What’s your biggest concern in the next six months? WorldatWork recently reported the results of ComPsych Corp. survey asking just this question of HR managers. The answer itself is not surprising: “Maintaining employee productivity and morale” (31%). I do have to admit, however, that I was surprised that this outranked “Dealing with health-care costs and new legislation” (26%). Admittedly, I listen to my US colleagues and follow the US healthcare debate through the lens of my own lifetime experience with the Irish healthcare system, but it’s clear to me that these changes are of serious concern to employees, HR Pros and company leaders alike.

And yet, employee morale and productivity remains the greater concern. Why is this? The obvious answer is the fallout from actions taken during the recession. US National Public Radio (NPR) recently commented on research out of the University of Colorado, Denver, which found:

“With extreme downsizes (in workforce) in the long term, companies really do suffer relative to competitors in the same industry facing the same sets of economic conditions. Extreme downsizers are companies that cut their workforce by more than 20 percent. … Most of them lag their industry for as long as nine years after a recession.”

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What’s your investment plan for workforce improvement programs? An Accenture survey of CxO level executives (and a few HR pros) found recognition, incentive and training programs held steady or actually increased in the last 12 months.

As Incentive magazine reported on the study:

“In the United States, 39 percent of respondents made no changes to their recognition programs, while 28 percent increased them. … On average, about 24 percent of respondents cut those programs. International companies showed even more support for retaining or growing recognition, incentive, and training programs, with just 15 percent and 19 percent cutting recognition and incentive compensation programs, while about 75 percent maintained or grew them.”

This is well in line with similar findings from our own market research “Restarting Recognition: Tap into the Power of Recognition during the Recovery,” which includes results of research on how companies changed their employee recognition approach in response to the recession and how they are now adapting their recognition programs during the economic recovery. The paper also offers seven recommendations to properly calibrate your program for the recovery.

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What do you think? Are we in for a double-dip recession? Seems to me that the economic pundits are waffling hard on this topic. In a Bnet article, Margaret Heffernan seems to think so, but she offers great advice for what to do in a double-dip – grow! Click over to read her case study of Timken and how they, “Invest when times are tough so we can capitalize on those investments in the good times.”

A Towers Watson survey found many US and Canadian companies are following this advice, at least in terms of their investment in “talent/performance systems,” citing these as the most critical HR Service delivery issues in 2010 (quoting):

• Talent/performance management systems (42% versus 35% in 2009)

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I’m a fan of Ann Bares’ Compensation Force blog. She writes cleanly and clearly on what are often complex topics. She’s called herself a “spreadsheet jockey,” but she is uniquely talented at taking the information out of a spreadsheet and bringing to light the most pressing issues to those not immersed in employee compensation matters.

Last month, she broke down the challenge of merit pay. Click over and you’ll see at a quick glance why she concludes:

“There we have it, for what it’s worth. All I can say is, no wonder we’re looking beyond merit pay, and even cash rewards, to drive performance.”

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Irrational. Some days, does it seem like that’s the best word to describe the workplace? I tend to like Dan Ariely’s research on irrationality. Initial research

showed, “In eight of the nine tasks, the promise of a bigger bonus actually significantly decreased people’s performance.”

Paul Hebert recently reviewed Ariely’s latest book, The Upside of Irrationality on his i2i blog http://www.i2i-align.com/2010/06/the-upside-of-irrationality-if-there-is-one.html. Paul highlighted this very interesting twist on the impact of cash bonuses:

“In the experiment they told the participants that they already earned the 5 month bonus – and gave them the money, but told them they would have to return a portion based on their performance. If they maintained a certain level of performance they could keep the 5 months pay – but if they fell below they would start to “lose” their money.

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Meaning and purpose. It’s critical to employee engagement and productivity and it’s also what everyone wants in their work. Last week, the informal (highly un-scientific) poll on the GloboBlog showed that 53% of people are happiest at work when they know their work has contributed to a meaningful goal. Another 40% are happiest when someone appreciates their work – another form of showing meaning. (It’s also interesting to note that not a single person said they’re happiest at work when they get paid.)

