As the war for talent continues to escalate, employee recognition has become a critical component of companies’ total rewards and staffing strategies. Employee engagement is now the largest concern of many companies’ HR departments and it is widely suspected that recognition has an important role to play in fostering engagement. While recognition is not new, it is finally becoming more strategic as programs align recognition with business objectives and desired behaviors

Bartlomiejczuk, Greg

English

As the war for talent continues to escalate, employee recognition has become a critical component of companies’ total rewards and staffing strategies. Employee engagement is now the largest concern of many companies’ HR departments and it is widely suspected that recognition has an important role to play in fostering engagement. While recognition is not new, it is finally becoming more strategic as programs align recognition with business objectives and desired behaviors.How_do_Recognition_Programs_Impact_Employe_Engagement.pdf: 7449 downloads, before Oct. 1, 2020

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How do Recognition Programs Impact Employee Engagement and How have Companies with a Large Global Footprint Structured such Programs to Drive Results?

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Spring 2015 
How do Recognition Programs Impact Employee Engagement and 
How have Companies with a Large Global Footprint Structured 
such Programs to Drive Results? 
Greg Bartlomiejczuk 
Cornell University 
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How do Recognition Programs Impact Employee Engagement and How have 
Companies with a Large Global Footprint Structured such Programs to Drive 
Results? 
Abstract 
As the war for talent continues to escalate, employee recognition has become a critical component of 
companies’ total rewards and staffing strategies. Employee engagement is now the largest concern of 
many companies’ HR departments and it is widely suspected that recognition has an important role to 
play in fostering engagement. While recognition is not new, it is finally becoming more strategic as 
programs align recognition with business objectives and desired behaviors. 
Keywords 
human resources, recognition programs, employee engagement, multinationals, employee rewards 
Comments 
Suggested Citation 
Bartlomiejczuk, G. (2015). How do recognition programs impact employee engagement and how have 
companies with a large global footprint structured such programs to drive results? Retrieved [insert date] 
from Cornell University, ILR School site: http://digitalcommons.ilr.cornell.edu/student/90 
Required Publisher Statement 
Copyright held by the authors. 
This article is available at DigitalCommons@ILR: https://digitalcommons.ilr.cornell.edu/student/90 
Greg Bartlomiejczuk                April 2015 
 
EXECUTIVE SUMMARY 
 
RESEARCH QUESTION  
How do recognition programs impact employee engagement and how have companies with a large 
global footprint structured such programs to drive results? 
 
INTRODUCTION  
As the war for talent continues to escalate, employee recognition has become a critical component of 
companies’ total rewards and staffing strategies. Employee engagement is now the largest concern of 
many companies’ HR departments and it is widely suspected that recognition has an important role to 
play in fostering engagement.1 While recognition is not new, it is finally becoming more strategic as 
programs align recognition with business objectives and desired behaviors.  
 
THE IMPACT OF RECOGNI TION PROGRAMS  
Employee engagement has been shown to be a significant factor in improving a variety of organizational 
outcomes such as customer loyalty, profitability, employee productivity, and retention (see Figure 1).2,3 
Employee recognition, in turn, has been found to positively relate to employee engagement,4 with one 
study suggesting that 41% of the variation in employee engagement is attributable to the strength of 
recognition an employee receives.5  
 
Furthermore, recognition programs, on their own, can help instill and reinforce corporate values, help 
with retention, and positively impact financial results.6 They also boost productivity, engagement, profit 
margins, customer retention, employee retention, ROE, and ROA.7  
 
RECOGNITION PROGRAM L ANDSCAPE  
Length of service is still the most commonly recognized employee achievement, with a prevalence of 
84% among companies with recognition.8 Other programs that round out the top five include above-
and-beyond performance (75%), peer-to-peer (42%), programs to motivate specific behavior (41%), and 
retirement (34%). These need not be mutually exclusive, as, for example, peer-to-peer formats can be 
used to motivate specific behaviors or highlight great performance. Since 2008, programs to motivate 
particular behaviors have seen the most significant growth.9 At the same time, programs have become 
increasingly aligned to strategic business objectives.10,11,12 Companies with strategic recognition report 
that 37% of employees are highly engaged, versus 25% where recognition is non-strategic.13  
 
