Platform™ that enables
remarkable business success. Designed
specifically to meet the complex needs of today’s
changing, modern workplace, it is the most
engaging software specifically designed to engage,
align and recognize employees. It is software
employees love to use every day in over 110
countries. Learn how your company can change the
world works at www.achievers.com.
Triumph Over Disengagement is published by Achievers. Editorial content supplied by Achievers is independent of Gartner analysis. All Gartner research is used with Gartner’s
permission, and was originally published as part of Gartner’s syndicated research service available to all entitled Gartner clients. © 2013 Gartner, Inc. and/or its affiliates. All
rights reserved. The use of Gartner research in this publication does not indicate Gartner’s endorsement of Achievers’s products and/or strategies. Reproduction or distribution
of this publication in any form without Gartner’s prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable.
Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions expressed herein are subject to change without notice. Although
Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such.
Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner’s Board of Directors
may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or
their managers. For further information on the independence and integrity of Gartner research, see “Guiding Principles on Independence and Objectivity” on its website, http://
www.gartner.com/technology/about/ombudsman/omb_guide2.jsp.

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Triumph Over Disengagement

  • 1. 1 Featuring research from Improve Engagement With Recognition. Welcome Research from Gartner: Social Employee Recognition Systems Reward the Business With Results About Achievers 1 2 10 Triumph Over Disengagement
  • 2. 2 Welcome Today, 70 percent of North American employees feel indifferent or disengaged at work, costing the U.S. economy nearly $500 billion every year in lost productivity, substandard performance, and employee turnover. Globally pervasive trends have completely changed the way employees work and are motivated. Employers that don’t adapt are likely to fall victim to the same loss in productivity. These are some of the most dramatic trends in the modern workforce: • Millennials entering the workforce with higher expectations of their work lives • Flattening of traditional hierarchical organizational structures • Employee skills shortage • Mobile, dispersed employees who work remotely – from just about anywhere In the article that follows, you’ll find that Gartner offers valuable insight on how you can build and maintain a competitive advantage through your workforce by keeping them engaged, aligned, and recognized. It’s more important than ever that companies not only recruit, but retain top talent to grow the businesses of the future. If employees are not engaged in the business, they will leave--especially the A-players. An employee success platform that is designed for today’s modern workplace can engage and, yes, empower employees, improving employee performance and driving business success. I hope you’ll find this article helpful as you plan for and implement an employee success platform that’s right for your enterprise. Sincerely, Patrick D. Quirk President and Chief Executive Officer Achievers
  • 3. 3 Research from Gartner Social Employee Recognition Systems Reward the Business With Results Analysis Employee recognition and reward programs have a long history within the human capital management (HCM) industry. From the crystal clocks and gold watches awarded at service date milestones to recognition programs that reward employees for exemplary performance or innovative ideas, organizations have established a variety of programs aimed at recognizing and rewarding desired workforce behaviors. With the consumerization of technology, many current enterprise reward programs also include concepts derived from hotel and airline loyalty programs, rewarding points to individuals for certain actions and behaviors that can be accumulated on a reward card and redeemed for merchandise or services as desired by the recipient. The latest transformation in employee recognition programs has come through the use of social networking, mobile accessibility and gamification, delivered through SaaS applications. As social employee recognition surfaces within HR applications, employee recognition has taken on more structure, often aligned with formal performance review processes, but more often is purposefully designed to drive recognition, engagement and alignment. Such programs, when designed properly, can transform traditional siloed programs into a comprehensive strategy for engaging and inspiring employees. They augment traditional reward processes with informal recognition and feedback delivered via social networking tools, making it easy for employees to recognize each other publicly. Some applications provide automatic integration to internal performance reviews, while others take recognition beyond the enterprise, allowing posts to external social media sites such as Facebook. With many of the latest social recognition systems, recognition activity may be stored in the employees’ file to augment their internal reputation, thus leveraging extrinsic rewards to reinforce intrinsic motivations. The fundamental shift driving these new social reward and recognition programs is the acknowledgment that regular recognition and HR and business leaders worldwide are benefiting from migrating traditional employee reward and recognition programs to a new generation of social-enabled technologies that support pay-for- performance strategies and help align recognition and reward initiatives with company brand and culture. Impacts • HR and business leaders utilizing social recognition and reward systems report significant improvement in employee engagement and business outcomes. • The use of social and gamification concepts by HR, IT and business leaders is transforming reward programs with accelerated adoption and sustained results, but inherent risks must be effectively monitored and managed. • Social recognition and reward concepts enable HR leaders to re-evaluate traditional approaches to performance management, employee referrals and other talent management systems. Recommendations • Capture baseline metrics across critical employee, customer and business performance measures, and continually monitor for impact and improvement. • Evaluate the organization’s cultural readiness, and plan for the impacts of increased transparency resulting from social technology deployment. • Plan for and monitor the risks inherent in social-communications-based programs, and adopt an agile approach for risk mitigation. • Look for design flexibility to meet different organizational objectives, including the ability to align all recognition programs — incentive, spot, milestone and others — under a unified program. Strategic Planning Assumption Social reward and recognition systems will see a 25% year-over-year increase in adoption rate from a base of 3% to 5% today, and will reach the early mainstream phase by 2016.
