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Recognition

5 min

3 min

What's Inside Our Employee Recognition Buyer's Guide?

What's Inside Our Employee Recognition Buyer's Guide?What's Inside Our Employee Recognition Buyer's Guide?

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Don’t shop for a product, shop for a solution.

Employee recognition is a key pillar of driving your overall business performance. Finding the right tool to keep your employees engaged can be overwhelming. That’s why we’ve created an Employee Recognition Buyer’s Guide to help you make the best decision for your organization.

Our guide gives a comprehensive overview of how to choose the right employee recognition solution for your company’s culture, goals, and budget. You are the expert on your needs, and what makes your workforce unique. Complete with self-assessment worksheets, ROI calculations, platform evaluation checklists, and so much more, this guide will help you find the perfect partner.

What is a Buyer’s Guide?

A buyer’s guide helps customers make purchasing decisions. Our guide will simplify each step so you can make the best decision for your organization’s needs. We’ve broken it down into 5 simple sections:

1.     Employee Recognition Overview

2.    Organizational Needs Assessment

3.    Tips on Key Stakeholders, Timeline & Budget

4.    Platform Evaluation Worksheet

5.    Building Your Business Case

1. Employee Recognition Overview

Employee expectations have changed. Today’s leading organizations understand that money, time off, and rewards are no longer a primary driver in a desired workplace. Today’s employees expect meaningful and memorable recognition. The focus has shifted to building a strong culture through engagement, shared values, and performance-centered recognition. Our guide will walk you through the impact of employee disengagement and the benefits of a formal recognition program.

 

2. Organizational Needs Assessment

 There are many great employee recognition solutions on the market,  it’s up to you to determine which one is right for your business. Our guide includes a self-assessment worksheet that will help you decide which platform will suit your organization’s needs. Your answers to our strategic questions should help you identify the main problem you’re looking to solve. Our self-assessment exercise contains insightful topics like:

HR Challenges & Pain Points: Are you experiencing higher employee turnover than usual? What have your employees shared in recent exit interviews?

Your Current State: What are you currently doing to engage and recognize your employees? How are you measuring success?

Values & Culture: What changes would you like to see in your organization’s culture?

3. Tips on Key Stakeholders, Timelines & Budget

Many important factors go into selecting a recognition platform; key stakeholders, timelines, and budgets just scratch the surface of what to keep in mind. Our guide will help you answer all your questions in these areas, along with other crucial elements such as:

Implementation & Support: What does the onboarding process look like? Will you have continued support before and after your purchasing decision?

Integrations: Is the platform capable of integrating with your existing technology?

Who are the key stakeholders in my organization?

Deciding on an employee recognition platform impacts many parts of your organization. It’s important to identify who your key stakeholders could be in the decision-making process. In our guide, you will find key takeaways to consider when reaching out to your stakeholders about considering an employee recognition platform. It’s important to remember your HR team will have different questions and concerns than your CFO or CEO.

 

When should I launch my employee recognition program?

Our guide includes all the questions and topics you should discuss with your key stakeholders when deciding on a timeline. Whoever you choose to partner with will help you develop a realistic plan – including us! Kudos® has a team of dedicated Onboarding Specialists who can assist you in all aspects of your program launch.

 

How should I budget for an employee recognition program?

Building a budget can be difficult – that’s why our guide includes important factors to consider when evaluating quotes from different employee recognition platforms. For more solutions on building your budget, you can also read our article on Budgeting for Employee Recognition in our Resource Hub.

 

4. Platform Evaluation Worksheet

Our included worksheets make it easy for you to compare different platforms and ultimately find the right solution for your organization. You’ll be able to measure ROI, what the cost is to your organization when your employees are disengaged and use detailed checklists to keep track of the various features each platform offers.

 

5. Building Your Business Case

Even if you’ve selected a platform that satisfies all your organization’s needs, you’ll need a compelling presentation and business case for your executive team. We have included a framework for how you can present your solution to your stakeholders in a simple but informative way that will increase your chances of getting approval. These suggestions will help you create a convincing business case to win over your executive team, so you can move forward with your purchasing decision.

