CULTURE ACOMPETITIVE AS DIFFERENTIATOR RECOGNITION REPORT 2015 EMPLOYEE SHRM/GloboforceFrom the Survey

RESEARCH REPORT EXECUTIVE SUMMARY that best-in-class culture is predicated on recognition and appreciation. appreciation. and recognition on predicated is culture best-in-class that bottom line business results. And for more companies than ever before, can engage, nurture, and employees attract and ultimately, increase culture right the cultivating how first-hand They’re seeing differentiator. More than ever, companies are focusing on culture as acompetitive results are they experiencing. We looked in particular at these questions: companies from employee reward anniversary expect and service programs, and what This 2015 examines in practices best employee report recognition, unpacking what their top challenges workforce and strategies to help address them. Resource Management to elicit trends and insight from HR and leaders about practitioners Globoforce * * * *  What is themilestone impact of service programs? recognition programs? What aretheresultscompaniesexperiencingfromvalues-based service programs? What arethemostcommonpracticesaroundrecognitionandyearsof What arethetopissuesfacingHRleadershiptoday?  ® conducts an conducts annual in survey collaboration for Human with the Society

2015 Employee Recognition Report // 2 2015 Employee Recognition Report // 2 OUR FINDINGS WERE FINDINGSOUR WERE 6.  6.  5.  4.  3. 2.  1. The topThe three challenges by faced HR organizations today are turnover, employee engagement, and succession planning. many programs still of the mark fall for short inspiration and quality. topThe for years objective programs of service is employee appreciation, but culture and more human workplace. Values-based recognition programs are helping employers create a stronger bottom-line organizational metrics. metrics. organizational bottom-line Values-based employee recognition is as seen significantly contributing to programs experience better results.programs better experience Organizations that invest in employee recognition and years of service recognition programs. Few companies have chosen to adopt gamification and eThanks in their

2015 Employee Recognition Report // 3 1 /1 retention, recruitment and succession are rising tides in the organizational mind. steps to ensure don’t they lose valuable employees in the company year. This is likely why cautious employees may jump back into an job active search. Companies will to take need A strengthening job market means that more jobs are being filled, and many previously hires. than openings job more reported was that for the first time tracking ever employers sinceopeningsstarted the in BLS 2000, most in 15 years. weremillionThere also 5.0 hires in April, near recent highs. Most telling to U.S. Bureau million Statistics, of Labor job there were openings 5.4 in April 2015, the This broadereconomic likely strengthening reflects news of a jobAccording market. recruitment has also number four risen—to on the list. both. them overtaken This is perhaps asign of the growing about war as foranxiety talent, top three challenges listed, it seems that growing concerns about turnover have finally succession planning toppedthe list of HR concerns. While are they still some of the In 2013 and in 2012, asked we when this same question, employee engagement and employee engagement and succession planning. The top three challenges faced by HR organizations today are turnover,

2015 Employee Recognition Report // 4 2015 Employee Recognition Report // 4 about finding replacement talent.) talent.) replacement finding about arestressed 29 percent (Another concern. asatop loss of personnel arereporting ofcompanies percent 40 felt. to be is beginning shortage this talent that means likely boomers, baby ofmore retirement the and fluctuation population with combined trades. Lower unemployment rates, manufacturing skilled and technology in true supply—especially outstrip will labor skilled for demand when acoming War Talent, for predicting have been analysts For years, TURNOVER Employee enablement-pr Relieving employeefrustration Employee r TOP ORGANIZATIONAL CHALLENGES CITED BY HR PROFESSIONALS FIGURE 1 Performance management Q: What are the most important challenges you currently face in your organization? your in face currently you challenges important most the are Q: What Employee engagement available in 2013. Only organizations with an employee recognition and service anniversary program were asked this question. this asked were program anniversary service and recognition employee an with not was option organizations Only response this 2013. in available indicates (*) asterisk An options. response multiple to due 100% equal not do Percentages Note: Employee satisfaction *Employee happiness Cultur Succession planning etention/turnover Revenue perFTE *Employer brand e management Recruitment Pr oductivity oviding Other point drop from our last survey (in (in survey last our from drop point an 8percentage was there survey year’s However, in this HR challenges. for list ofthe top in arow, the near survey third the for is, engagement Employee levels. levels. manage engagement and proactively measure more effectively practitioners HR to help programs, recognition and surveys as pulse such tools, and ofresources availability greater of the is reflective likely—it more perhaps Gallup.) by Or— recently most employee engagement (as reported U.S. in overall growth to incremental in 2013.) due may be percent This 39 engagement as a top concern, versus chose ofrespondents 472015, percent EMPLOYEE ENGAGEMENT 4% 4% 7% 9% 9% 10% 10% 11% 12% 14% 18% 18% 19% 22% 22% 24% 26% within their organizations. key influencers andfuture leaders employees, potential high to identify ways better for arelooking HR leaders within. from talent train and promote to efforts to redouble companies many leads therefore leadership future and talent skilled to retain desire ofturnover. The driver leading is a ofdevelopment lack have shown studies many rates—as retention lower by brought pressures may reveal This HR asatop planning challenge. survey respondents cited succession of the percent) a third (35 than More SUCCESSION PLANNING SUCCESSION 29% 31% 2013 2015 33% 35% 35% 39% 39% 40% 47%

