Recognize This! – Culture management continues to rise in importance to HR leaders as the ability to measure and analyze culture also improves through strategic employee recognition.

Last Friday in a broader post on how to get more value out of your core values, I alluded to the SHRM/Globoforce Fall 2012 Report. A bi-annual report, this latest edition focusses on “The Business Impact of Employee Recognition.”

While I encourage you download the full report on the employer perspective on the importance employee recognition, I’ll share with you here the top 5 findings of the report with my thoughts on why these are rising to the forefront of thought for leadership today.

Key Finding #1: The top 3 challenges faced by HR organizations today are succession planning, employee engagement and culture management.

Culture management has been rising fairly rapidly in the ranks of importance, which is highly gratifying as this communications that HR Pros understand more their ability to directly and proactively manage culture – and lead the charge to do so. Critically, they also understand they are able to change the conversation with their senior leadership team on the impact of culture management to the bottom line. The research itself reported:

“In part this is likely because culture is so critical, yet traditionally so difficult to measure and quantify. Companies are searching for reliable metrics for gauging culture and cultural change that can reinforce company values and drive business goals.”

Key Finding #2: Companies with strategic recognition programmes report less frustrated—and more enabled—employees.

Enablement is another topic rising in discussions thanks to work down by several analyst groups, including Hay Group and Towers Watson. The latter published this summer an interesting report showing that Sustainable Engagement delivers 2 times the operating margin that regular engagement does. And a key factor of sustainable engagement is enablement – making sure employees have the tools they need to do their jobs and the right environment to do it in. The interesting finding from the research showed:

“The SHRM/Globoforce survey found that when companies have strategic recognition programmes—programmes where all recognition awards are tied to corporate values—their employees feel more enabled and empowered to succeed and less tempted to jump ship. Employees with strategic recognition programmes also possess a stronger understanding of organizational objectives and feel more capable of achieving them. This is likely due to strategic recognition’s ability to reinforce values, encourage strong working relationships and clarify must-win battles.”

Key Finding #3: Strategic recognition programmes tied to corporate values are more effective than programmes without ties to corporate values.

This finding lends further weight to the ability to now proactively manage your culture through strategic, social employee recognition. From the research:

“These kinds of recognition programmes also yield actionable data that provides deeper insight into company culture and talent performance, which enables organizations to better manage and measure those areas.”

Key Finding #4: Empowering employees to both give and receive formal recognition yields better results.

You cannot manage your culture through management alone. That’s the difference between a culture of recognition and a recognition programme – giving ALL employees the power to recognize and reward each other for living your values, which are the core of your culture. And remember, true peer-to-peer recognition gives all employees skin in the game by communicating you trust them as well. From the research:

“In metric after metric, SHRM/Globoforce survey results showed that companies that have implemented peer-to-peer recognition perform better. These companies have recognition programmes with greater impacts on their financial results. HR managers perceive that employees are better attuned with company values and in turn feel that rewards are given out according to job performance. These companies are also more likely to feel highly engaged at work.”

Key Finding #5: Organizations that spend more than 1% of payroll on employee recognition experience better results.

Budgeting for employee recognition is nearly always a touchy subject. Too often, people wrongly assume the same results can be achieved through low cost pizza parties or casual pats-on-the-back. In fact, nothing communicates importance of anything better than putting monetary commitment behind it. (And often, companies are already spending at least 1% of payroll on recognition practices they aren’t even aware of.) From the research:

“Companies that allocated 1% or more of payroll to recognition see higher engagement levels, better retention and better financial results. They also have employees with stronger ties to company values.”

Again, I encourage you to download the full report for the facts and figures to help you build your business case for strategic recognition in your organization.

Here’s one parting thought from Mark Schmit, SHRM’s vice president of research:

“The latest SHRM/Globoforce survey shows HR leaders are thinking about how to instill stronger employee performance. Employee recognition, as observed by those surveyed, provides quantifiable business results. It’s these types of findings that cement recognition as a critical programme for any HR leader.”

How high on your priority list is culture management?