SHRM Survey Findings: Employee Recognition Programs, Winter 2012 In collaboration with and commissioned by Globoforce April 12, 2012

Key Findings What are the important workforce management challenges that organizations are currently facing? Nearly two-thirds of organizations (63%) agree that employee engagement is a “very important” challenge. More than one-half believe that employee retention (57%) and effective performance management (51%) are “very important” challenges. Other workforce management challenges identified as “very important” were employee recruitment (49%) and managing the organization’s corporate culture (45%). Do organizations track their employee engagement levels? Fewer than half (42%) of organizations track employee engagement levels. Common methods organizations use to track employee engagement are vendor-administered surveys (66%), employee exit interviews (65%) and employee retention rates (60%). Do organizations that track employee engagement levels differ from organizations that do not? Organizations that track employee engagement levels are more likely to respond “yes” when asked if employees at their organization are rewarded according to their job performance. Organizations that track employee engagement are also more likely to indicate that managers or supervisors at their organizations effectively acknowledge and appreciate employees, and that employees at their organizations are satisfied with the level of recognition they receive for doing a good job at work.

Key Findings (Continued) Do organizations have employee recognition programs in place? Approximately three-quarters of organizations (76%) have an employee recognition program in place, and another 5% say they plan to implement such program within the next 12 months. More than three-quarters (76%) of organizations with an employee recognition program in place say they “agree” or “strongly agree” their employee recognition program is aligned with their organization’s overall company values. Do organizations that have an employee recognition program in place differ from organizations that do not? Organizations that track employee recognition are more likely to respond “yes” when asked if employees at their organization are rewarded according to their job performance. Organizations that track employee recognition are also more likely to indicate that managers or supervisors at their organizations effectively acknowledge and appreciate employees, and that employees at their organizations are satisfied with the level of recognition they receive for doing a good job at work. Do organizations track the return on investment (ROI) of their employee engagement programs? Few organizations (15%) track the ROI of their employee engagement program. Organizations that do track the ROI commonly use employee retention levels (74%), overall financial results (61%) and employee productivity levels (60%).

Talent Management

Do you think that at your organization: January 2012 June 2011 Organizational charts are an accurate indicator of your organization’s leaders and influencers? 66% (n = 464) 71% (n = 491) Employees are rewarded according to their job performance? 58% (n = 432) 56% (n = 406) Annual performance reviews are an accurate appraisal for employees’ work? 55% (n = 389) 61% (n = 435) Managers or supervisors effectively acknowledge and appreciate employees? 50% (n = 375) 46% (n = 331) Employees are satisfied with the level of recognition they receive for doing a good job at work? 29% (n = 211) 31% (n = 223) Note: Respondents who answered “not sure” were excluded from this analysis. Percentages above reflect respondents who answered “yes” to the question.

The importance of workforce management challenges that organizations are currently facing: Very Important Important Unimportant Very Unimportant Employee engagement (n = 767) 63% 31% 5% 1% Employee retention (n = 768) 57% 34% 7% 2% Effective performance management (n = 765) 51% 44% 4% Employee recruitment 49% 6% Culture management (i.e., managing the organization’s corporate culture) (n = 763) 45% 9%

The importance of workforce management challenges that organizations are currently facing: (continued) Very Important Important Unimportant Very Unimportant January 2012 June 2011 Multiple cultures in the workforce (n = 760) 24% 35% 51% 49% 23% 15% 2% 1% Ability to harnessing the power of social networking technologies (n = 765) 19% 21% 56% 4% Global diversity of today’s company (n = 767) 18% 39% 38% 29% 8% 9% Differing generations among employees 13% 34% 59% 26% Note: These questions were asked in June 2011 (n = 742 for each option) and January 2012. Percentages may not equal 100% due to rounding.

Employee Engagement

Does your organization track employee engagement levels?

Does your organization track employee engagement levels? Comparison by organization staff size: Larger organizations (2,500 or more employees) are more likely than smaller organizations (2,499 or fewer employees) to track employee engagement levels . Publicly owned for-profit, privately owned for-profit and nonprofit organizations are more likely to track employee engagement levels, compared with government agencies. Larger organizations Smaller organizations Differences based on organization staff size 2,500 to 24,999 employees (47%) 25,000 or more employees (65%) 1 to 99 employees (39%) 100 to 499 employees (33%) 500 to 2,499 employees (30%) Larger organizations > smaller organizations Comparison by organization sector: Organization sector Publicly owned for-profit organizations (49%) Privately owned for-profit organizations (42%) Nonprofit organizations (50%) Government agencies (11%) Publicly owned for-profit, privately owned for-profit and nonprofit organizations > government agencies