Many companies have numerous recognition programs: only 7% of companies have one recognition 
program, while 85% have between two and six.14 Furthermore, many have both formal and informal 
programs. Leveraging both formal and informal means of praise can allow companies to cultivate a 
culture of recognition, and to make instances of recognition meaningful (see Figure 2).15  
 
CASES  
1) KPMG’s Encore program 
Amid legal and regulatory challenges in the early-to-mid 2000’s, KPMG endeavored to improve 
employee morale and engagement through numerous initiatives, one of which was its Encore recognition 
program.16 This cloud-based strategic recognition program, which began locally and was soon rolled out 
nationally, allows managers and employees to provide on-the-spot recognition by nominating fellow 
employees for behaviors or results that are consistent with company values. The award structure has five 
different levels, depending on the employee’s contribution: a non-monetary “Thanks” e-card, and gift 
cards or equivalent value gifts of “Cheers” ($25), “Applause” ($100), “Bravo” ($200), and “Standing 
Ovation” ($500).17 Each employee can receive up to $1000 a year in rewards. KPMG found that 
engagement and retention at sites which first had the program were higher than at those without it. 
Further, the firm has aligned rewards with performance evaluations—employees who score highly 
should be recognized accordingly.  
 
In 2008, the plan was expanded to the UK with the help of Globoforce. The local employment rewards 
and recognition schemes were not viewed as strategic and, further, the influence of those programs was 
hampered by an existing bonus scheme that was based on individual performance. After one year, 25% 
more employees were receiving recognition rewards and the number of awards handed out grew by 165 
percent.18 Today, KPMG in the UK notes Encore as a benefit in its job listings.  
 
2) E.On’s Buzz program 
E.On, a German utility company with presence in 30 countries and 2014 revenues of €111.5 billion, 
implemented a peer-to-peer recognition program in 2013. The program, Buzz, was delivered by a 
subsidiary of Sodexo, P&MM. With this program employees can access a dedicated website to send a 
“buzz,”—a personalized thank you note that can be either printed or electronic. The buzz can go out to 
individuals or to several team members for doing something seen as genuinely helpful for other 
employees or the team. Every staff member is allowed to nominate anyone else and E.On’s executive 
board members regularly participate. In the two years since implementation, 76% of employees have 
received a buzz from either coworkers or managers, and 53% have requested one for a peer. Over this 
time, the company found marked increases in motivation (13%), the number of employees feeling valued 
(33%), and employee understanding of the business vision (31%).19  
 
3) Fairmont Hotels & Resorts 
In the mid-2000s, focus-group feedback on Fairmont’s recognition efforts showed employee 
dissatisfaction with numerous aspects of the program: the scope did not reach all employees, team 
members wanted more opportunities to recognize peers immediately, and they wanted to do so in a 
more personalized way. Further, employees wanted nominees for monthly or quarterly recognition to be 
consistent role models. In response, the firm launched the Serviceplus Colleague Recognition Program. 
The program offers award options ranging from $10-$50, which the employee may redeem from a 
central website or over the phone. Award levels include “Memory Maker” for thoughtfulness or 
creativity, “Star of the Month” for consistent performers who demonstrate company values, as well as a 
public “Bravo” callout for employees who are executing well in smaller ways. Follow up surveys since 
the May 2007 launch showed “significant increases” in feelings of recognition from employees.20  
 
CONCLUSION 
Recognition programs are becoming powerful avenues for exerting positive change in the workplace. 
What was once a nice-to-have practice is becoming a driver for improving employee engagement and a 
host of other factors that impact the bottom line, when properly executed. By making the programs 
strategic, leveraging peer-to-peer recognition, and garnering top executive buy-in, companies can 
maximize their return on investment on these programs. 
 