 

Successful organizations understand that employee recognition matters more than ever before. You’re already on the right track to creating a positive impact on your organization’s culture, and we want you to succeed in finding the right solution! Make your decision easier by downloading your free copy of our Employee Recognition Buyer’s Guide today.

Recognition

5 min

min

8 Steps for Pitching Employee Recognition to Your Executive Team

8 Steps for Pitching Employee Recognition to Your Executive Team 8 Steps for Pitching Employee Recognition to Your Executive Team

Follow this framework to make the case for an employee recognition platform in your organization.

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This is part 3 of our 3-part “Making the Case” series, dedicated to helping you make a business case for employee recognition in your organization. Make sure to check out part 1 (Budgeting for Recognition)and part 2 (Calculating the ROI of Employee Recognition).

You've done your research, determined that recognition is an excellent solution to some of your organization's biggest pain points, and found a vendor you like (hopefully Kudos®).

It’s time to pitch to your leaders to get approval.  

While this can be a nerve-wracking process, it's also an incredible opportunity to showcase your knowledge and expertise and impress your leaders with a solid business case.

In this article, we share a simple framework that will help you make a case for an employee recognition platform. That said, the framework presented can be used for virtually any business proposal.

Prefer Video? The content in this article is covered in a recent webinar you can access for free on-demand here. By accessing the on-demand webinar, you’ll also be able to download your customizable pitch deck.

Tip: Give an early preview of your pitch to a key stakeholder and get their advice and feedback. This does two things: (1) It allows you to address some issues that might come up before the larger presentation, and (2) it converts that stakeholder into a friendly face so that during the main presentation, they will already be on your side and may even jump in to answer questions from other stakeholders in the room.

Now let’s jump into the 8 steps you’ll need to cover to successfully make the case.  

1. Mission: Create context and define the problem

Capturing the attention of your audience is critical. The key to doing this is clearly explaining your mission and the purpose of your pitch. Lead with the business need, define what you’re proposing and why you’re proposing it.  

Creating a mission statement for the initiative is a powerful way to do this. In the context of employee recognition, you could say, “my goal as an HR leader is to build a thriving culture based on measurable results. To achieve a thriving culture, we must reduce turnover, increase engagement, improve performance, and provide the tools for a more inclusive and happier culture.”  

Another great way is to connect your pitch to your company’s core values. For example, you could state that although your organization values innovation, your employee recognition practices are stuck in the past.

Finally, a powerful way to set the tone for your presentation is to tell a story. Share a personal experience or anecdote that will resonate with your audience while showcasing the reason behind your proposed initiative.

2. Current State: What’s the cost of doing nothing?

When covering your organization’s current state, it’s crucial to create a sense of urgency.

Clearly illustrate that things are changing beyond the control of the company, and there will be winners, and there will be losers. This sets the stage for your leaders to want to be winners, and that not addressing these outside forces will cause the business to become less competitive unless they find a way to navigate these shifts effectively.  

Another important component of this is the cost of doing nothing.

In the second article from this series, we present how to calculate the cost of absenteeism, turnover, and disengagement.  

Using hard data like those numbers is a great way to demonstrate where you are today, where you want to go and how you’ll measure success. Comparing your organization to your competitors using benchmark data is also a great way to capture your executive team’s attention.  

Clearly describe how the problem presented affects the business and impedes corporate success. Bring in actual data from your organization. When you finish this section, your audience should be convinced that doing nothing is not an option and should be eager to hear your proposed solution.

3. Future State: What does success look like?

What exactly are you hoping to achieve? How will you measure success with your proposed solution?

These are questions you need to answer in this section of your presentation.  

Another way to approach this section is to consider what outcomes you’re looking for and the drivers that can get you there.

What is the one most important thing that your manager or company could do to make a meaningful and far-reaching positive impact? In the case of employee recognition, you want to demonstrate that you’ve considered all possible options (or drivers) but have determined that recognition is the best solution to achieve your organization’s specific goals.  