Critical to meaning and purpose is having a sense of alignment — understanding your company’s objectives and values so well, you know the work you do contributes to those objectives and the values are in agreement with your own personal ones.

So what’s the problem? Ann Bares wrote about it well on her Compensation Force blog, based on recent Hewitt research.

“The large majority (73%) indicate that goals are somewhat aligned, that corporate goals are communicated and then left to local managers to translate. So for most employees, it all rests on effective coaching and direction from the local manager. … And how’s that working for us?”

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Performance management appraisals/reviews – it’s time for the mid-year “assessment.” And so the news and magazine articles are ramping up, too. Last month’s issue of Talent Management featured an opinion piece that puts the burden on you, the employee, to prove your performance worth during the review process.

Ugh. While I agree that the performance review process, in its clinical form, is a good idea (talk to people on a bi- or semi-annual basis to set goals and review progress), it quickly gets awfully messy as soon as you add humans to the mix. Why is that? The reason seems obvious to me.

If I’m sitting in the seat of the person receiving the performance appraisal, I feel the feedback I’m hearing is coming from one person’s perspective and may be calling up “old news” – stuff that happened ages ago. As the author of the Talent Management article says: “Without assistance, managers are unlikely to remember all of each employee’s valuable accomplishments.”

And if I’m sitting in the seat of the manager giving the review, I feel pressure to give meaningful, helpful feedback (both good and bad) to numerous employees, and balance that feedback objectively between them. That’s often not fair as people on my team perform very different roles.

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Why should you care about employee engagement and enablement? Hay Group in the UK recently released these numbers:

• 59% of UK employees started 2010 planning to find a new job
• Organizations that engage and enable employees reduce voluntary turnover by 54%
• Employees who are both highly engaged and enabled are 50% more likely to outperform expectations

That’s great… But what’s enablement? Hay group defines an enabling work environment as one that “empowers employees to ‘go the extra mile’ and provides the tools and processes to actively deal with employee frustrations.”

Sounds a lot like what I talked about in my last post on removing obstacles so employees can make progress – which they define as their own greatest factor of engagement.

What’s that look like in real numbers?

“Revenue: A typical company with $5 billion in revenues in an industry with average revenue growth of eight percent would see revenues increase by $400 million. A company with top quartile levels of employee engagement could expect an increase of $1 billion. And a company in the top quartile on both engagement and enablement could anticipate an increase of a full $1.8 billion.

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Intuit was recently featured in Workspan magazine (“Performance Management Rewired for the Recovery,” requires subscription log-in) speaking to their performance management approach. One factor deserving of special focus is their blending of evaluation, compensation, recognition and opportunity to reward performance.

Blending – that’s the operative word. Too often, companies implement these performance management tools or practices (or just some of these) as stand-alone efforts. What’s the result? As recent research I’ve referenced twice before points out:

“Employees were particularly dissatisfied with the performance of their companies in three broad areas:
• Performance management, which includes the processes and systems that set targets, collect feedback, and link actions to results
• Recognition, which includes formalized ways of acknowledging and rewarding strong performance
• People manager capabilities, which include people skills and leadership behaviors throughout the organization”

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I’ve been thinking over an article I read in Talent Management a couple of months ago. In “When Unequal Is Better,” Mike Prokopeak makes the well-reasoned argument that high performers deserve greater attention, career opportunity and compensation in organizations, but relying too heavily on compensation misses the point for top performers.

“Every pure talent I’ve ever dealt with has been motivated to enhance self-esteem,” said Steven Berglas, psychologist, executive coach and management consultant. “They are more or less immune to the pull of external rewards. They’re not in it for the money. They ask for money, but that’s more confirmatory. They were the chosen kids, the select kids, and they always shall be. They want that notoriety. They want to be declared No. 1, and that’s their burning desire. Most everything else is secondary or tertiary.”

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Quick. Tell me your company’s values. No peeking at the poster on wall. Can you recite them? You can? Good for you! Now, can you tell me what those values mean – what they look like – in your everyday work? In the work of your boss? In the work of the people who report to you?