2015 Employee Recognition Report // 5 2 / 2 percent in 2012. the number of companies basing that recognition on values rose to percent from 58 50 This year’s also survey saw 81 percent of companies practicing formal recognition, but recognition. values-based practicing In 2013, that number rose to 81 percent of companies, with 55 percent of companies percent) of all recognition programs were tiedto company values. employees) to 24,999 (500 to have an employee recognition program. (50 One-half organizations or more employees) (25,000 were more likely than mid-sized organizations In 2012, 76 percent of companies having reported recognition programs. Large good. or while more companies with values-based recognition rated their programs as excellent recognition programs that are not tiedto values are expectations, underperforming aligned to company values compared when with 2012. Moreover, companies with Globoforce Employee Recognition found Survey an uptick in the number of programs While the number of recognition programs remained strong, this 2015 SHRM/ and even cost control goals. their recognition programs on engagement, retention, safety, wellness, employer brand according to HR and leaders respondents practitioners. Survey cite positive impact of driving keymetrics, recognition—is values-based in particular Recognition—and to bottom-line organizational metrics. metrics. organizational bottom-line to Values-based employee recognition is seen as significantly contributing

2015 Employee Recognition Report // 6 2015 Employee Recognition Report // 6 not tiedtoouror PERFORMANCE RECOGNITION OF PROGRAMS FIGURE 3 RECOGNITION OF PROGRAMS ADOPTION FIGURE 2 Y Q: Overall, how would you rate your organization’s current employee recognition efforts? recognition employee current organization’s your rate you would how Q: Overall, program? recognition employee an have organization your Q: Does es, wehaveapr Y es, wehaveapr Excellent No, butweplantoimplement to ouror Good Poor one inthenext12months Fair ganization’ ganization’ ogram thatistied ogram, butitis 5% s values s values 14% No 27% 5% 14% 22% 54% 58%

2015 Employee Recognition Report // 7 with non-values-based recognition. non-values-based with program is helping build them astronger only employer 28percent of those brand—vs. brand. A full 66 percent of companies with values-based recognition said their recognition Values-based recognition is also proving toinbuilding abenefit be a magneticemployer (29goals percent.) percent),(37 sustainability or cost-control goals percent), (36 and health and wellness recognition programs were also more likely to have perceived positive on impacts safety perceived a positive vs. impact, 41 percent for non-values-based programs. Values-based based programs.percent of values-based Retention programs was likewise affected—68 of respondents practicing values-based recognition, vs. just 67 percent for non-values- For example, recognition was perceived to positively impact percent engagement for 90 values. company to results that were up to 20 percent higher than companies not practicing recognition tied were able to show these results. those In programs perceived fact positive reported ofa majority respondents with values-based recognition programs that they reported must that connect investment toline abottom business In this benefit. year’s survey, companiesAs to seek implement and employee justify reward and recognition, they

