Mr. Sun

Human Resources, Recruitment & Training

Employee Engagement: How to use recognition and non-monetary rewards to drive employee engagement

By Justin Sun, Compensation Analyst, Lockheed Martin

In today's market where rewarding staff with salary increases and bonuses may be difficult to come by, the use of non-monetary rewards to drive engagement is no longer just an optional or nice thing to do. One of the most common nonfinancial rewards is recognition, and you can experience a high return on investment in the use of this simple, yet powerful reward through increased guest satisfaction ratings and loyalty.

But what does recognition actually have to do with the bottom line? A model that demonstrates the importance of recognition's role in driving financial performance is the service profit-chain. Developed by a group of Harvard University researchers in the nineties, the service profit-chain claims that a direct link exists between top service experiences, customer loyalty, and profit. Research shows that low employee turnover, due to high engagement, is correlated with high customer satisfaction and that a culture focused on showing genuine care for both customers and fellow employees is one of the highest drivers of engagement.

Furthermore, a recent study by MarketTools Inc. for Globoforce confirms that a lack of sincere recognition provided to employees is a leading cause of turnover. The study identifies a solid correlation between the level of recognition delivered by managers and the loyalty of their direct reports.
Thus, the effort that managers invest in getting to know their employees and the motivators that drive them to go above and beyond in their performance can translate into a dramatic increase in guest satisfaction scores and loyalty.

To illustrate, let's take as an example a top-performing front desk agent in your hotel who is having a difficult week due to a personal issue outside of work. Being aware of the trauma that this employee is dealing with, you could offer her the option of working a more flexible schedule, at least temporarily, to show that you are concerned about her personal needs. Catering to this employee's needs outside of the workplace is one way in which you could show her your appreciation for her continuous commitment to exceptional guest service and enhance her motivation level in doing so.

Managers need to take the time to get to know their employees and what makes them tick in the same way that they seek to learn more about their guests' preferences. By becoming more aware of what incentives-from a flexible working schedule to gift cards-are most meaningful to your employees, you can ensure that you obtain the greatest return on investment through your nonfinancial rewards. In an environment as mentally and physically stressful as a hotel, a simple effort to show real care and concern for your employees can have a dramatic impact on how they treat your guests.

If you want your employees to smile sincerely at guests and to greet each of them by name, you should demonstrate this behavior by smiling and greeting your own employees by name. If you want employees to engage in conversation with guests about how their day is going, you can encourage this behavior by showing a sincere desire to know how your employees are doing throughout the day. Only a few minutes of your time engaging in conversation with your employees can go a long way in driving engagement and achieving business goals.

You should also ensure that the delivery of non-monetary rewards is contingent on specific behaviors, so that you don't allow employees to feel entitled to the rewards that they receive. The manager who brings doughnuts in every Friday just to be nice may not be showing appreciation that is fresh and sincere; instead, he or she may just be fostering an expectation for more "free stuff" and perks in the future.

After working at various hotel properties, the common denominator I've identified in hotels that continue to achieve the highest guest satisfaction ratings is the consistent practice of recognition. When joining the reopening team of The Plaza, A Fairmont Managed Hotel in Manhattan, my goal in working with the rooms and human resources divisions of the hotel was to support the achievement of the coveted AAA Five Diamond award. As I thought about other properties in the Fairmont chain that possessed the AAA Five Diamond status, I wondered to myself, "What do our sister properties do well that The Plaza could improve in?" While I knew that modifying certain factors, such as the quality of our property's facilities were not within my direct control, I knew that recognition was a key area that I could focus on enhancing to help drive quick wins for our hotel.

At the time, the Fairmont Olympic-our sister property in Seattle-had the longest standing record of Five Diamond awards in the Fairmont chain and was a prime example of how recognition can help to foster a culture of appreciation that supports the delivery of exceptional guest service. What I believe set The Olympic apart from its competitors and other properties within our chain was not simple the quality of its facilities and amenities but rather the level of service delivered by the property's colleagues. During an internship that I held at The Olympic in a previous summer, I had the opportunity to experience firsthand this culture of delivering "engaging service," which was evident not only in the front-of-house side of the business but also in the heart-of-house.

