Incentives and Recognition for Employee Engagement

In the spring of 2020, unemployment hit an unthinkable 15%, the highest in 70 years (U.S. Bureau of Labor Statistics). Lynn Randall, Senior Strategy Director, InVision Communications discusses with Stephanie Harris, President, Incentive Research Foundation (IRF) the current state of the human capital management crisis and how the role of incentives and recognition can help solve the issue to increase employee engagement.

You will learn:

• Statistical and research data that explains why the Great Resignation is happening in the workforce
• Actionable steps on how to address the issues by using employee incentives and recognition

Transcript

Lynn Randall (00:09):
Welcome to the IVC Podcast, where we help brands navigate audience engagement in times of change. I'm Lynn Randall, Senior Strategy Director at InVision, and I assist our clients with everything from communication plans and strategies to culture change initiatives to measurement to what I believe is particularly salient for our conversation today, and that's employee engagement.

Stephanie Harris (00:38):
And I'm Stephanie Harris. I'm the President of The Incentive Research Foundation. We're an organization that funds and promotes research to advance the understanding and appropriate use of non-cash incentives. As a foundation, all of the research that we create is available free, whether that's research papers, webinars, et cetera, and I'm thrilled to be here today to talk to you, Lynn.

Lynn Randall (01:09):
Well, as always, I love chatting with you. We've known each other for quite some time, and I've been involved with The Incentive Research Foundation for quite some time. It's an organization that I'm very proud of your mission and what you do, so let's start the conversation with the research part of The Incentive Research Foundation. COVID-19 really drove some massive shifts in the workforce, and what I heard is that at its peak, in the spring of 2020, employment hit an unthinkable 15%, which is, according to the U.S. Bureau of Labor Statistics, the highest that it's been in more than 70 years, and our industry is particularly hard hit.

Stephanie Harris (01:55):
Absolutely. Now, what we're seeing is a jobless rate that's really plummeted to just over 2% for degreed workers and 4% overall. I mean, that's a huge shift, and I think that kind of churn has really ... I mean, it's created a lot of turmoil. It's created particular, I think pain points, as you said, in industries like retail and hospitality where incentives really kind of lives and thrives, and a lot of employers can't find the talent to fill these positions.
The reality is, this isn't a short-term thing. This is going to be a long-term issue because we have this interesting combination of people, I like to say, like finding their bliss during COVID, where they went out and kind of found jobs that maybe felt more meaningful, that maybe felt like there was more appreciation, but that combined with a shrinking workforce overall as the population ages makes this a long-term challenge.

Lynn Randall (03:07):
Without a doubt, and in fact, I recently read an HBR article that talked about the fact that this trend, what people are calling the great resignation or the great reshuffle, it actually was a trend that had started years and years ago, and during COVID, people became aware of it because it was much more acute, but this is a long-term trend. It is a long-term issue. I did a little bit of research on the topic myself because so many of our clients are interested and affected by the topic in the meeting, so that's hospitality industry, and I was kind of startled to look at what demographic differences look like within this big quit, big shift situation. Adobe did a study last year that said that 59% of Gen Z reported being least satisfied with their jobs and 56% with their work-life balance. That two thirds of that Gen Z demographic said that they felt the most pressure to work during office hours, even though they don't do their best work during those hours.
They prefer to work outside of normal office hours. There's 2.3 million women who've left the labor force since February of 2020, and the fact that women of color account for more than 53% of the jobs that were cast off in 2021.

Stephanie Harris (04:35):
I mean, those are amazing stats, and I think it's really interesting when you look at Gen Z, when you look at the work-life balance things. I mean, these were all issues that COVID really brought to life. All of the sudden, we were taken off of the hamster wheel. We had to take this forced moment to stop and reflect, and I think that notion of how we like to work, where we like to work, when we like to work, all of a sudden was sitting right in front of us. I mean, and think about since the pandemic started, how much worse the average person's workday has gotten, whether that's because you're in an understaffed organization where those individuals who are left are taking on more because the work still needs to happen.
According to Harvard Research, they saw that the average workday now is 48.5 minutes longer, so you've got an extra hour essentially added to your workday, and that's on top of already being stressed and simply having more than you have to do. The other interesting thing is a Microsoft study that found employees were working more often at night to your point, or through lunch or over the weekends, and I think some of that is because if you're not practiced in terms of being a remote worker, and I've been one for more than a decade, it's so difficult to separate your work life and your home life. You're at work 24 hours now, if you're working from home suddenly, and that's a skill. You have to develop that discipline and those skills. I mean, it's a big change for people.

Lynn Randall (06:45):
Well, as you know, I also have been a remote employee for probably around a decade, maybe a little roughly, and what I find is there are more and more and more meetings all the time. There are 13% more meetings. Another thing that I wanted to add specifically about our own industry, I don't know if you saw this, but meetings net in late February surveyed they got about 175 event planner, event people responses. 88.6% said that their job is much more stressful or somewhat more stressful than before the COVID pandemic, so you think about how stressful their jobs were before this, and now 88.6%, almost vast majority of them, and 36% said that they feel stressed or frustrated at work every day, so with that, that's going to have an impact, right?