2015 Employee Recognition Report // 8 2015 Employee Recognition Report // 8 BASED RECOGNITION BASED IMPACT VALUES- OF PERCEIVED STRONG FIGURE 4 Q:  recognition program: does your employee In your professional opinion, opinion, professional your In 68% 37% 90% 36% 66% 29% a values-basedr r say itpositivelyimpacted safety say itpositivelyimpacted values-based r a values-basedr engagement say itpositivelyimpacted contr sustainability orcost- say itpositivelyimpacted a values-basedr vs. 13%withoutavalues-basedr employment brand say ithelpedbuildastr health andwellnessgoals say itpositivelyimpacted without avalues-basedr etention ol goals , vs.23%withouta ecognition pr ecognition pr ecognition pr ecognition pr , vs.41%without , vs.67%without , vs.14%without onger ecognition pr ogram ogram ogram ogram ecognition pr , vs.28% ogram , ogram

2015 Employee Recognition Report // 9 3 / positive goal reinforcement. and development and likely goals—most L&D due to the strong connections between of companies that even recognition feel based on values learning helps meet them that recognition is helpful directly to in them managing actively culture. 31 And percent percent in non-values-based programs. But nearly half of respondents percent) (48 say based recognition to them helped instill and reinforce corporate only values—vs. 42 Perhaps not surprisingly, percent 88 of HR andleaders practitioners say that values- to the workplace, overall (85 percent.) by improvements in employee relationships (84 percent) and in adding more humanity of values-based programs citing an increase in worker happiness. This is closely followed Employee happiness is one of the strongest results from seen recognition, with 86 percent programs tiedto company values. recognition and reward programs. again, And the strongest results come from those in-class cultures, of amajority respondents say are they seeing strong results from their and astrong emphasis on to employee seek they create As development. these best- work culture, predicated on strong relationships, an interest in employee happiness, HR professionals are beginning to tangible see long-term value in building abest-in-class environment. work human company’s help corecreate them and values—can manage ahappier, more meaningful, of our survey, companies are finding that when recognition—particularly linked a to are seeking ways to manage culture and reinforce core values. According to the results place to More work. than ever, culture is akey competitive differentiator, employersand more companies are using recognition as the cornerstone in their strategies to build abest While business help to metrics convince executives to invest in recognition, more and stronger culture and more human workplace. Values-based recognition programs are helping employers create a

2015 Employee Recognition Report // 10 2015 Employee Recognition Report // 10 HUMAN WORKPLACE CREATING MORE A IS RECOGNITION VALUES-BASED FIGURE 5 Q:  recognition program: does your employee In your professional opinion, opinion, professional your In 84% 31% 86% 88% 85% 48% r say itimpr say ithelpsmeet pr without avalues-basedr based r goals and development happiness say itincr corporate values say ithelpsinstillandr r vs. 42%withoutavalues-based a values-basedr ecognition pr pr without avalues-basedr the workplace say itadds cultur say ithelpswith r vs. 20%withoutavalues-based elationships ecognition pr ogram ogram ecognition pr eased employee , vs.11%withoutavalues- oved employee e management humanity in ogram ogram ecognition pr learning , vs.70%without ogram , vs.66% einfor ecognition ecognition , vs.70% ce ogram , ,

2015 Employee Recognition Report // 11 FEW COMPANIESFEW GAMIFICATION USE TECHNIQUES FIGURE 6 Q:  leaderboards, rankings or badges? rankings leaderboards, Does your employee recognition program use use program recognition employee your Does 12% YES 4 / strongly on eThanks in their programs. do not use leaderboards rankings or badges, and 87 percent of companies do not rely strongly on eThanks in their recognition programs. Instead, percent of 88 companies We found that only asmall minorityof companies are using gamification or relying inwidely their programs, or avoid them. andleaders specifically practitioners, inquiring they as whether useto these techniques In wanted we this to gather insight report on these questions of HR from the perspective form of recognition, but eThanks were unsatisfying without agift in this regard. thank you that came with an associated or reward and lasting gift was the most powerful value)or monetary to amemorable be form of recognition. Employees indicated that a harder. Likewise, only in 4% that of report employees found eThanks (award without gift was not motivating recognizing when others, and it did not motivate tothem work and leaderboards, etc.) was apositive addition to recognition. said They gamification as it rewarded the wrong behavior, and they did not believe that gamification(badges recognition. workers gamification Surveyed felt was inappropriate for use in recognition, their views on gamification and the use of eThanks (with no associated reward) in In the Spring 2014 Workforce Tracker, Mood Globoforce U.S. surveyed employees about their recognitiontheir programs. Few companies have chosen to adopt gamification and eThanks in 88% NO badges or rankings leaderboards, U se se FEW COMPANIESFEW RELY STRONGLY ON FIGURE 7 Q:  automated email without an associated reward? associated an without email automated or card electronic eThanks—an on strongly Does your employee recognition program rely rely program recognition employee your Does 87% NO 13% YES on eThanks on strongly Rely e T hanks