Describe the approach you’re proposing and the known benefits of that approach.

4. Solution: How will you make this happen?

Now is the time to make your specific strategic recommendation. You’ve answered what will get you there; now it’s time to answer how.

This is where you propose your preferred vendor.

When recommending a vendor, it’s essential to show that you’ve compared various solutions to make the most strategic choice for your organization.

For employee recognition software, make sure to show that you’ve compared important features, including: Price per user, Rewards Markup, required integrations, support, analytics, mobile application, are rewards optional?

Show that you’ve done your homework, identified the most important qualities in a vendor, reviewed multiple options, and have a decision matrix that led you to your recommendation.

This Buyer’s Guide is a great resource; it includes an employee recognition vendor comparison checklist.

5. Cost: What budget needs to be allocated to this?

Once you recommend a concrete solution, the next thing you’ll need to address is the cost.

When approaching cost, a good starting point is to share benchmarks. For example, for modern employee recognition programs, the key cost benchmarks are:

  • Low: Under 1% of base salary
  • Average: 1-3% of base salary
  • Above Average: 4-10% of base salary

Next, present the actual cost of your proposal. Our budgeting spreadsheet is an excellent tool for this step. Following the spreadsheet will ensure that you consider all inputs such as your employee count, whether you’ll be including rewards and additional fees. Using the spreadsheet will allow you to show that you’ve compared vendors based on the total cost of ownership and are presenting the actual cost difference between your proposed solution and its competitors.

6. Financial Benefits: What’s the Impact?

Demonstrating the bottom-line impact of your proposal is often the most impactful part of the presentation.

The good news is that the financial benefit or ROI is undeniable with the right metrics when it comes to employee recognition platforms.

The ROI formula itself is relatively straightforward, and many of the required metrics should be readily available to you (e.g., turnover rate, engagement survey results, and absenteeism rate). You can see a step-by-step walk-through of how to calculate ROI here.

Beyond the ROI, demonstrating that your chosen solution has worked for other organizations is a powerful way to further support your case to a risk-averse executive team.

Examples you can use include:

  • Case studies
  • Client testimonials
  • Awards won
  • Product Reviews

7. Action Plan: How do we make this happen?

A vital component of a business proposal or business case is to present what your solution will look like in practice.

Make sure your presentation identifies the internal champions (likely yourself) and that you have buy-in from the most critical stakeholders for this initiative, for example, in the case of employee recognition, the CHRO, or Head of People (if that’s not you).

Ask your preferred vendor for an implementation plan and timeline so you can accurately predict and plan for a suitable go-live date.

8. Decision: Don’t forget to ask for Approval

This part is the simplest but most often overlooked step. After working through your presentation, and answering any questions along the way, don’t forget to ask for permission to proceed with the initiative.

If your executive team indicates that they need more time to make their decision, make sure to immediately schedule another time to ask for the decision again.

Reminder: The content of this article is covered in a recent webinar you can access for free on-demand here. By accessing the on-demand webinar, you’ll be able to download a customizable pitch deck.

Final Advice

Equipped with accurate budgeted costs, a persuasive ROI, along with a compelling and easy-to-follow presentation, you’ll be well on your way to getting the approval you are looking for to move forward with your plan.  

Remember that if you are confident and committed to your proposal, you’ll foster confidence within your executive team. They want a reason to say yes; it’s up to you to make the case.  

ROI

5 min

min

Calculating the ROI of Employee Recognition

Calculating the ROI of Employee Recognition Calculating the ROI of Employee Recognition

Calculating ROI can be a daunting task, but following the steps presented in this article should demystify the process. With the ROI in hand, you'll be well on your way to impressing your leaders with the undeniable benefits of an employee recognition platform.

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This is part 2 of our 3-part “Making the Case” series, dedicated to helping you make a business case for employee recognition in your organization. Read part 1 (Budgeting for Recognition) and part 3 (8 Steps for Pitching Employee Recognition to Your Executive Team).