  • 4. 4 feedback drive employee engagement and employee success, which in turn propels customer success and improved business outcomes (see Figure 1). As a result, the market for social recognition and reward systems is a rapidly growing technology category (see “Hype Cycle for Human Capital Management Software, 2013”). Implemented as stand-alone programs, social reward and recognition programs deliver significant business value, as measured by performance across employee engagement, employee success, and customer and business success. As organizations explore opportunities to leverage the benefits from these programs into other talent management processes (such as performance, recruiting and onboarding), new benefits and process transformations surface to drive even greater business impact. There are, however, inherent risks to programs that incorporate gamification and social concepts, and organizations must plan accordingly and continuously monitor and adjust program components as necessary. Figure 2 lists the top impacts of social employee reward and recognition systems, and recommendations how HR and IT leaders can deal with them. Impacts and Recommendations HR and business leaders utilizing social employee recognition and reward systems report significant improvement in employee engagement and business outcomes Employee recognition programs — initiatives centered on rewarding employees for service longevity, retirement, achievement, outstanding performance, suggestions/ideas, wellness milestones and other motivated behaviors — are almost ubiquitous, with 88% of U.S. organizations supporting an average of four types of recognition programs.1 The most common forms of recognition awards have traditionally included gifts of money, merchandise, gift cards, plaques and certificates. The costs of such programs are not insignificant. Organizations spend as much as 2% of payroll on recognition programs, much of it focused on programs that reward tenure. It is, therefore, no surprise that more than one-third of organizations report that these programs have little to no effect on employee engagement, motivation and satisfaction.2 There are several fundamental design flaws in these traditional approaches that can thwart getting full value from recognition investments, including: Source: Gartner (December 2013) FIGURE 1 The Engagement-to-Outcomes Value Chain
  • 5. 5 Source: Gartner (December 2013) • Recognition events are infrequent and often have limited visibility beyond the employee’s immediate manager, department or business unit. • Rewarding longevity can have the negative effect of celebrating long-term employees even if performance is subpar, and can send the message that longevity is valued over creativity, service and other corporate values. • Monetary rewards are functional, but are soon forgotten after being spent. Gift cards provide flexibility in award choice, but still may be of less value to some than a spontaneous gesture of appreciation from an esteemed colleague, a team celebration or another nonmonetary award. Rewards focus on recognizing extrinsically motivated behavior, not sustainable, intrinsic motivations. New approaches in rewards and recognition have emerged during the past five years that take advantage of the Nexus of Forces — social, mobile, information and cloud delivery — to make recognition visible, sustainable and continuous across the enterprise. Some vendor solutions focus purely on recognition and reputation management to foster engagement and performance, often including gamification components, such as badges, likes, points and other features, to reinforce desired behaviors. Others also include the administration of actual reward programs for items including compensation, time off, services, gifts or gift cards, redeemable points, and other perks. When evaluating vendor solutions, buyers should look for technologies that incorporate a high degree of personalization, reflecting individuals’ personal preferences in communications and awards. FIGURE 2 Impacts and Top Recommendations for Social Employee Reward and Recognition Systems
  • 6. 6 Taking a social approach to reward and recognition programs drives significant advantages over traditional models by amplifying the reach of recognition events, increasing program participation, improving intrinsic motivation and sustaining workforce engagement. The emphasis on employee engagement is critical, because the relationship between engagement and business performance has been well-documented (see “CFO Advisory: Employee Engagement Impacts Financial Outcomes and Business Risk”). In its February 2013 meta-analysis spanning 263 research studies and over 1.3 million employees, Gallup found that companies in the top quartile of employee engagement, as compared with those in the bottom-quartile, exhibited: • 21% higher productivity • 22% higher profitability • 41% higher quality • 48% fewer safety incidents • 37% reduced absenteeism Gallup’s research also found that organizations scoring in the top half of employee engagement rankings nearly doubled their odds for success, compared with organizations scoring in the bottom half of workforce engagement scores. These findings are demonstrated across many clients implementing social recognition and reward programs: • One of the largest credit unions in Canada had a long-established employee recognition system based on periodic service awards, ad hoc recognition of employee achievements and quarterly outstanding employee awards. Despite its longevity, it failed to reinforce company values. The organization implemented a social platform to manage recognition and rewards in a combined offering, and immediately achieved 98% employee participation — a level it has sustained for more than three years. It has measured a significant boost in employee engagement scores, improved retention levels, higher