2015 Employee Recognition Report // 12 2015 Employee Recognition Report // 12 5 / from managers (21 percent) and from colleagues and work friends (19 percent.) senior (22 leaders percent), quality award choices better (22 percent), more participation percent) was for amore inspiring wishes Other include experience. more participation from How do HR think practitioners YOS improved? can be most The common desire (35 or that are they inconsistent (25 percent) or impersonal (20 percent.) regard to or a poor inadequate percent), award (32 selection percent)a lack of impact (30 mostThe common complaints HR hear practitioners awards about service are with anniversaries. year first celebrating are companies ten years were mostor common. every Interestingly, more than (28 aquarter percent) of seven year anniversaries were less common. Periodic awards five in increments of every (92 percent), years (89 yearspercent.) percent) (88 twenty and twenty-five Two year or mostThe common anniversaries to celebrated are be five percent),years (90 ten years pursuing this as atop objective. Interestingly, of reduction turnover was #9 on the list, with only 45 percent of companies commitment to the organization (69 percent) and to raise engagement levels (68 percent.) ambitions to increase employee satisfaction or happiness (73 percent), emotional renew for YOSobjective programs is to appreciate employees (88percent.) This was followed by retention and loyalty, our responses survey indicate adifferentstory. farBy the top While the prevailing wisdom is that companies implement awards service to drive andgood afull 31 percent rated their program as fair or poor. percent22 of companies having reported an excellent program, 47 percent rated it as percent of companies have they reporting anniversary aservice program. However, only according to results of the 2015 SHRM/Globoforce Employee Recognition Survey, with 74 Years (YOS) of programs service are still in practiced today’s widely organizations, inspiration and quality. quality. and inspiration appreciation, but many programs still fall of short the mark for The top objective for years of service programs is employee

2015 Employee Recognition Report // 13 Renew emotionalcommitmentofemployeeor TOP OBJECTIVES FOR ANNIVERSARY SERVICE TOP PROGRAMS OBJECTIVES FIGURE 9 COMMON ANNIVERSARY SERVICE CELEBRATIONS FIGURE 8 Q:  organization celebrate? Select all that apply. that all Select celebrate? organization Which service anniversary milestones does your your does milestones anniversary service Which Incr Make employeesfeelappr Impr ease employeesatisfaction/happiness Inspir Incr ove or Build employeeconfidence/pride ease trustincompanyleadership Impr e allemployeeswhoparticipate Cr Raise employeeengagement ganizational cultur eate equityandcompliance ove employeere Of Reduce pr Attract jobcandidates fer insightintocultur Reduce turnover eciated/valued ogram costs lationships ganization e/climate Other e 1% 5% 28% 1 8% 13% 23 12% 25% 90% 28% 57 Number ofY 5% Q:  anniversary program to deliver? to program anniversary What would you LIKE your service service LIKE your you would What 92% 40% 10 45% 47% 84% 48% 15 ears 89% 20 55% 88% 25 67% 85% 68% 30 69% 73% 40 73% 62% 50 88%