In all parts of the hotel, colleagues frequently made an effort to help one another with tasks that were not a part of their immediate job description and to encourage and build one another up through acts of appreciation. For example, members of the management team served lemonade to employees as they entered and left the building on days when temperatures outside were scorching. This simple, inexpensive act was an effective way of showing care and concern for employees while illustrating the kind of "above and beyond" service that the hotel expects employees to show towards guests.

The Olympic is a leading example of the importance of frequent on-the-spot recognition. Hotels within the Fairmont chain utilize a program called Bravograms in which employees are encouraged to send one another frequent congratulatory notes for going above and beyond in supporting guests and colleagues. While it was not uncommon for colleagues at The Olympic to display hundreds of new Bravograms on departmental bulletin boards each month, I noticed that the use of Bravograms at The Plaza, although highly encouraged, was rare.

While The Plaza held monthly celebrations to recognize employees for anniversaries and achievements, on-the-spot recognition was not used very heavily. But as management began to encourage the use of Bravograms at the property, I noticed a great influx of guest comment cards that denoted examples in which our colleagues had gone the extra mile in delivering memorable guest experiences. Our JD Power rankings against our sister properties began to gradually increase as the use of spontaneous, on-the-spot increased.

Although numerous factors were involved with The Plaza's first-ever achievement of the AAA Five Diamond award in 2009, I am convinced that the culture of appreciation fostered by Fairmont's Bravograms played a critical role in helping our property to become one of "the best of the best." My experiences at both The Olympic and The Plaza have shown me firsthand the impact that day-to-day recognition can have on supporting a hotel in achieving its long-term business goals.

Research confirms that on-the-spot recognition-simple thank-you notes and words of gratitude-can go a long way in driving performance. According to Marcial Losanda, founder and executive director of Meta Learning, the ratio of positive to negative feedback delivered by managers in the highest performing organizations is 5.6 to 1. On the other hand, low-performing teams have a ratio of .36 to 1. This statistic reflects that a high prevalence of recognition can have a tremendous impact on driving engagement and guest satisfaction ratings.

If recognition and non-monetary awards can have as deep of an impact as they do on accomplishing business goals, why are they not more effectively utilized? Perhaps managers are so focused on the fast-paced operations of catering to guest needs that they forget to stop and thank employees for a job well done. Or perhaps managers are afraid to get too close or warm and fuzzy with one another. Maybe managers just don't acknowledge recognition as being a part of their core people leadership responsibilities.

Regardless of the excuses that managers may come up with for not showing appreciation to their teams, a powerful way to foster desired behaviors is to lead by example. Whether you are a frontline employee, a manager, or an executive team member, you can start taking steps to creating a culture of appreciation in your department. Here are three key pointers - Frequent, Specific and Timely - to keep in mind when delivering effective recognition:

  • Frequent: According to research by Gallup Organization, recognition needs to be provided every seven days to employees to in order for them to feel valued by the organization. Writing a thank-you note, sending an e-card of gratitude, or recognizing a colleague during a team meeting are all simple, yet powerful ways to show your appreciation for a job well done.

But don't wait until a major task or goal is completed to recognize. Ensure that you celebrate milestones achieved along the way. Remember that the room attendant who recently celebrated her twenty-fifth anniversary working at your property would not likely have reached that milestone without other milestone celebrations held for her along the way-from her one-year anniversary to fifth year anniversary and so forth. If you seek to retain top performers in a highly competitive industry where changing employers is common, don't wait to show an attitude of gratitude to your colleagues.

  • Specific: Being specific about what you are recognizing a colleague for is a critical part of making your recognition meaningful. The more details that you provide-e.g. the dates, times, and situations during which an action deserving of recognition occurred-will help employees to see the value of their contributions to the team. By being specific, you can help reinforce positive behaviors and avoid perceptions of favoritism among members of your team.