customer satisfaction and 3.5% improved brand awareness. It also found a correlation between low employee performance and low program participation, signaling managers to act proactively if participation levels drop. • An international hotel chain consolidated its many different reward programs under a centralized, global, SaaS-based social recognition program, with a focus on promoting instant, daily recognition coupled with tangible rewards. The results were significantly higher employee engagement scores, reduced turnover, higher customer engagement levels and improved revenue for the hotel chain. • Following several acquisitions, a leading high- tech provider launched a social recognition platform across 50 countries to consolidate its many acquired cultures. Within four months, it had doubled its recognition program participation. The organization increased employee engagement by 14% in less than one year, and enabled cross-functional peer-to-peer recognition across the globe. Conversely, disengaged employees undermine morale, erode the bottom line and endanger the long-term success of the business. According to a Towers Watson study of 50 companies over a one-year period, organizations with low levels of engagement saw operating income drop more than 32% and earnings per share (EPS) decline 11% (compared to 28% growth in EPS within high- engagement companies).3 Authentic recognition and appreciation are proven aspects of motivation. The U.S. Department of Labor reports 64% of working Americans leave their jobs because they do not feel appreciated. According to Richard Florida in “The Rise of the Creative Class,” modern workers are motivated significantly by peer recognition. A 2010 Gallup report revealed that almost 80% of employees said recognition is a strong motivator of work performance, and 70% said they would work harder with ongoing recognition. Organizations should take baseline measures of key metrics — including employee engagement, turnover, absenteeism, customer engagement and retention — before launching social recognition programs, and should continue measuring and monitoring these and other values postimplementation. Most social recognition applications provide detailed program analysis, often making such insights available to managers and executives via mobile devices and through interactive dashboards. Social recognition technologies enable continuous employee recognition and appreciation, and amplify their visibility throughout the organization. However, as discussed in detail below, they
  • 7. 7 are not without elements of risk, including the potential for false-positive results, quid-pro-quo interactions and unsustainable participation levels. Yet, despite these concerns, social recognition systems represent a high-growth market that will reach early mainstream adoption by 2016, where demand for these solutions will be at their highest and solution proliferation will drive even greater levels of competition and innovation (see “IT Market Clock for Human Capital Management Software, 2013”). Recommendations: • Capture baseline metrics across critical employee, customer and business performance measures, and continually monitor for impact and improvement. • Invest in solutions that enable mobile access to the recognition platform, as these tools have a proven effect on increasing program participation and helping drive improved business outcomes.4 • Look for social recognition tools that combine the benefits of intrinsic and extrinsic motivators. Extrinsic motivators (such as cash, gift cards, points and other rewards) can be important reinforcements of intrinsic motivators (such as achievement, purpose and mastery). The use of social and gamification concepts by HR, IT and business leaders is transforming reward programs with accelerated adoption and sustained results, but inherent risks must be effectively monitored and managed Modern recognition systems today are social — making it easy for any employee to recognize any other employee in the company. Mobile applications make recognition even easier to give — and receive — and companies incorporating mobile accessibility into their recognition strategies report higher levels of participation. In these new platforms, public kudos, thanks and awards are instantly communicated across social activity streams and visible on dashboards. As badges are granted, they become persistent attributes of an employee’s talent profile. Leader boards are monitored as they dynamically update with each new recognition event — an active demonstration of gamification in action. Gamification concepts are inherent in today’s social technologies, and are well-suited for employee recognition programs. Gartner defines gamification as “the use of game mechanics in nonentertainment environments to motivate a change in user behavior.” Used within recognition and reward programs, gamification is intended to make these actions more fun and motivating to the participants. Badges, points and leader boards are all examples of gamification in social recognition and reward programs. Gamification is not without some inherent risks. For example, you would not want to provide rewards to employees for being active nominators of others within the recognition program: a cascade of inauthentic kudos and overspend on the budget would ensue. Leader boards (showing those with the highest number of reward points and recognition events) can result in quid pro quo behavior — namely, employees agreeing to recognize each other to increase their positions on the board. The focus on accumulating recognition badges could leave some employees feeling isolated or frustrated if they have limited exposure to other people in the organization or if they are relatively new to the company. To offset these and other gaming shortcomings, plan designs often limit the number or value of points that may