2015 Employee Recognition Report // 14 2015 Employee Recognition Report // 14 MOST COMMON CONCERNSMOST AND NEGATIVE FEEDBACKFROM EMPLOYEES FIGURE 10 OVERALL RATINGOVERALL CURRENT OF ANNIVERSARY SERVICE PROGRAMS FIGURE 11 Excellent Good Poor Fair Inconsistent experienceamongemployees Not enoughimpactonbusinessr 5% T oo biganadministrativebur 22% Not impactfulforemployees Inadequate r T 26% oo manager ewar T T T oo impersonal oo infr oo expensive -dependent d selection 47% equent *None Other esults den 4% 6% 7% 8% 8% Q:  15% current service anniversary recognition efforts? recognition anniversary service current Overall, how would you rate your organization’s organization’s your rate you would how Overall, 18% 20% 25% Q:  30% 32% feedback you hear from employees about about employees from hear you feedback your service anniversary program? anniversary service your What are the biggest concerns or negative negative or concerns biggest the are What

2015 Employee Recognition Report // 15 RATINGS CURRENT OF ANNIVERSARY SERVICE PROGRAMS FIGURE 12 Q:  Rate your current service anniversary program based on the following criteria. following the on based program anniversary service current your Rate Incr Meets identifiedbusinessgoals Incr eases employeeengagement Makes employeesfeelvalued Employees lovethepr eases employeer Or Contributes positivelyto ganizational leadership or r Pr etur ganizational cultur ovides satisfactory loves thepr n oninvestment etention ogram ogram e 10% 12% 15% 8% 7% 16% 16% 21% Excellent 33% 37% 41% 41% 43% 40% 49% Good 51% 42% Fair 39% 36% 35% 34% 35% 29% 24% Poor 18% 16% 13% 12% 6% 8% 4% 8%

2015 Employee Recognition Report // 16 2015 Employee Recognition Report // 16 WHAT WOULD IMPROVE PROGRAM? SERVICE OF THE YEARS FIGURE 13 Q: Which elements do you think would most improve the effectiveness of your service anniversary program? Select up to 3 options. to 3 up Select program? anniversary service your of effectiveness the improve most would think you do elements Which A mor e lasting,r A mor e inspiringexperienceforemployeestolookforwar A mor Mor e-visitable experiencethatcanbeshar A mor e modernexperience(online,mobile,video,etc.) e participationfr Inclusion ofpastachievementsandsuccesses e emotional,poignantormovingexperience Mor Mor Less re e participationfr Mor Inclusion ofmemoriesandstories Better br e inclusionofpinsandlogowear om colleaguesandworkfriends A lighteradministrativebur e participationfr Better qualityawar liance onpinsandlogowear A biggerbudgetallocation eadth ofawar om seniorleaders ed withfamily om managers d choices d choices Other d to den 3% 3% 5% 9% 14% 15% 15% 16% 18% 18% 19% 19% 21% 22% 22% 35%

2015 Employee Recognition Report // 17 6 / 6 of appreciation. appreciation. of desire for employees to have tangible proof of their value to accompany specificmessages 1 percent of payroll on recognition results. this show In is better part, likely due to a findingswith previous that report have shown that companieswho morespend than more than 1% of percent of payroll on employee recognition rewards. This is in line Overall this found survey recognition that the most effective programs are spending levels of satisfaction for these programs. arethey currently spending for these programs, and compared then that with respective programs. 2015 The SHRM/Globoforce asked survey HR and leaders what practitioners asked questionOne often by HR is what is practice for spend in best recognition or YOS programs experience results. better Organizations that invest in employee recognition, and years of service

2015 Employee Recognition Report // 18 2015 Employee Recognition Report // 18 1.0 -1.4% EFFECTIVENESS OF RECOGNITION PROGRAM SPEND PROGRAM RECOGNITION OF EFFECTIVENESS FIGURE 14 1.5 -1.9% Q: Overall, how would you rate your organization’s current employee recognition efforts? recognition employee current organization’s your rate you would how Q: Overall, with Compared Q:  .5 -.9% .1 -.4% to employee recognition programs in fiscal year 2014? year fiscal in programs recognition employee to Approximately, what percent of your organization’s payroll was dedicated dedicated was payroll organization’s your of percent what Approximately, 2.0% 0% 0% 0% 0% 3% 6% 7% 10% 14% 19% 23% 24% Excellent 50%