Does your organization track employee engagement levels? Organizations that track employee engagement levels are more likely to respond “yes” to the following questions when compared with organizations that do not track employee engagement levels. On average… Track employee engagement levels Do not track employee engagement levels Do you think employees at your organization are rewarded according to their job performance? 69% 49% Do you think managers or supervisors at your organization effectively acknowledge and appreciate employees? 56% 46% Do you think employees at your organization are satisfied with the level of recognition they receive for doing a good job at work? 37% 23% Note: Percentages above reflect respondents who answered “yes” to the question.

Does your organization track employee engagement levels? Organizations that track employee engagement levels are more likely to say that certain management challenges they are facing are “very important,” compared with organizations that do not track employee engagement levels. Workforce management challenges that organizations identify as very important: Track employee engagement levels Do not track employee engagement levels Employee engagement 72% 57% Effective performance management 56% 47% Culture management (i.e., managing the organization's corporate culture) 50% 42% Global diversity of today's companies 23% 14% Differing generations among employees 17% 11%

How do you track employee engagement levels at your organization? Note: n = 330. Only respondents whose organizations track employee engagement levels were asked this question. Percentages will not equal 100% due to multiple response options.

Employee Recognition Programs

Does your organization have an employee recognition program? Note: Percentages may not equal 100% due to rounding. In June 2011, the option “no, but plan to in the next 12 months” was not available.

Does your organization have an employee recognition program? Organizations that have employee recognition programs are more likely to respond “yes” to the following questions when compared with organizations that do not have employee recognition programs. On average… Have an employee recognition program in place Do not have an employee recognition program in place Plan to implement a program in the next 12 months Do you think employees at your organization are rewarded according to their job performance? 64% 36% 44% Do you think managers or supervisors at your organization effectively acknowledge and appreciate employees? 55% 33% Do you think employees at your organization are satisfied with the level of recognition they receive for doing a good job at work? 34% 18% 5% Note: Percentages above reflect respondents who answered “yes” to the question.

Does your organization have an employee recognition program? Comparison by organization staff size: Larger organizations (25,000 or more employees) are more likely than smaller organizations (2,499 or fewer employees) to have an employee recognition program. Publicly owned for-profit, privately owned for-profit and nonprofit organizations are more likely than government agencies to have an employee recognition program. Larger organizations Smaller organizations Differences based on organization staff size 25,000 or more employees (91%) 1 to 99 employees (72%) 100 to 499 employees (65%) 500 to 2,499 employees (73%) 2,500 to 24,999 employees (77%) Larger organizations > smaller organizations Comparison by organization sector: Organization sector Publicly owned for-profit organizations (81%) Privately owned for-profit organizations (75%) Nonprofit organizations (76%) Government agencies (63%) Publicly owned for-profit, privately owned for-profit and nonprofit organizations > government agencies

Do you agree that employee recognition at your organization is aligned with your organization’s overall company values? Note: n = 586. Only respondents whose organization has an employee recognition program in place were asked this question.

Do you agree that employee recognition at your organization is aligned with your organization’s overall company values? Organizations that responded “strongly agree” or “agree” when asked if employee recognition at their organization is aligned with the organization’s overall company values are more likely to respond “yes” to the following questions, compared with organizations that answered “ strongly disagree” or “disagree.” On average… Do you agree that employee recognition at your organization is aligned with your organization’s overall company values? Strongly agree or agree Strongly disagree or disagree Employees at our organization are rewarded according to their job performance 76% 25% Organizational charts in our organization are an accurate indicator of our leaders and influencers 72% 48% Managers or supervisors at our organization effectively acknowledge and appreciate employees 65% 24% Annual performance reviews at our organization are an accurate appraisal for employees' work 64% 30% Employees at our organization are satisfied with the level of recognition they receive for doing a good job at work 43% 4% Note: Percentages above reflect respondents who answered “yes” to the question.