Stephanie Harris (07:45):
Right. Meeting planning has always been among the most stressful jobs. I mean, you think about, it's a little bit like you perform your job publicly every single day. I know I don't want a whole bunch of people standing around, watching me do my job and criticizing every moment because their experience is directly tied to how I'm doing my job, but that's the gig people sign on for when you're a meeting planner, so it's already stressful, and now when you add on all the safety and security, all of the global issues that are happening and being in a position where there are fewer workers and particularly fewer people in hospitality, it's just the recipe for a real stressed out group of people.

Lynn Randall (08:36):
It is. There's just one more stat, and then we can move on to things that are helping to solve this, but the magnitude of this is so huge. I don't want to scare everybody off, but 89% of workers in a February 2021 HBR study said their work life was getting worse, well-being is declining, 85% of them said, and 56%, just like all of the stats we were just referencing, so their job demands have increased. It's a pressure cooker.

Stephanie Harris (09:10):
Yeah, it is, and so, of course, we got to go into solution mode here and we have to start looking at how we make the work environments more positive, less toxic.

Lynn Randall (09:23):
Without a doubt. Before we move on from the enormity of this issue, to get into solution mode, I know you're very good at it, can we focus on the last thing that you said, positive, non-toxic culture?

Stephanie Harris (09:37):
Yeah. I mean, so according to MIT Sloan Management 2022 review of conditions that are driving the great resignation and all of these issues that we're talking about, people leave their job because they have toxic workplace cultures. I mean, environments where people don't feel respected, people don't feel trusted, they feel excluded in some way, that is driving them out the door pretty fast. I mean, and it points to a little appreciation and some thank yous can go a long way. People just want to be seen.

Lynn Randall (10:21):
That brings us to the first word of your organization, The Incentive Research Foundation. I really believe that incentive and recognition programs can help with this problem. People are happier. Specifically employees who receive non-cash compensation are happier than employees who do not. I hope you have stats that support that, but I mean, who doesn't like to be awarded and rewarded?
I love to receive gifts, awards, accolades. Give it all to me.

Stephanie Harris (10:54):
Right, exactly. I mean, and in fact, we have whole studies that just look at the effectiveness, of course, of using non-cash rewards to recognize people, but at its very core, it's just human nature. When people are in environments where they are respected, where they feel like the effort that they put in goes a long way, those are environments that they want to stay in.

Lynn Randall (11:24):
Yeah, without a doubt. I talk to lots of clients all the time, our clients that InVision, and almost every single one to a person is having issues of retention, recruitment, and culture erosion. What are some of the potential solves or way that you see incentive programs helping with those big issues that our clients have?

Stephanie Harris (11:50):
Yeah. I mean, this is the moment. I keep talking about it, like this is my TED Talk for 2022. Now is the moment to walk in the door of your C-suite and establish the value of incentives, reward, and recognition, because I don't know of a C-suite that is not talking first and foremost in their meetings about how they address the talent issue. It's pervasive.
It's across every industry, and incentives are one of those things that I think a lot of organizations kind of manage out of HR, or you have your annual sales incentive program, but it never really bubbles up as a strategic driver in the C-suite. First and foremost, take the opening and start to present rewards, incentives, and recognition as both a retention driver and a strategic differentiator when you're going out and competing for talent right now. It's a great time to take a look at your rules structure and look at how you could change the structure of your program to connect with and engage more people across your organization. I mean, companies are now starting to look more and more at their culture, at defining some kind of employee value proposition because they realize how critical it is to actually get and keep and engage employees, but sometimes incentive programs can be disconnected from the core drivers of an organization because they're out there kind of happening, and the connection between, "Oh, wait a minute, these incentive programs can actually reinforce, drive, and direct people toward the very things that are most important for success of our organization." It's a really simple link to make, but when you're moving 100 miles an hour, sometimes you stop, you forget to kind of stop and look at that and make those connections.
Right now, if you look at, say you're exploring your culture and your employee value statement, it's a great time to get together and say, "Okay, do we need to get buy-in to have people return to the offices? That is strategic imperative for us? How can we use incentives to drive that? How can we use incentives to engage our newly remote workforce or our hybrid workforce?" That's a skill that not a lot of managers have, and we talk about people needing to employ discipline during this time to figure out how to best work from home or work remotely.
Managers also need to develop management skills to manage and direct people remotely. Incentives can help do that and drive those behaviors among those managers.

Lynn Randall (15:12):
Oh, so many connections back to even what we were just talking about, connections back to that toxic culture conversation. Are you ensuring that you're building a culture that's not toxic? Are you ensuring that you're engaging that hybrid or fully remote workforce? Maybe we could give some lessons stuff.

Stephanie Harris (15:31):
I think.

