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Bersin & Associates Unlocks the Secrets of Effective Employee Recognition

New Bersin & Associates Research Shows that Modern Recognition Programs Dramatically Improve Employee Engagement and Reduce Turnover, Yet 87% of Organizations Still Rely on Ineffective Tenure-based Service Level Awards

Oakland, CA – June 12, 2012 - Bersin & Associates, a membership-based company empowering human resources, talent and learning organizations to drive bottom-line impact through world-class research and advisory services, today announced new research that shows companies with recognition programs highly effective at improving employee engagement have 31 percent lower voluntary turnover than their peers with ineffective recognition programs. The findings, which appear in a new research report The State of Employee Recognition in 2012, indicate that recognition plays a much more measureable role in business performance than previously believed.

Summarized in a WhatWorks® market brief titled “Turning Thank You into Performance,” the findings are consistent with recent foundational research on high-impact performance management that is designed to help Bersin & Associates members drive stronger employee and business results. 1 That research found that in organizations where recognition occurs, employee engagement, productivity and customer service are about 14 percent better than in those where recognition does not occur.

Today’s $46 billion market for recognition, with its focus on tenure-based programs, clearly is failing, and is out of sync with modern employment practices,” said Josh Bersin, Chief Executive Officer and President, Bersin & Associates. “This new research highlights a huge opportunity for companies to redirect existing expenditures to programs that significantly influence engagement and retention. The findings also suggest that recognition programs should align with an organization’s comprehensive performance management strategy to drive business results.”

The new recognition research is based on the results of two online surveys of 834 organizations conducted between January and May 2012. It also includes more than 30 research interviews with HR and talent management professionals.

Only 17 percent of employees who participated in the Bersin & Associates study indicated that their organizations’ cultures strongly support recognition. This lack of effectiveness is largely driven by the misdirected nature of most recognition programs: 87 percent of organizations reported that their programs are designed to recognize service or tenure. These programs do not meet the needs of today’s employees, nearly 70 percent of whom report they are recognized annually or not at all.

The research shows that for employees, the most important elements of a recognition program are the ability to receive specific feedback and give recognition easily. This finding is underscored by the fact that the top reason employees do not recognize each other is because there is no established way to provide recognition.

Many companies are responding to this need by leveraging social technologies that enable employees to give and receive positive feedback with others in the network.

“Consistent with the research we produce for our members, this study shows recognition is an important part of an overall performance management approach that regularly reinforces critical employee behaviors and expectations to deliver better employee productivity and business results,” said Stacia Sherman Garr, Principal Analyst, Bersin & Associates, and author of the study. “ As organizations prepare to hire, grow and manage their workforces of tomorrow, it is essential that HR leaders and their teams take the actions necessary to ensure their talent programs remain competitive.”

The study also found that:

  • Three out of four companies have a recognition program, but only 58 percent of employees believe their organizations have these programs. This disconnect indicates that despite the money organizations invest in recognition programs – about 1 percent of payroll – many employees do not even know their programs exist. Many organizations have a huge opportunity to leverage their recognition programs more effectively through – at a minimum – improved communications about the programs in place.
  • Nearly two-thirds of HR respondents indicated HR does not effectively enable recognition. This ineffectiveness is underscored by the fact that nearly half of HR respondents report that the organizations’ culture does not support recognition and the fact that most recognition programs are designed to recognize service or tenure. However, those organizations that recognize employees for “demonstrating company values,” “displaying certain identified behaviors,” and “achieving company goals” are far more effective at enabling recognition than those that do not incorporate these attributes.
  • Senior leaders are out of touch with how often employees are recognized. Nearly 80 percent of senior leaders believe employees are recognized at least on a monthly basis, with 43 percent of senior leaders stating employees are recognized weekly or more often. This finding contrasts starkly with the reports from managers and individual contributors: 40 percent of managers and only 22 percent of individual contributors report that their peers are recognized monthly or more often.

To learn more about Bersin & Associates membership and to download a complimentary WhatWorks® Market Brief on the importance of recognition in performance management, go to: http://marketing.bersin.com/Recognition.html

Register to join Josh Bersin, CEO and President, Bersin & Associates, and Stacia Sherman Garr, Principal Analyst, Performance Management for an online webinar at 1:00 pm ET / 18:00 BST July 19 Employee Recognition: An Untapped Lever of Talent Management

Those interested in learning more about Bersin & Associates and its WhatWorks® membership may also email info@bersin.com or call (510) 251-4400.

For media queries, email laura.evenson@bersin.com or call (415) 465-2711.

About Bersin & Associates

Bersin & Associates is a membership-based company empowering human resources, talent and learning organizations to drive bottom-line impact through world-class research and consulting. Our WhatWorks® research membership gives Fortune 1000 and Global 2000 HR professionals the information and tools they need to produce results for their businesses, based on global best practices.

Members use our insights and tools to design and implement best practice solutions, benchmark against others, and select and implement systems. A piece of Bersin & Associates research is downloaded every minute during the business day. More than 5,000 organizations worldwide use our research and consulting to guide their HR, talent and learning strategies.

[1] 2011 High-Impact Performance Management survey. See “High-Impact Performance Management: Maximizing Performance Coaching,” Bersin & Associates / Stacia Sherman Garr, November 2011.