The Ascent Group, Inc.

Rewards & Recognition Best Practices

An extract from Reward & Recognition Program Profiles & Best Practices 2009, a research report published by the Ascent Group, Inc.

Engaged Employees are the Key to Excellent Customer Service

Companies in all industries are recognizing the strategic importance of customer satisfaction. A recent survey conducted by Maritz found that 43 percent of customers who stopped doing business with a company made their decision based on poor customer service. In the past, one disgruntled customer could easily tell a number of their friends and associates about a poor service experience. Now, with help of social media tools like YouTube, facebook, and Twitter, one bad customer service experience can go viral within minutes.

Obviously, the customer service employee plays a critical role in customer service success. The customer service employee is the frontline, the point of contact, the face or voice of the company. How they feel about their job and their role in the company will be communicated indirectly through the level of service they are providing customers.

A recent study by Harvard Business School found that every 1 percent increase in staff loyalty resulted in a ½ percent increase in customer loyalty. Additionally, Gallop’s 2006 research to better understand the linkage between employee satisfaction and return on investment (ROI) found that companies with higher levels of employee engagement enjoyed higher ROI.

Engaged employees are employees that feel as though they are truly valued at work; that their efforts directly contribute towards the mission and success of the company; and their job matches their interests and skills. Engaged employees are more productive and less likely to look outside of the company for employment. Engaged employees are the key to excellent customer service. In other words, reward and recognition plays a key role in employee engagement.

Customer service management’s top priority is attracting and engaging top-performing customer service employees. Reward and recognition programs factor greatly in this challenge. Research has found that employees who are satisfied with their company’s reward and recognition program are usually more satisfied with their jobs, more likely to remain with the company, and more likely to recommend their workplace to others. A recent Maritz poll found that 55 percent of employees agree or agree strongly that the quality of their company’s recognition efforts impacts their job performance. At the same time, only 43 percent of employees felt they were consistently recognized for their performance in ways that were meaningful to them.

Employees are motivated in different ways. In order for a program to be truly effective, managers and supervisors have to be able to distinguish what motivates a particular employee and reward accordingly. The key to a well-designed, effective reward and recognition program is employee involvement. At a minimum, management should ask employees, via surveys, focus groups, group meetings, or team involvement, what they value most, in terms of recognition, rewards. The best organizations use a combination of these approaches when designing or refining their programs. This will form a baseline of employee expectations and value. Management can then align rewards with employee expectations to focus employees on behaviors to be rewarded.

Administration and communication also play critical roles in the reward and recognition process. A highly valued set of rewards is worth little without a consistent way to track and recognize superior employee performance. Poor or untimely communication devalues rewards and recognition, because other employees have not been informed or are not sure what was actually done to earn the reward. Recognition is like anything else, it requires time, attention, and a consistent approach. Companies need to make the process of employee recognition as easy as possible for managers, supervisors, and employees.

Recognition and rewards can be formal and informal. Informal recognition, meaning, spontaneous or immediate—simple thank you’s or expressions for a job well done. In fact, most of a company’s recognition activity should be informal. It indicates a culture or atmosphere that acknowledges good behavior when it happens. Informal recognition is a critical component in human nature and the social structure—it’s a major motivator and results in people feeling good about themselves and their achievements. This should be carried over into the workplace, as a sign of respect and acknowledgement. While peer-to-peer recognition is important, supervisor to employee informal recognition is critical to the success of the organization.

Not everyone is good at this. Managers and supervisors should receive the proper training that will develop the skills needed to praise and reward desired behavior and performance.

Recognition is about acknowledgement and appreciation for a contribution, improvement, innovation, or excellence—a message to employees that they are valued. The act of recognizing an employee affirms the values and spirit underlying the achievement. It’s also about reinforcing desired behaviors and increasing their occurrence. Attitude and performance are closely linked; the appropriate recognition at the appropriate moment will create a positive attitude that, in turn, will lead to improved performance. Communicating this to the rest of the organization creates role models and sets the standards of desired performance.

Benchmark Study of Employee and Supervisory Reward & Recognition Programs

With this in mind, Ascent Group conducted research during the fourth quarter of 2009 to better understand reward and recognition programs offered to front-line customer service employees and supervisors.

The main objective of the current study was to identify “best practices” in reward and recognition for frontline customer service employees and supervisors. In particular, focus was given to understanding how customer service organizations of all industries determine, design, and deploy reward and recognition programs to motivate and retain front-line, customer facing employees as well as encourage desired customer service behaviors and attitudes.

Secondary objectives included understanding:

• Reward and recognition programs goals and objectives
• Successful reward and recognition program design approaches
• Techniques to measuring employee and supervisory satisfaction with reward and recognition programs
• Reward and recognition program costs
• Approaches to determining program success and performance
• Technologies that enhance the administration and communication of reward and recognition programs
• Characteristics of best and worst programs
• Other motivating techniques for frontline employees

Participants were asked to share management tactics and strategies, as well as identify any improvement in performance. The study also asked companies to include considerations, successes, and plans moving forward. The result of this effort is captured in this report.

Study Recommendations

Reinforce behaviors and reward results. Recognize the right behaviors and communicate such that the employee’s behavior becomes a model within the work group. Sharing information on expected behaviors and rewards will establish trust. Employees will be able to understand what they need to do to be similarly recognized. Reward these behaviors so other employees are inclined to follow suit. Rewards are a better reinforcement of learning and risk-taking than punishment is for failure.

Our study participants favor peer recognition and performance contests. Peer recognition is preferred by 30 percent of participants while performance contests are favored by 27 percent. Top performer programs and team events figure less prominently.

Be timely, specific, and communicate! Make sure you recognize behavior and reward results in a timely manner so that employees know exactly why they are being recognized. Be specific, clear, and communicate the event so that others will take notice.

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