Recognition Improves Employee Relations

The $12.6 billion First Tech Federal Credit Union in San Jose, Calif., had a problem – the company’s employee recognition tool wasn’t working. The previous tool was outdated, it wasn’t social and its reward amounts weren’t meaningful. In addition, the former program’s budget was parsed out to leaders and the amounts were small; because of this, it didn’t encourage employee participation or cross-team participation, explained Chary Krout, former SVP, human resources at First Tech and current founder/co-owner of Cultivate.

Employees were ultimately unsatisfied with this. They wanted more clarity and communication on performance. They felt their managers just talked at them, and that they didn’t really see the work they were doing and understand the areas where they needed development and support. The company’s leadership also recognized a need for change – they wanted a solution that would help them transition away from annual reviews, and ultimately empower employees to adapt with agility and update their priorities as the goals of the business changed, as well as reinforce a culture of shared accountability, according to a First Tech Case Study.

“Recognition is important to our people and culture. Traditional annual bonus programs are a one-time shot in the arm and key contributions are often forgotten by the time we get to the annual performance review,” Krout said.

She’s right – once-a-year recognition is great, but generally only great for that one day and maybe a short time after. Employees often need more regular engagement and recognition to feel satisfied at work.

Not only is recognition important for employees at First Tech, it seems to be important for employees across the country. However, many companies aren’t meeting the mark, and recognition may be one of the best ways to decrease turnover, and improve employee engagement and satisfaction.

An analysis by Gallup found only one in three workers in the U.S. strongly agree that they received recognition or praise for doing good work in the past week. “At any given company, it’s not uncommon for employees to feel that their best efforts are routinely ignored. Further, employees who don’t feel adequately recognized are twice as likely to say they’ll quit in the next year,” according to the Gallup analysis.

The risk for turnover is even higher for high-performing employees. “Highly talented employees who are not engaged were among those who had the highest turnover in each organization – on par with low talent, disengaged employees. In other words, when your best employees are not engaged, they are as likely to leave your organization as your employees who tend to have performance issues and are unhappy,” a Gallup article stated.

A Psychology Today article confirmed similar sentiments regarding the link between turnover and lack of employee recognition.

The article noted a study funded by Make Their Day, an employee motivation firm, and Badgeville, a gamification company, which surveyed 1,200 U.S. employees from a broad cross-section of industries. It highlighted the following results:

• 83% of respondents said recognition for contributions was more fulfilling than any rewards or gifts;
• 76% found peer praise very or extremely motivating;
• 88% found praise from managers very or extremely motivating; and
• 90% said a “fun work environment” was very or extremely motivating.

First Tech’s leaders understood the importance of a robust recognition program. They wanted to create an experience that allowed employees to not only recognize peers on their own team, but also recognize colleagues on any team within the credit union.

The credit union partnered with Workhuman to design and implement an application that connects employees to their business and coworkers, and drives measurable business results. The application is composed of two programs: Conversations and Recognize. The Conversations pilot program enables managers to frequently check in with employees to provide feedback, and set goals and priorities. The Recognition tool enables people to express gratitude for work being done. “The functionality of the tool is simple and easy to use. You can ‘Recognize’ co-workers, ‘Redeem’ awards, scroll the Recognition Feed and comment/like on awards given,” Krout explained.

Krout said the Recognize tool provides a microphone-type effect that is commonly experienced when interacting on a social media feed. Together, the two tools provide a platform for users to effectively tell the complete story of an employee’s impact and journey at First Tech.

Results for the past year are positive: 100% of employees received a Recognize award within the first year and more than 3,400 check-ins occurred during the Conversations pilot group. Initial data also showed employees who give recognition are two times less likely to leave the credit union than those who just receive recognition. Employees who receive recognition are more than two and a half times less likely to leave First Tech, according to the First Tech case study.

The Recognize tool has been especially beneficial to contact center employees, who often encounter challenging member interactions. Leaders are using the Recognize tool to motivate the call center team, lift engagement and remind employees of everything they’re doing right, Krout said. “We believe that when you are able to retain employees, you’re able to deliver better results. When retention levels remain strong, it helps ensure projects are delivered [in a] timely [manner], [that there is] minimal business interruption of daily transactions, and future planning processes continue,” Krout explained.

These results fall in line with the goals of Workhuman’s Social Recognition tool, which was created as a response to the insight that frequently sharing positive stories of gratitude and respect, in alignment with company values, motivates and inspires people to do great work, and result in measurable benefits for the organization. Here are some stats on the tool:

• Employees who receive more than five rewards per year are significantly more likely to also increase their year over year performance rating.
• Employees with 1.5 to two awards per quarter feel more appreciated for their work, and as a result, are significantly more engaged.
• On average, a rate of seven to 10 recognition moments per year is correlated to a two times lower chance of voluntary turnover.

Krout explained that other credit unions are moving forward with the concept of recognition as a way to further engage employees in their work and demonstrate how their values show up every day. “These progressive credit unions and leaders see recognition and continuous feedback is a key component in connecting their employees to their mission, vision and values, and most importantly, connecting them to their work, each other and members,” she said.