 
  
APPENDIX 
 
Figure 1 
 
Source: Reilly, R. (2014). Five Ways to Improve Employee Engagement Now. Gallup Business Journal, 1. 
 
Figure 2 
 
Source: Kaufman, T., Chapman, T., Allen, J. (2013). The Effect of Performance Recognition on 
Employee Engagement. Cicero Group. 
  
CITED REFERENCES 
1, SHRM/Globoforce Employee Recognition Survey: Driving Stronger Performance Though Employee 
Recognition. (2013, Spring) http://go.globoforce.com/rs/globoforce/images/SHRM_Spring2013_web.pdf 
 
2, Harter, J.K., Schmidt, F.L., Agrawal, S., & Plowman, S.K. (2013). The relationship between engagement at 
work and organizational outcomes. Gallup. Retrieved from http://www.gallup.com/services/177047/q12-
meta-analysis.aspx 
 
3, Prasad, A. (2012). Beyond engagement: practical insights for building & sustaining engagement. Towers 
Watson. Retrieved from http://www.towerswatson.com/assets/pdf/events/15554/Towers%20Watson%20-
%20Beyond%20Engagement%20by%20Amrita%20Prasad.pdf 
 
4, Tetrick, L. E., & Haimann, C. R. (2014). Employee recognition. In A. Day, E. K. Kelloway, J. J. Hurrell, A. 
Day, E. K. Kelloway, J. J. Hurrell (Eds.) , Workplace well-being: How to build psychologically healthy workplaces (pp. 
161-174). Wiley-Blackwell. 
 
5, 15, Kaufman, T., Chapman, T., Allen, J. (2013). The Effect of Performance Recognition on Employee 
Engagement. Cicero Group. Retrieved from http://www.octanner.com/landing/impact-of-performance-
recognition.html 
 
6, 12, 13, SHRM/Globoforce Employee Recognition Survey: The Business Impact of Employee Recognition 
(2012, Fall). Retrieved from 
http://go.globoforce.com/rs/globoforce/images/SHRMFALL2012Survey_web.pdf 
 
7, SHRM/Globoforce Employee Recognition Survey: The Impact of Recognition on Employee Engagement 
and ROI (2012, Winter). Retrieved from 
http://go.globoforce.com/rs/globoforce/images/SHRMWinter2012Report.PDF 
 
8, 9, 14, WorldatWork (2013) Trends in employee recognition. Retrieved from 
www.worldatwork.org/waw/adimLink?id=72689 
 
10, Daunt, V., Menzies, V. (2015) Recognition programs – are they important? Deloitte. Retrieved from 
http://www2.deloitte.com/ie/en/pages/deloitte-private/articles/recognition-programmes.html#  
 
11, Saunderson, R. (2011). How to get your recognition strategy right. Workspan, 54 (5), 66-71. 
 
16, Starner, T. (2006, June 2). A new, improved KPMG. HR Executive Online. Retrieved from 
http://www.hreonline.com/HRE/view/story.jhtml?id=5495332 
 
17, Keirn, J. (2014, September/October). 2014 Best Places to Work: Top Scorer, Large Organization – 
KPMG. Inside Business. Retrieved from 
http://ibmag.com/Main/Archive/2014_Best_Places_to_Work_Top_Scorer_Large_Organiza_12681.aspx  
 
18, Globoforce (2012). KPMG case study. Retrieved from http://www.globoforce.com/our-clients/kpmg/  
 
19, Crawford, R. (2015). E.On boosts staff engagement via recognition. Employee Benefits, 1.  
 
20, Smith, M. (2009) The power of Fairmont Hotel & Resorts’ strategic employee recognition program. 
Workspan, 52 (8), 29-32.  


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