Lynn Randall (15:31):
Anyway. Yeah. Anyway, as brands are exploring, how do we reach this really now dispersed and maybe even a larger portion of their workforce? What are some of the ways that incentive and recognition programs can be structured to achieve that goal? You talked about looking at rule structure and inclusion. What are some tips?

Stephanie Harris (15:57):
If you're looking to really engage a broad portion of your workforce, employee recognition program, not so ... Incentive programs, I think about as tied to kind of sales, do this get that or tied to specific maybe revenue-driving behaviors, but employee recognition programs are those broad-based engagement pieces that largely can rely on items like gift cards, or merchandise, or points-based programs. Last year, we conducted a study on the psychology of points here at the IRF, and we found some really interesting things. One that, when you're giving points to reward specific behaviors among your employees, they're more memorable, they create longer-lasting touch points, and you actually get kind of three boosts of connectivity between the employee and the organization. One, when the points are rewarded to them, two, when they start to go through that redemption catalog and start that shopping.
There's like this lovely moment where they're happy and they get this kind of dose of connection to the company as they shop, and then the third time is when they have earned enough points to redeem for the reward. Points programs have this long tail about them, and you can structure it in such a way that peers can recognize one another, and I love that kind of structure because you are giving a lot of clarity across your organization about exactly what's important, exactly what behaviors the organization wants to recognize and appreciate, and then people can recognize and appreciate their peers. Managers are the other way, can come down through managers, and they can reward people for those behaviors that are important, but just adding that peer-to-peer component, I think is so great because it embeds those values in the employee and it really drives motivation and engagement.

Lynn Randall (18:28):
Yeah. There's no better pressure than the pressure of your peers around you, sort of raising the bar for you. There are two things that, the three points that you were just telling me about, the gratitude when you award, anticipation to select, and finally redeeming them, and I'm going to age myself here, but it reminds me of when I was a kid, we would get the Sears and Roebuck catalog right around Christmas time, and I'd peel back the pages and pick out which things I really wanted, and I was never better behaved than when that catalog came out.

Stephanie Harris (19:05):
So good and so true. That was such a delight.

Lynn Randall (19:07):
Yeah, absolutely. We talked a little bit about the overwhelming working conditions, first of all, and how they've changed, but this overwhelming desire to work remotely, at least part of the time. You talked a little bit about some of the other research that you've done. How can point-based programs and incentives help with what I imagine will continue to be a really changing and shifting workforce environment?

Stephanie Harris (19:39):
Yeah. They have so many applications. A well-designed program is going to link directly to those behaviors that are important to the company, things that are tied. So many firms are trying to recover from the pandemic right now. Tying what you reward directly to the actions and behaviors that fuel your recovery strategy is huge.
I mean, then you get so many people in the organization rowing in the same direction. It can have a really big impact fast, and it doesn't have to be that big, huge incentive travel reward. Again, it can be these smaller impact things. People just want to be seen, recognized, heard, and you can do that with a remote workforce by giving people the ability to reward one another, send cards, send points to people. You do start to create that sense of connectedness.
They share a common platform. There are shout outs going out on there. That makes a big difference for people. Frequency is really critical. Can't just do it once, can't do it every six months.
More ongoing connectedness is critical, because one of the biggest breakdowns that people experience when they work remotely, and again, I've been there, you just feel so disconnected to the lunches, the gatherings at the office, the sidebar conversations. It's a way to create that for those people who are remote by bringing them into the fold. We did earlier this year saying it doesn't have to be some giant, huge reward. We look at academic research on an ongoing basis at The Incentive Research Foundation, and we put a paper out in August that was looking at social exchange theory. Based on social exchange theory, we saw that people will go to significant effort to win appreciation and approval from managers, from peers, from customers.
They just need to know what's valued, and that kind of frequent, broad-based recognition really can include just items that are of token, tangible value, but it's high social value. It's you're earning those points, you get a spotlight mention in a meeting or on a platform, gift cards, time off. Small items that aren't a big expense to the company will go a really long way when you look at social exchange theory.

Lynn Randall (22:40):
I love the idea of that social exchange theory, and it's intuitive. I feel that. I know exactly what you're talking about, and I could talk to you for days, Stephanie, about the employee experience and the role of incentives and rewards within that, but we should probably keep this podcast a little less than days long, so I'll simply thank you for your wisdom and for the work of the IRF. Any parting pearls of wisdom to share?

Stephanie Harris (23:13):
Just going back to my TED Talk for the year, which is now is the time to get in front of your C-suite, to reexamine how you're using non-cash incentives and reward and recognition programs in your organization, a great place to start is by understanding your own employee's view of your company. You can very quickly identify gaps, and it can create a great roadmap for your program.

Lynn Randall (23:41):
That is an amazing pearl. I could make a ring out of that pearl, so thanks for that. Relook at your incentive and recognition programs. They might be impacting not only the employee experience, but your recruitment efforts and everything related to culture and all of the issues that are really floating to the top of mind. Stephanie, thank you for joining us, and thanks to all of you for listening in as well. Be sure to join us for the next IVC Podcast episode coming soon.