1. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 SHRM Survey Findings: Employee Recognition Programs, Fall 2012 In collaboration with and commissioned by Globoforce November 15, 2012

2. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Twice a year, Globoforce® conducts a survey with the Society for Human Resource Management (SHRM®), the world’s largest association devoted to human resource management. Our goal is to elicit trends among HR leaders and practitioners about what challenges they face and what strategies help them conquer those challenges. This August, we surveyed 6,000 HR professionals in organizations with 500 or more employees and asked them to share their experiences and practices. This fall 2012 survey uncovers new insights on emerging employee recognition trends and best practices. We looked in particular at these questions:  What are the top issues facing HR management today?  Is it important that core values be aligned with recognition?  How are emerging practices like peer-to-peer recognition affecting engagement?  What is the impact of recognition on “employee enablement”?  What are the best practices for spending on a recognition program? Introduction 2

3. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Key Findings 3  How many organizations currently have an employee recognition program in place? A majority of organizations (77%) reported that they currently have an employee recognition program in place. One-half (50%) of the organizations that have a program in place also indicated that it is tied to the organization’s values.  What are some of the reasons organizations implement an employee recognition program? Most organizations use employee recognition programs to improve employee morale and to increase employee engagement (79%). Other common reasons are to reinforce their organization’s values (59%) and to reduce employee turnover rates (34%).  What changes have organizations experienced after they have implemented an employee recognition program? Over one-half (51%)of the organizations reported an increase in employee engagement after implementing an employee recognition program. Some organizations also reported an increase in customer satisfaction (35%) and employee productivity (30%).

4. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Key Findings (continued) 4  How often do organizations conduct employee performance reviews? Seventy-four percent of the organizations reported they conduct an annual performance review. Only 21% conduct reviews semiannually, and very few (3%) conduct quarterly reviews.  How do organizations describe their performance review process? Most organizations that conduct employee performance reviews (72%) believe they provide constructive feedback to most of the employees in the organization, and nearly one-half (47%) feel their performance reviews offer an accurate reflection of the employees’ contributions.  What are some HR challenges organizations are currently facing? Succession planning has become a common HR challenge (41%) as well as employee engagement (40%) and culture management (30%). Other HR challenges organizations indicate experiencing include recruitment (28%) and performance management challenges(28%).

5. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Does your organization have an employee recognition program? 5 Note: n = 763. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not equal 100% due to rounding.

6. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 What are the main objectives of your employee recognition program? 6 Note: n = 555. Percentages do not equal 100% due to multiple responses.

7. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Does your organization’s employee recognition program... 7 Note: Respondents who answered “don’t know” were excluded from this analysis.

8. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Employee Turnover Rates and Employee Recognition Programs 8  Organizations with employee recognition programs reported an average employee turnover rate of 14% compared with organizations without an employee recognition program in place (17%). This translates to an average turnover rate that is 22% lower among organizations with employee recognition programs in place. Does your organization have an employee recognition program? Mean employee turnover rate Yes (n = 339)14% No (n = 66)17%

9. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 9 Note: Respondents who answered “don’t know” or “not applicable” were excluded from this analysis. Percentages may not equal 100% due to rounding. Increased Remained the same Decreased Employee engagement (n = 481)51%47%2% Customer satisfaction (n = 361)35%64%1% Employee productivity (n = 455)30%70%<1% Profitability (n = 339)29%67%3% Customer retention (n = 325)25%74%1% Employee retention (n = 449)24%72%4% Employee absenteeism (n = 409)6%83%11% Have the elements below increased, remained the same or decreased at your organization as a result of the implementation of an employee recognition program?

10. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Based on engagement surveys conducted by your organization, what percentage of your employees feel highly engaged in the workplace? 10 Note: n = 442. Respondents who answered “don’t know” or “not applicable” were excluded from this analysis.

11. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 11 n = 699 How would you rate your employees’ current frustration level with getting things accomplished at your organization?

12. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Do you believe employees at your organization... 12 Note: Respondents who answered “don’t know” were excluded from this analysis.

13. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 On average do you think... 13 Note: Respondents who answered “don’t know” or “not applicable” were excluded from this analysis.

14. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 How frequently does your organization conduct employee performance reviews? 14 Note: n = 669. Respondents who answered “don’t know” or “not applicable” were excluded from this analysis. Percentages do not equal100% due to rounding.

15. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Which best describes your organization’s performance review process? 15 Note: n = 669. Percentages do not equal 100% due to multiple response options.

16. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 16 Note: n = 658. Respondents who answered “don’t know” were excluded from this analysis. In your professional opinion, do you believe that the organizational culture is important to your organization’s leadership?

17. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 What are the most important HR challenges to your organization? 17 Note: n = 680. Participants were asked to choose their top three choices. Percentages do not equal 100% due to multiple response options.

18. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Demographics 18

19. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Which of the following best describes your primary role within your organization? 19 Note: n = 678. Percentages do not equal 100% due to rounding.

20. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Demographics: Organization Staff Size 20 Note: n = 618

21. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Demographics: Organization Sector 21 n = 642

22. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Demographics: Organization Industry 22 Organization Industry Percentage Manufacturing25% Health care and social assistance14% Professional, scientific and technical services12% Educational services10% Government agencies10% Retail trade9% Finance and insurance8% Transportation and warehousing7% Accommodation and food services6% Administrative and support and waste management and remediation services 4% Utilities4% Note: n = 669. Percentages do not equal 100% due to multiple responses.

23. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Demographics: Organization Industry (continued) 23 Organization Industry Percentage Arts, entertainment and recreation3% Information3% Repair and maintenance3% Wholesale trade3% Construction2% Mining2% Real estate and rental and leasing2% Agriculture, forestry fishing and hunting1% Personal and laundry services1% Religious, grantmaking, civic, professional and similar organizations1% Other10% Note: n = 669. Percentages do not equal 100% due to multiple responses.

24. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 U.S.-based operations only56% Multinational operations44% Single-unit organization: An organization in which the location and the organization are one and the same. 13% Multi-unit organization: An organization that has more than one location. 87% Multi-unit headquarters determines HR policies and practices 46% Each work location determines HR policies and practices 2% A combination of both the work location and the multi-unit headquarters determines HR policies and practices 52% Is your organization a single-unit organization or a multi-unit organization? For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both? Does your organization have U.S.- based operations (business units) only, or does it operate multinationally? n = 672 n = 676 n = 311 Corporate (companywide)55% Business unit/division26% Facility/location18% Note: n = 600. Percentages do not equal 100% due to rounding. What is the HR department/function for which you responded throughout this survey? Demographics: Other 24

25. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 Response rate = 14% 815 HR professional respondents from a randomly selected sample of SHRM’s membership with the title of manager or above and 500 or more employees. Margin of error +/-3% Survey fielded: August 31, 2012 - September 21, 2012 SHRM Survey Findings: Employee Recognition Programs, Fall 2012 In collaboration with and commissioned by Globoforce 25 Survey Methodology

26. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 26 Globoforce is the world’s leading provider of social recognition solutions, redefining how companies understand, manage, and motivate their employees. Innovative companies around the world use Globoforce’s cloud-based social recognition software to reveal the true performance and influence of every employee and strengthen company culture. With Globoforce, HR and business leaders can take a strategic approach to recognition programs that result in measurable benefits to the bottom line driven by increases in employee engagement, retention, and productivity. Globoforce is co-headquartered in Southborough, Massachusetts, and Dublin, Ireland. To learn more:  Visit: http://www.globoforce.comhttp://www.globoforce.com  Read: http://globoforce.com/globobloghttp://globoforce.com/globoblog  Twitter @Globoforce@Globoforce  LinkedIn: http://www.linkedin.com/company/globoforce http://www.linkedin.com/company/globoforce 26 About Globoforce

27. SHRM/Globoforce Survey: Employee Recognition Programs, Fall 2012. ©SHRM 2012 27 The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 260,000 members in over 140 countries, the Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China and India. 27 About SHRM