Strongly agree or agree Strongly disagree or disagree Do you agree that employee recognition at your organization is aligned with your organization’s overall company values? Organizations that responded “strongly agree” or “agree” when asked if employee recognition at their organization is aligned with the organization’s overall company values are more likely say that certain management challenges they are facing are “important,” compared with organizations that responded “strongly disagree” or “disagree.” Do you agree that employee recognition at your organization is aligned with your organization’s overall company values? Workforce management challenges identified as “important.” Strongly agree or agree Strongly disagree or disagree Effective performance management 46% 36%

Does your organization track the return on investment (ROI) of its employee recognition program? Note: n = 585. Only respondents whose organizations have an employee recognition program in place were asked this question. Respondents who answered “not sure” were excluded from this analysis.

of the employee recognition program Does your organization track the ROI of its employee recognition program? Organizations that track the ROI of their employee recognition program are more likely to respond “yes” to the following questions when compared with organizations that do not track the ROI of their employee recognition program. On average… Track the ROI of the employee recognition program Do not track the ROI Do you think employees at your organization are rewarded according to their job performance? 90% 59% Do you think managers or supervisors at your organization effectively acknowledge and appreciate employees? 76% 51% Do you think employees at your organization are satisfied with the level of recognition they receive for doing a good job at work? 55% 30% Do you think annual performance reviews at your organization are an accurate appraisal of employees' work? 72% 53% Note: Percentages above reflect respondents who answered “yes” to the question.

How long has your organization been tracking the ROI of its employee recognition program? Note: n = 89. Only respondents whose organizations track the ROI of their employee recognition program were asked this question.

How does your organization generally track the ROI of its employee recognition programs? Note: n = 94. Only respondents whose organizations track the ROI of their employee recognition program were asked this question. Total does not equal 100% due to multiple response options.

In your opinion, have any of the elements below increased, remained the same or decreased at your organization as a result of the implementation of an employee recognition program? Increased Remained the same Decreased Employee productivity (n = 86) 63% 35% 2% Employee engagement (n = 82) 61% 37% Return on profit margin (n = 60) 58% 40% Customer retention (n = 65) 52% 45% 3% Employee retention 51% 4% Return on equity (n = 56) 50% 48% Return on assets (n = 55) 42% 56% Employee absenteeism (n = 72) 8% 64% 28% Note: Only respondents whose organizations track the ROI of their employee recognition program were asked this question. Respondents who answered “not sure” were excluded from this analysis.

The Use of Gamification

Do you employ gamification tools in any of your HR programs? Gamification is the use of game design techniques and mechanics to solve problems and engage audiences. Gamification works by making technology more approachable, by encouraging users to demonstrate desired behaviors by showing a path to mastery and autonomy, and by taking advantage of humans' psychological predisposition to engage in gaming. Note: n = 629. Respondents who answered “not sure” were excluded from this analysis.

Demographics

Demographics: Organization Industry Manufacturing 21% Health care and social assistance 15% Professional, scientific and technical services 11% Educational services 10% Finance and insurance 9% Retail trade 6% Accommodation and food services 5% Public administration 4% Transportation and warehousing Construction 3% Information Utilities Note: n = 755. Total does not equal 100% due to multiple response options.

Demographics: Organization Industry (Continued) Administrative and support and waste management and remediation services 2% Arts, entertainment, and recreation Real estate and rental and leasing Agriculture, forestry, fishing and hunting 1% Management of companies and enterprises Mining Religious, grantmaking, civic, professional and similar organizations Repair and maintenance Wholesale trade Personal and laundry services 0% Other services 10% Note: n = 755. Total does not equal 100% due to multiple response options.

Demographics: Organization Sector Note: n = 734. Percentages do not total 100% due to rounding.

Demographics: Organization Staff Size

Demographics: Other Is your organization a single-unit company or a multi-unit company? Single-unit company: A company in which the location and the company are one and the same 15% Multi-unit company: A company that has more than one location 85% Does your organization have U.S.-based operations (business units) only or does it operate multinationally? U.S.-based operations only 52% Multinational operations 48% n = 743 n = 753 Are HR policies and practices determined by the multi-unit corporate headquarters, by each work location or both? Multi-unit headquarters determines HR policies and practices 39% Each work location determines HR policies and practices 2% A combination of both the work location and the multi-unit headquarters determine HR policies and practices 59% What is HR department/function for which you responded throughout this survey? Corporate (companywide) 53% Business unit/division 24% Facility/location 23% n = 650 n = 648

SHRM Survey Findings: Employee Recognition Programs SHRM Survey Findings: Employee Recognition Programs In collaboration with and commissioned by Globoforce Methodology: Response rate = 13% Sample composed of 770 randomly selected HR professionals from SHRM’s membership who are employed at organizations with a staff size of 500 or more employees. Margin of error is +/- 3% Survey fielded December 22, 2011-January 12, 2012 For more poll findings, visit www.shrm.org/surveys Follow us on Twitter: http://twitter.com/SHRM_Research