be awarded by individuals over a given period. A reward nomination may first require that a set of qualifying criteria be met, and approval workflows further ensure program design adherence. Reporting and analytics help managers and administrators regularly monitor these programs to minimize the unintended consequences of motivating the wrong behaviors (see “Best Practices for Harnessing Gamification’s Potential in the Workforce”). The concept of social recognition itself has come under fire. Risks of false positives stem from the fact that most people will not criticize others in a public forum. An abundance of kudos and other recognition events throughout the year may not correlate with the annual performance review (although clients interviewed to date have found the opposite — high activity correlates with high performance). There may be disproportionately low participation within some teams, leaving its members feeling disenfranchised. Mitigation of such risks requires careful plan design and a regular review of the program metrics, including
  • 8. 8 participation levels segmented by manager, division, region, job function and others; trends and deviations from norms; gaps in participation; and other critical success indicators. Cultural readiness is another potential risk an organization faces when implementing social recognition programs. Introducing any social technology into the organization introduces an element of risk. Gartner predicts that, through 2015, 80% of social business efforts will not achieve their intended benefits due to inadequate leadership and an overemphasis on technology (see “Predicts 2013: Social and Collaboration Go Deeper and Wider”). Ensuring the alignment of executives and management to the success of these programs is critical. Without the proper upfront planning, training, communication and executive support, launching social-based programs can actually have a negative effect on employee engagement and program objectives. Executive support requires more than budget and lip service; within social scenarios, leadership needs to demonstrate active participation as well. In fact, a new model of leadership is required in today’s workplace to achieve and maximize the effects of social technologies — one that highlights socially centered leaders. Gartner defines socially centered leaders as those “characterized by personal authenticity, community connectedness and daily expression. They foster the trust of a committed and self-propelled workforce of engaged employees.” When these characteristics are present within leadership, workforce engagement, talent attraction and retention, innovation, and other key performance indicators follow (see “Maverick* Research: The Socially Centered Leader”). Without a culture of transparent communication and socially centered leadership, social reward and recognition programs will not only fail to deliver on the promise of improved employee engagement, retention and performance, but they also will actually have an adverse impact on these and other business outcomes. Recommendations: • Evaluate the organization’s cultural readiness and plan for the impacts of new levels of transparency and immediacy from social technologies. • Leverage gamification and social collaboration concepts to amplify participation and reach of recognition programs. • Plan for and monitor the risks inherent in social-communications-based programs, and adopt an agile approach for risk mitigation. Social recognition and reward concepts enable HR leaders to re-evaluate traditional approaches to performance management, employee referrals and other talent management systems Informal social feedback and recognition are taking place most frequently outside of any formalized integration with talent management processes. However, Gartner is seeing an increased impact across other elements of talent management, resulting from the introduction and support of informal feedback and socialized reward programs across enterprises. For example: • Performance and reward systems: The annual performance review is not going away anytime soon, at least within most organizations, but it is being reshaped by social recognition and reward programs. Peer recognition and feedback, provided in a social context, enable immediate feedback on employee impact and develop a better baseline for periodic performance review conversations. When employees have a regular pulse check of their actions and contributions from across the corporate community, performance coaching ensues and employees have a stronger connection to the mission, goals and values of the organization. Rewards granted through the social recognition program reshape the employee’s view of their total reward package. • Succession planning and career development: Analysis of interactions across the social recognition platform makes top performers and influencers visible on a daily basis. It provides important insights for managers regarding mentoring and succession opportunities, and uncovers hidden talent wherever it exists. Analysis of the social thanks given to and feedback on individuals may also serve to informally establish or validate certain skills and competencies, further supporting future career and succession initiatives. • Talent sourcing acquisition: Talent sourcing and recruiting efforts are bolstered by the use of social reward and recognition programs. As