Good/Fair 70% 76%

Poor 81% 83% 84% 91%

2015 Employee Recognition Report // 19 Mor EFFECTIVENESS OF YEARS OF SERVICE PROGRAM SPEND EMPLOYEE PER PROGRAM SERVICE OF YEARS OF EFFECTIVENESS FIGURE 15 Q: Overall, how would you rate your organization’s current service anniversary recognition efforts? recognition anniversary service current organization’s your rate you would how Q: Overall, with Compared Q:  HR among executives. ratings levelswe found of effectiveness that a SPEand between $100 hadof the highest $300 and around experiences YOS. compared we But when Spend Per Employee (SPE) to Years spend ofis service more challenging to calibrate because of inconsistent practices What is your average per employee spend on service anniversary awards? awards? anniversary service on spend employee per average your is What $201 -$300 e than$300 $101 -$200 $50 orless $51 -$100 0% 2% 4% 3% 8% 11% 20% 35% Excellent 36% 44%

54% Good/Fair 60% 65%

76% Poor 81%

2015 Employee Recognition Report // 20 Q: Overall, how would you rate your organization’s current service anniversary recognition efforts? recognition anniversary service current organization’s your rate you would how Q: Overall, with Compared Q:  What is your average per employee spend on service anniversary awards? awards? anniversary service on spend employee per average your is What

2015 Employee Recognition Report // 20 CONCLUSION began this series of reports. fabric of corporate cultures than even years short afew ago when we quickly apparent how recognition is more and more engrained into recognition that is closely affiliated with organizational values. It was recognition in today’s organizations—and in particular the impact of In this 2015 Employee Recognition Survey, we looked at the impact of 2015 REPORT FINDINGS2015 REPORT ingredientimportant to many companies in building places best to work. cultures are more magnetic, and it is apparent from these results that recognition is an many companies are expressing about turnover and and keeping attracting Stronger talent. This focus on creating a thriving culture is probably no coincidence, given the concerns so results, and seeingbetter difference measurementsin bothof culture and business results. Companies make who a commitment to recognition and milestone awards are experiencing measurable results for in them areas such as employee happiness, retention and ROI. are able to point to recognition as an initiative or program that is yielding important, More than ever, recognition is not only present in today’s companies, but those companies 6. 5. 4. 3. 2. 1.

The topThe three challenges by faced HR organizations today are turnover, employee engagement, and succession planning. The topThe goal for years programs of service is employee appreciation, but many programs still of the mark fall for short inspiration and quality. Values-based recognition programs are helping employers create astronger culture and more human workplace. organizational metrics. organizational Values-based employee recognition is as seen significantly contributing bottom-line to Organizations that invest in employee recognition and years programs of service experience better results. better experience programs. Few companies have chosen to adopt gamification and eThanks in their recognition

2015 Employee Recognition Report // 21 ABOUT GLOBOFORCEABOUT SURVEY THE ABOUT Southborough, Massachusetts, and Dublin, Ireland. unlock of the power the human workplace. Globoforce in is co-headquartered creator of the HR conference WorkHuman, designed to help organizations in employee engagement, retention, and productivity. company The is the programs. What results is measurable business success, qualified by increases business to leaders take more amodern, strategic approach to recognition award-winning andSaaS proven technology methodologies empower HR and world to inspire and energize employees and create places best to Our work. Institute, Globoforce is trusted by some of most admired companies in the of thanks. Named one ofWorkplaces the Best by the Great Place To Work companies build strong cultures of engaged employees through the power Globoforce is a leading provider of social recognition solutions, helping of business to business and business to consumer industries. Results include responses from organizations in the U.S. across awiderange margin of error of +/-3 percent. or more employees. had500 survey The aresponse rate of 14 percent and a 823 HR professionals are who employed at organizations with astaff size of at amanager level or above. final The sample of wasthe survey composed of This SHRM edition randomly of was the survey selected sent to members 6,000 sincesurveys launch its in 2011. from January 13 2015, to 4, deployment and February isin a the fifth series of Globoforce for Human and by conducted the Society Resource Management SHRM/GloboforceThe Employee Recognition was Survey commissioned by ®

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2015 Employee Recognition Report // 22 2015 Employee Recognition Report // 22

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