Tenure Award is Ineffective Recognition Method
As the fluid contemporary workplace changes speedily, attracting and retaining desirable employees become separate entities at extreme ends. Once the right team is hired, employers go an extra mile to spend a tone on employee recognition. Plausibly, ReignCom Inc. is one of the companies that set aside huge part of the annual budget for employee recognition. However, a whole 86 percent of this budget is dedicated to employee tenure recognition. As it is the norm of the company, workers who get to stick around for five years are appreciated through various ways. While it a good practice to recognize employees for working in the business for half a decade, the recognition system has not achieved its full potential in increasing productivity because minimal attention is paid to other forms of employee recognition, which are more effective.
A large body of literature recognizes three major problems that companies face today. One of the problems is voluntary turnover. Various companies are striving for limited employees with the right skills combination to fill the specific roles. While it only seems that market demand for workers has already outstripped supply, the problem could only get worse, and many good employees take advantage of the Talent War (Harvey, 62). Secondly, employee engagement is yet another challenge. A third serious challenge that firms face is succession planning, which only seems to be exasperated by lower retention rates. Surprisingly, these problems have been escalating when companies spend a significant amount of money on employee recognition programs. Definitely, something is not right.
Observably, companies have failed to strategize, appropriately, with regards to acknowledging workers. In most cases, what is considered as employee recognition and reflected in the enterprise practice revolves around length-of-service appreciation. Indeed, it is crucial that employees are recognized for having served in the firm loyally for a considerably long time. According to Neckermann, Cueni, and Frey (205), service awards plays an indispensable role in the overall recognition strategy aimed at driving enterprise success. But this is where HR departments get it wrong.
Companies dedicate excess resources to service awards when the impact on the overall business success is questionable. Research shows that 87 percent of recognition programs are committed to tenure (Bersin). Yet, many researchers have increasingly downplayed the position of service awards, especially the fact that enterprises pay too much attention to it. Precisely, it has not only been noted that length of service awards are the most common type of recognition award, but also contended that they have very little impact on staff motivation (White 108). Additionally, (Bersin) maintained that despite the dedication of large portions of company recognition funds to employee tenure-based reward programs, the impact on organizational performance has been rather dismal.
The dwindling result of service based reward systems can be explained in a number of ways. For instance, recognition should be a regularly done exercise if at all it is meant to enforce a good practice that an employee shows. It is rather disturbing to imagine that an employee would go a whole year, the second year, all through to the fifth to be recognized for having stuck around, with absolutely no reward in between. Another way to look at it is by questioning the logic behind, if at all it is even possible to begin with, an employee staying one extra year in a company only to earn a five-year pin.
Another factor that makes service award rather ineffective is that they are sometimes offered inappropriately. As it was the case in the last award exercise held, six employees marked their fifth year of service at ReignCom Inc. They were then accorded their similar, respective awards as a group, and the effect was rather questionable, especially after two of them quit voluntarily soon after. The unusual aftermath of the reward exercise can only be explained in two ways. Research findings indicate that “combination of group-based, generic, impersonal awards leads recipients to feel the recognition is more for show than genuine appreciation for them individually” (White 108). Instead of motivating the employees, the service award perhaps only instigated feelings of cynicism, apathy, sarcasm, alongside other undesirables.
Secondly, when it comes to an award system, there is no one-size-fits-all approach. Service recognition awards could mean a lot in the recognition strategy of a company but applying it to all individuals year after year may produce far more undesirable results. One type of reward program can have different effect on different employees, which in turn affects the goals they set and the overall success of the company (Presslee, Vance, and Webb 1805). The worrying side of the multifaceted impact is that the recognition may not make the staff feel appreciated at all since there is no guarantee that all workers feel valued or encouraged in the same way (White 108). If same tenure reward is more of a routine, employees get used to expecting the recycling of the old monotonous company practice.
The serious flaws of the employee tenure recognition demand that an effective reward system be developed. It is pertinent to mention that the firm has not entirely dedicated its reward programs to service recognition. The little portion of the money set aside each year goes to other forms of appreciations. Nonetheless, other than arguing that the enterprise relocates a huge chunk of these funds to other reward activities, the essay considers possible alternatives the company could employ in recognizing its staff.
Incontrovertibly, there is need to implement a modern, re-engineered recognition program. A well-structured recognition strategy has been associated with a reduction in voluntary turnover alongside improved engagement, safety, wellness, other company aspects that contribute to the overall business success (Johnson 6; Neckermann, Cueni, and Frey 205; Gubler, Larkin, and Pierce 286). Nevertheless, for the recognition to elicit optimal power to rekindle employee interest and desire to achieve, it has to occur at an individual level, one-on-one (Nelson 28), and most importantly, when an employee reaches a milestone.
The company can revamp its reward strategy through many effective, best practices for employee recognition. One of them is by making recognition easy and frequent whereby a budget can be set for employees to appreciate others, with for their significant efforts. Also, it can be achieved by recognizing individuals on the basis of specific outcomes and behaviors. Instead of just rewarding an employee for being around for five years, an employee of the month can be identified and rewarded for, say, having solved an intricate customer complaint in the most outstanding way. Secondly, the company can replace its top-down recognition with a peer-to-peer recognition which has been shown to have a higher impact (Bersin). Importantly, it is important that all forms of recognition are tied to and enforce the company values.
It is also worth noting that non-monetary ways can equally be used to recognize employees. Sometimes money is not enough to rejuvenate the enthusiasm needed to keep employees working efficiently. Popping in spontaneously with a member of the C-suite or another high-level executive for the sole purpose of thanking the worker in person for his excellent work that helped the firm win a contract can have a huge impact. This method has one special aspect in that it makes an employee feel more attached to the company because the top level executives feel and appreciate his contribution.
In conclusion, employee recognition is an essential tool that is too valuable to leave unimproved in the increasingly competitive corporate environment. Companies are ravenous for talented employees, and the talent war is brimming each day. If a firm solely relies on recognizing workers only on the basis of service tenure, then it risks failing to optimize on employee capabilities and this may affect the retention rate. Accordingly, it is of importance that the business reengineers its recognition strategy by aligning them to the company mission. Lastly, the culture of recognizing employees should be widespread and a regularly practiced in the organization and target enforcing specific results that people achieve.
Bersin, Josh. “New research unlocks the secret of employee recognition.” Forbes, Forbes, 13 June 2012, www.forbes.com/sites/joshbersin/2012/06/13/new-research-unlocks-the-secret-of-employee-recognition/#35523ecc5276. Accessed 29 Apr. 2017.
Gubler, Timothy, Ian Larkin, and Lamar Pierce. “Motivational spillovers from awards: Crowding out in a multitasking environment.” Organization Science 27.2 (2016): 286-303.
Harvey, S., William. “Winning the global talent war: A policy perspective.” Journal of Chinese Human Resource Management 5.1 (2014): 62-74.
Johnson, Larry, et al. The NMC Horizon Report: 2015 Museum Edition. New Media Consortium. 6101 West Courtyard Drive Building One Suite 100, Austin, TX 78730, 2015.
Neckermann, Susanne, Reto Cueni, and Bruno S. Frey. “Awards at work.” Labour Economics 31 (2014): 205-217.
Nelson, Bob. 1501 ways to reward employees. Workman Publishing, 2012.
Presslee, Adam, Thomas W. Vance, and R. Alan Webb. “The effects of reward type on employee goal setting, goal commitment, and performance.” The Accounting Review 88.5 (2013): 1805-1831.
White, Paul. “Improving staff morale through authentic appreciation.” Development and Learning in Organizations: An International Journal 28.5 (2014): 17-20.