Oliver Blume took over as chairman of VW last month. He is already the chief executive of Porsche. Balancing twin roles at two listed companies with different agendas and stakeholders is not for the faint-hearted. But then nobody gets to run the VW group without being capable and tough.
That said, Blume appears to have reached the top while remaining pleasant and on point with employee recognition. He routinely thanks people for their contributions and is known for gathering staff together for a beer to acknowledge their efforts.
Hitting the zeitgeist of employee recognition can be tricky. If it’s well-intentioned but patronising, people will become cynical about it. If it’s bent to purposes other than those for which it is intended, it quickly gets discredited. Pitch it right, however, and the research shows it will boost engagement, morale, performance and retention.
“The better a leader is at giving recognition, the more engaged their employees are,” write leadership development consultants Jack Zenger and Joseph Folkman in September’s Harvard Business Review. “Leaders rated in the bottom 10 per cent for providing recognition had employees at the 27th percentile on engagement. By contrast, those leaders rated in the top 10 per cent were at the 69th percentile.
“Those leaders in the top group also had employees who were much more confident that they would be treated fairly, felt they were kept better informed, showed significantly higher levels of discretionary effort and were much less likely to quit.”
None of this comes as a surprise to Niamh Graham, senior vice-president of global human experience at Workhuman which has been providing employee recognition and continuous performance development solutions to large corporates for more than 20 years. “The nature of work has changed. So too has the working environment and the key to being successful in this changed landscape is re-imagining the workplace with employee recognition at the centre,” Graham says.
According to statistics from Workhuman, employee recognition systems can increase employee engagement by a factor of four and performance by over a third. Recognition also helps retain talent, with those who get recognised four or more times a year two times less likely to quit.
At one time employee recognition was a narrowly defined concept largely confined to pay rises, year-end bonuses and maybe the odd gift card. More recently, and particularly during and post-Covid, it has moved much more into the realms of interpersonal relationships. The Workhuman platform, for example, offers its customers a mix of ways of acknowledging staff including peer-to-peer awards, service milestones and celebrating significant life events.
“With the turmoil people have been through over the last couple of years, there is definitely a new conversation going on among CEOs and HR leaders,” Graham says. “Essentially, it’s about going back to basics, humanising the workplace and introducing more gratitude. Gratitude is a major human moment that matters.
“Humans need to be connected and socially engaged, to have a sense of community and to be happy in their job and workplace. The question now is how we move this forward with new/future ways of working with some people fully on site and others fully remote,” Graham says. “These are the critical questions a lot of companies are focusing on at the moment because, as things stand, people are not really thriving.
“If someone feels like they’re operating in a silo and they don’t have a sense of alignment, that leads to feelings of isolation and stress so it’s important to increase their sense of connection.”
‘A people crisis’
Graham’s comments are backed up by international research conducted with more than 5,000 employees across western Europe by Gallup for Workhuman and released last week. It showed workers in Ireland, Britain and Belgium to be the most burnt-out in Europe. Irish workers appear to be the most stressed, with fewer than five in 10 describing themselves as thriving.
The research also found that the majority of employees in Ireland are unlikely to feel a strong connection to their colleagues or a sense of belonging in their workplace. However, when recognition is equitably distributed within their organisations, the pictures changes significantly with two-thirds more likely to consider themselves as thriving and less likely to feel burnt-out.
“Organisations in Ireland are facing a people crisis and wellbeing is not just important to individuals. It is critical to organisational culture and business outcomes and its absence comes with a serious price tag,” Graham says. “Clearly, the rollout of hybrid working policies is not enough to keep employees happy and healthy. They must feel valued and understand that their work is meaningful.
“Our research shows that appreciation and gratitude, and something as simple as saying ‘thanks’ can have an enormous impact both on the recipient and the giver. Businesses today must cater to the whole person and make recognition a formal part of their human capital strategy. It is an investment in business results, as well as in the people who will drive that success.”
Zenger and Folkman arrived at their conclusions about the positive value of employee recognition having collected thousands of 360-degree assessments for their research. In their view, “it is often helpful at the end of each day to ask yourself: Who went above or beyond today? Who did more than was expected? Who made a helpful contribution? Then, when names come to mind, don’t hesitate to give the recognition in a way that is most meaningful to them.”