  • 9. 9 recognition moments take place every day, they provide demonstrable examples of the corporate culture being lived and celebrated across the globe. Employees themselves become more vocal brand ambassadors for companies, improving talent attraction and hiring initiatives in addition to retention and other processes. • Employee referral programs: Innovative organizations are incorporating recruitment- based employee referrals within social recognition programs. In this way, as new hires enter the organization, the employee is publicly recognized for the referral (intrinsic motivation), is granted a monetary reward and perhaps a badge (extrinsic motivations), and the event is broadcast across the company via activity streams, dashboards or other publicly visible channels. • Onboarding: Highly acquisitive organizations benefit from social feedback tools incorporated into their onboarding processes, where such transparency in communication is seen as a critical way to bridge the gap and foster cultural alignment between existing and newly acquired staff. • Talent profiles and reputation management: Peer feedback and recognition are common components of enterprise social networking technologies, but often remain siloed and of limited use across broader talent initiatives. When social recognition becomes part of core talent management technologies, either directly or through integration, employees are able to develop their reputations and grow their internal brands as earned badges, kudos and feedback become part of the enterprise talent profile. The richer talent profile data helps managers better understand the contributions of their team members while providing a more complete view of the talent of the organization. These and other impacts of social recognition and reward programs on talent management processes are summarized in Figure 3 below. Different approaches to social recognition and rewards may be used at different organizational levels, in recognition that not one size fits all. For example, research conducted by the London School of Economics in 2009 found that pay-for- performance schemes worked well for motivating mechanical-based tasks, but actually reduced FIGURE 3 Social Recognition and Reward Technologies Are Reshaping Traditional Talent Management Processes Source: Gartner (December 2013)
  • 10. 10 motivation of those performing cognitive-based tasks. As a result, one organization may choose to implement a recognition-only based program, while another will implement a series of programs internally with components of both rewards and recognition, varying across different locations and/or categories of employees. Organizations evaluating social recognition technologies should look to solutions that provide flexible design approaches across different business objectives and target audiences. Evaluate, also, the capability to run multiple programs under a consolidated master budget to better align overall recognition and incentive spend against organizational goals and values. Gartner’s Engagement Initiative is a continuing program that provides a framework for a strategic response to consumerization-related workplace changes (see “Use the Engagement Initiative to Respond to Critical Challenges in the Workplace”). A well-designed social employee recognition and reward program can serve as a foundational element in the engagement initiative. Every day, employees make a decision as to whether they will stay or leave their employer. Every day, when faced with a crossroads as to whether or not to put forth discretionary effort, employees will ask themselves if they feel appreciated and if it’s worth it. Designed and managed effectively, social reward and recognition systems can provide the daily evidence of the impact and appreciation of such efforts, and serve as an incentive to others to rise to higher levels of performance. Recommendations: • Identify areas within your talent processes where social recognition and rewards can augment and reshape traditional programs suffering from lackluster results. However, be aware that linkage with performance systems, even informally, can cause distrust in the recognition system. • Look for design flexibility to meet different organizational objectives, including the ability to align all recognition programs — incentive, spot, milestone and others — under a unified program for the greatest impact and budgetary control. • Consider including recruitment-based employee referral programs within the social recognition program as well. Advantages gained include a consolidated budget, improved program visibility through social channels and increased participation overall. Evidence Vendor briefings; end-user client inquiries; customer interviews. 1 World at Work, “Trends in Employee Recognition, 2013.” Note that 46% of participating organizations reported that their non-U.S. employees largely participated in these programs as well. 2 Ibid. 3 Towers Perrin Global Workforce Study, 2007. 4 Client case study. Source: Gartner Research, G00255299, Yvette Cameron, 6 December 2013
  • 11. 11 About Achievers Achievers delivers the only true cloud-based Employee Success Platform™ that enables remarkable business success. Designed specifically to meet the complex needs of today’s changing, modern workplace, it is the most engaging software specifically designed to engage, align and recognize employees. It is software employees love to use every day in over 110 countries. Learn how your company can change the world works at www.achievers.com. Triumph Over Disengagement is published by Achievers. Editorial content supplied by Achievers is independent of Gartner analysis. All Gartner research is used with Gartner’s permission, and was originally published as part of Gartner’s syndicated research service available to all entitled Gartner clients. © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. The use of Gartner research in this publication does not indicate Gartner’s endorsement of Achievers’s products and/or strategies. Reproduction or distribution of this publication in any form without Gartner’s prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner’s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see “Guiding Principles on Independence and Objectivity” on its website, http:// www.gartner.com/technology/about/ombudsman/omb_guide2.jsp.