To create a specific form of recognition, think about the organizational values, such as respect and teamwork that you would like exhibited by team members. Then think about a team member who has exhibited a behavior that reflects one of these core values, and develop a specific statement of thanks that recognizes the individual for the behavior reflecting the core value.

  • Timely: The most effective recognition takes place immediately or shortly after the action deserving of recognition has occurred. Don't put off until later what you can do today.

The longer you wait to provide recognition, the more recognition loses its impact. For example, don't wait until the summer picnic or the Christmas party at the end of the year to recognize an act of superior guest service that took place in the earlier part of the year. Celebrate the achievements of your employees on the spot and re-highlight their accomplishments later if appropriate.

In addition to making sure that your recognition follows this three-pronged criteria, you should put just as much thought and detail into the presentation of your recognition. While most managers might be more comfortable with one-on-one recognition, showing appreciation in a group setting can help to make recognition more impactful.

During your daily line-ups or team huddles, try to publicly recognize at least one individual on your team who has gone above and beyond in his or her performance. Recognizing individuals in front of their peers can help to instill a greater sense of pride in the individual being recognized while motivating other members of the team to continually strive for results.

The ways to recognize your employees for a job well done are endless, although reward programs won't be effective if your team members are ambivalent about the rewards. Try to make an effort to get to know your employees and what's most important and meaningful to them at the end of the day.

Here are a few easy and affordable ideas that can help to boost engagement in a meaningful way:

  • Mail a personalized thank-you note to the family of an employee deserving of recognition and recognize the employee for his or her commitment to the company

  • Distribute personalized gift cards to supervisors who worked late hours throughout the week

  • Hold a special party for employees working the night shift who may often feel left out from recognition activities

  • Send an e-card to an employee who has gone the extra mile in delivering exceptional guest service, and CC management and peers of the employee on the card

  • On your way home, leave a voice message for an employee who has demonstrated exceptional guest service

  • Invite an employee to have coffee or lunch with members of the executive team

While recognition may not be rocket science, you may also need to hold your employees accountable for showing appreciation. When aligning on objectives for your employees at the beginning of the year, consider including the delivery of frequent, specific, and timely recognition in their objectives. For example, one of the goals you might set for managers is to have them write at least one thank-you card for an employee each week of the year.

Of course, recognition should be heartfelt and sincere, but until you clearly spell out on paper your expectations concerning recognition, your employees will continue to provide excuses for not showing appreciation. By holding managers accountable for fostering an engaging work environment, you can help eliminate the excuses of "I don't have time to recognize" or "Other managers aren't doing it, so why should I?"

According to a worldwide study by Towers Watson, the single highest driver of engagement is whether or not employees feel that their managers are truly interested in their wellbeing. While everyone is motivated by different incentives, few people can deny the power of recognition-the act of being treated in a different and more positive way-in igniting performance.

The bottom line is that recognition-when prioritized and done right-allows leaders to accomplish business goals. Amidst the hotel industry's growing competition to attract and retain top talent, recognition and non-monetary rewards are no longer just a part of the "soft side" of the business; they are now an essential part. There is no better time than today to start building engagement and retaining your human capital, so don't wait to appreciate.

Justin Sun is a Compensation Analyst for Lockheed Martin, one of the world’s largest defense contractors. In his current role, he serves as the Compensation Lead for the Communications, Legal, and Undersea Systems functions of the newly formed Mission and Systems and Training (MST) business area. In this role, he is responsible for supporting key compensation initiatives, such as FLSA compliance, rewards and recognition programs, compression, merit distribution process for union and non-union employees, and salary treatment standards. Mr. Sun’s hospitality experience includes support of the of New York’s Plaza Hotel through a $450 million renovation, reopening and helping to reposition the landmark hotel into a AAA Five Diamond property. While working in the human resources and rooms divisions, he devised standard operating procedures that improved the flow and consistency of service in the housekeeping, butler, and guest reception departments and strengthened collaboration between teams. Mr. Sun can be contacted at 206-484-8788 or js389@cornell.edu Extended Bio...

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