HR leaders carry a lot of responsibility.

They manage their organization's most valuable (and most expensive) asset - their people. Luckily, many tools in the market are designed to help HR leaders with their many responsibilities. These tools include HRISs (Human Resources Information Systems), recruitment tools, and, more recently – modern employee engagement solutions, like employee recognition platforms.

While relatively new to the market in the last ten years, employee recognition platforms bring a host of benefits that align an organization's historical employee engagement practices with the expectations and needs of today's workforce. These platforms take traditional recognition practices like years of service programs or annual top-performer programs to a place that benefits all employees, every day. This increases the impact, reach, and equity of the programs by ensuring that no one is left out or left behind.  

Unfortunately, because social employee recognition platforms are a new concept for many leaders, demonstrating the impact and business case to executives can be a challenge for HR teams.  

The good news is that the bottom-line impact of employee engagement and recognition is undeniable with the right metrics.

Recently, Kudos®’ Founder and Chief Customer Officer Tom Short, and Kudos®' Director of Sales, Cheryl Smith, hosted a workshop to help walk HR professionals through how to demonstrate the ROI of employee recognition. We encourage you to watch a recording of the webinar here or read on to learn from the simple ROI example Tom and Cheryl shared.

Demonstrating the Need

The first step in understanding the value of your recognition program is to demonstrate the need and urgency to your leadership team.

When we consider recognition, the key benefit is increased employee engagement. But why is employee engagement so critical?

Employee engagement is quite possibly the most critical factor to a successful business. Gallup has done countless studies on the benefits of employee engagement, including increased profitability, more customer engagement (higher Net Promoter Scores), and improved productivity. Gallup has also found that enhanced employee engagement reduces costly trends such as absenteeism, turnover, production defects, and safety incidents.

But to make the case for investment in employee engagement, you need to be able to explain what disengagement is costing your organization today.  

As the famous saying by author and management guru Peter Drucker puts it, “if you can’t measure it, you can’t improve it.”

To present a compelling business case, you need to quantify your existing state when it comes to metrics you want to improve. These are called Key Performance Indicators, and the three examples that we’ll explore more in-depth are:

  1. Absenteeism
  1. Turnover Rate
  1. Disengagement

  1. Cost of Absenteeism:

Absenteeism is any failure to report for or remain at work as scheduled. Absenteeism does not include scheduled vacation, PTO, or sickness, but rather an unexpected/unplanned absence. The absenteeism rate is calculated by taking the number of absent days and dividing it by the number of available workdays in a given period. The average absenteeism rate in the US is approximately 3.1% which translates to 64 hours per employee per year. For reference, a healthy rate is 1.5%. Absenteeism is caused by many factors (stress, lack of motivation, disengagement, workplace conflict, and more.)

According to workforce specialist Circadian, unscheduled absenteeism costs roughly $3,600 per year for each hourly worker and $2,660 each year for salaried employees. The costs can be attributed to many factors, including:  

  • Wages paid to absent employees
  • High-cost replacement workers (overtime pay for other employees and/or temporary workers)
  • Administrative costs of managing absenteeism

  1. Cost of Turnover

Next, let’s consider the cost of employee turnover. Turnover can be both voluntary (leaving for another job) and involuntary (when someone gets let go). Both have a significant financial impact on organizations.

We are now experiencing the Great Resignation, a staggering trend of post-pandemic resignations. The Economist reported that a record 3% of the workforce in the US quit their jobs in September 2021.  

According to a study released in August 2021 from the National Business Research Institute, employees' average annual turnover rate across industries in the United States is 15%. The cost of turnover can range from 20% for a mid-level manager to 200% for a C-Suite Executive.

  1. Cost of Disengagement

Gallup found that 74% of people looking for a new job today are disengaged, “It's not an industry, role, or pay issue,” Gallup’s team says, “it's a workplace issue.” So, let's look at engagement and specifically the cost of disengaged employees.

According to Gallup, disengaged employees have 37% higher absenteeism, 18% lower productivity, and 15% lower profitability.