There is great value in company values – but only if they become so “real” for employees, they know what it means in their daily work. A couple of months ago, Rosabeth Moss Kantor wrote in the Harvard Business Review the “Ten Essentials for Getting Value from Values.” The entire list is a must read, but today let’s focus on just two.

“Actions reflecting values and principles – especially difficult choices – become the basis for iconic stories that are easy to remember and retell, reinforcing to employees and the world what he company stands for.”

Yes, I agree. But Rosabeth doesn’t go far enough. HOW do you do this? What’s the process for getting these iconic stories shared and discussed in your organization? With strategic employee recognition, it’s easy. You encourage all employees, at every level, to notice and appreciate the efforts of their colleagues that reflect and demonstrate the values. You require a detailed message to highlight these points. You share the messages of recognition broadly throughout the company so others can learn “what the values look like in the work” as well.

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“Just show me the money.” vs. “Nobody notices or appreciates the work I do. Why should I bother?”

Just another way of saying cash vs. non-cash rewards. Let me make this really simple. Cash does not motivate, it does not recognize, it does not appreciate. Cash compensates. Pure and simple.

And that’s not a bad thing. The media spin on recent research from Mercer tries to make it seem that way with headlines that scream: “Forget non-cash compensation: employees say ‘show me the money.’” If you read more deeply into the article you see this: “Leading reward elements perceived to have the strongest impact on employee retention and engagement for 2010 are base salary increases (41%)…”

This isn’t surprising. Quite a few companies need to increase base salary to return employees to level they were earning in 2008, much less give them a raise. That’s the realities of recovering from the actions taken in the recession when salary cuts and wage freezes seemed the norm.

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As a blogger, you meet many interesting people and make several acquaintances through the blogosphere that you might not otherwise. One such relationship for me is with Doug Shaw, founder of What Goes Around Limited. Note the link when you visit his site – Stop doing dumb things to customers. That’s Doug’s attitude. We all know what we SHOULD be doing… so just step up and do it already! I like that attitude. It reminds me of a word I learned from an American colleague recently – it shows some “moxie.”

In a post last week, Doug went on a tear after hearing about a plan to restore short term financial incentives (bonuses) after all the mess they caused in this recession. Doug says it better than I can:

“OK, so having seen first-hand the value destroying, anti-collaborative behaviour that short term financial incentives drive, we’re gonna do it all over again. With a twist. We’ll let these sweet bonus carrots dangle a little further away. That way folks will have to focus even harder on the carrot, and from there I put it to you a stronger focus on the value destroying behaviour necessary to bag the carrot will emerge. Not happy? Furious more like!

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I am often asked and I lead frequent workshops on how to create successful strategic employee recognition programs. Programs that deliver the bottom-line results the CEO expects, the appreciation and acknowledgment the employees deserve, and the simplicity of use managers need. Our formula is proven and successful at any number of Fortune 500 multinational companies. While I don’t have any plans to change it, I’m always on the lookout for how to make it better.

I recently found excellent advice in, of all places, an article on gender diversity and inclusion in the workplace. The author offers this list of the best ways to derail gender inclusion:

1. Decide not to do an assessment, build a plan, set goals, or establish benchmarks.
2. Task a small group of committed, passionate people with designing and implementing a change initiative—and expect them to succeed without a clear mandate, significant resources, intelligent guidance, or visible support from above.
3. Start implementation without the support of key people.
4. Refuse to assign supervisors specific responsibilities; fail to reward those who follow through.

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“Our employees are our most valuable asset.”

Anyone else sickened by that phrase? I’ve heard it so often, it’s lost all sense of meaning. And though I do believe employees are a company’s greatest competitive advantage, too many companies are not treating employees as though they want to retain them in the recovery.

Charee Klimek’s answer to this is one of the most brilliant pieces of writing on the topic I’ve seen in recent months. A letter to the CEO, “Dear CEO, It’s Me Your Most Valuable Employee” outlines why employees are unhappy, even though they are fully aware of the constraints the company is under, and what the CEO could easily (and cost effectively) do about it.

Charee nails the common employee concerns – lack of trust, communication, collaboration, training and recognition – but her “ideas for positive change” are even better. Here’s the one on recognition:

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