In their book Follow this Path, authors Curt Coffman and Gabriel Gonzalez Molina estimate that a disengaged employee costs a company 34% of their annual salary, or $3,400 for every $10,000 they make.  

Recognition as a Solution

Evidently, the cost of disengagement as well as two of the most common byproducts of disengagement (turnover and absenteeism), are substantial, but there are many things employers can do to address these challenges. Presenting recognition as a solution and demonstrating the ROI is a great way to show your leadership team the value of your proposal.

While there are many ways to increase employee engagement, research by Cicero found that recognition is a highly effective solution.

Calculating the ROI

Using the three costs described above (Absenteeism, Turnover, and Disengagement,) simple plug-and-play equations can lead you to a powerful ROI presentation.  

To illustrate this, we will use a hypothetical situation below that reflects many organizations. This example is described in more detail in the webinar recording.

ROI Formula

To calculate the ROI using the formula above, we need two numbers, Total Savings (based on the achievement of the goals above, and Total Investment based on the number of employees (1000).

Calculating Total Savings

Absenteeism Savings = $41,230

Based on the costs we discussed previously, we can calculate the absenteeism cost savings based on 1000 employees. The savings reflect a shift from a 3.1% absenteeism rate (today’s standard) to a 1.55% absenteeism rate attributed to increased employee engagement through the recognition program.  

Turnover Savings = $500,619

The turnover cost reflects the average cost of turnover for a mid-manager making $60,000/year (20% of $60,000 = $12,000) + the cost of onboarding a new employee, which ADP estimates are about $4,129. In this example, we have used a modest turnover improvement year over year of 3%. (15.9% decreased to 13.9%).

Disengagement Savings = $408,000

Finally, the cost of disengagement was calculated as 34% of the same average salary of $60,000. The Future state represents a modest 2% improvement in employee engagement.

 

Now, we add Absenteeism Savings + Turnover Savings + Disengagement Savings to get our total savings.  

Total Savings= $949,849

 

Calculating Total Investment

A Conference Board of Canada study, “Making it Meaningful: Recognizing and Rewarding Employees in Canadian Organizations,” suggests that the average annual amount spent on recognition is $175 per employee.  

So, using that average figure, we can estimate our investment for a company of 1000 people:
Recognition & Reward Investment = $175.00 per person x 1000 employees = $175,000

Total Investment = $175,000

Final ROI Formula

The results of this calculation are undeniable. A 443% return on investment is fantastic and awfully hard to ignore as a business leader. The best thing about the ROI of employee recognition specifically is that with regular, meaningful recognition, the returns will continue to grow as a strong culture of recognition develops.

Once again, if you would like a walkthrough of these calculations, we strongly encourage you to watch this helpful webinar, where you can download the slides to reference when creating your own ROI estimation.  

Key Takeaways

Calculating the ROI to help support the case for a significant investment can be a daunting task, but following the steps presented in this article should demystify the process and get you well on your way to blowing your leaders away with the hard numbers.  

As a recap, the steps are:

  1. Identifying Desired Outcomes (e.g., lower turnover)
  1. Identifying Relevant Metrics (e.g., turnover rate)
  1. Quantify Costs and Set improvement goals (e.g., turnover costs 20% of the employee's salary, we want to reduce by 5%)
  1. Demonstrate the impact on the bottom line (e.g., a recognition and rewards program will cost us $175 per employee per year but reduce our turnover by 5% saving us XYZ amount)

Need some help? Reach out for support building your plan – we are here to help!

ROI

5 min

min

Budgeting for Employee Recognition

Budgeting for Employee Recognition Budgeting for Employee Recognition

How do you build a comprehensive budget for a new recognition program? How do you make sure you're comparing different solutions "apples to apples"? We asked the experts those questions and more to equip you with everything you need to build your budget.

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This is part 1 of our 3-part “Making the Case” series, dedicated to helping you make a business case for recognition in your organization. Read part 2 (Calculating the ROI of Recognition) here and part 3 (8 Steps for Pitching Employee Recognition to Your Executive Team).

Today's organizations are overwhelmingly finding that to compete in today's competitive labor market and retain great employees, they must strengthen their employee experience holistically through unique benefits, flexibility, and proactive employee engagement initiatives. One proven way to enhance employee engagement is through regular, meaningful recognition. The benefits of employee recognition programs are undeniable and plentiful.  

When proposing employee recognition solutions, HR leaders are often tasked with building a budget for an enhanced program to get executive buy-in.  

So how do you build a comprehensive budget for a new program from scratch?  

How do you make sure you're comparing different solutions "apples to apples" to get a clear picture of which solution is best for your needs?  

Recently, Kudos®' CFO, Karim Punja, and Kudos®' Director of Sales, Cheryl Smith, hosted a workshop to help HR professionals answer the questions above and more. We encourage you to watch the webinar here, or read on to learn all the insider tips and tricks shared.

Recognition’s Impact

Before digging into the actual budgeting exercise, it's important to level-set on why you're considering bringing in an employee recognition platform so you can contextualize your budget with a legitimate need and urgency.

“Doing what’s best for your employees does not contradict doing what’s best for your company,” Cheryl Smith, Director of Sales at Kudos®, explains. The Gallup Q12® Meta-Analysis is a fantastic resource to reference when building your case for the importance and impact of recognition. Here are some highlights:

8 benefits of recognition are displayed. They are discussed below.
  1. Recognized employees are more engaged employees. When employees feel acknowledged and appreciated by their place of work, they are more likely to develop the mental and emotional connections needed to be engaged. Learn more.

  2. Enhanced engagement leads to lower absenteeism and reduced turnover. Research has repeatedly shown that employees who feel valued are less likely to leave their employer. Learn more.

  3. Employee recognition drives a stronger workplace culture. Besides incentivizing achievement, employee recognition gives employers the ability to reinforce behaviors they find valuable. Learn more.
  4. Employee recognition is important for inclusion. Creating a workplace environment where employees feel valued, welcome, and comfortable will foster a sense of belonging, psychological safety, equity, and general well-being. Learn more.
  5. Employee recognition drives employee performance and productivity and business performance overall. Humans have an innate need to be seen by and receive praise from others, and employee recognition does just that. Organizations with employee recognition programs are 12x more likely to have strong business outcomes. Learn more.

Building Your Budget

Benchmarks

With all of the value that employee recognition and engagement provides in mind, it’s now time to build your budget.

“The key number from the CFO’s perspective is the total cost of ownership,” says Karim Punja, CFO at Kudos®. The following is designed to help you understand what key inputs and cost drivers make up that total cost so you can build an accurate and comprehensive budget.

3 budgeting benchmarks discussed below are displayed.

Starting with benchmarks of how much today’s organizations invest in recognition and rewards provides your decision-makers with something to compare your proposal to. The benchmarks provided in this overview are for comprehensive recognition programs, like Kudos®.  

Beyond helping with your proposal, these benchmarks can help you assess how your current recognition budget compares to others and give you a place to start if this is a net new program and initiative. Keep in mind that many organizations migrate legacy “years-of-service” awards and annual recognition programs to their modern recognition system, so those costs are included in these benchmarks.

Current Benchmarks (per employee recognition budget benchmarks):

  • Low: Under 1% of base salary
  • Average: 1-3% of base salary
  • Above Average: 4-10% of base salary

The Six Key Budget Inputs  

✓ Employee count: Because you’re building your budget on a per-employee basis, this number is critical to an accurate proposal. Consider the exact size of your organization, whether it spans multiple regions, and whether there are various kinds of employees to consider (contract, field, temporary, interns). Larger organizations with multiple departments and regions might opt for a sequential implementation where, for example, a specific geography or division would start, then other groups would join in over a year or two. The timing of a staggered launch would have to be considered to make sure the budget is attributed at the right time.

✓ Rewards or no rewards? Some vendors will give you the option of running your recognition program platform with or without monetary rewards and points. Some costs to consider are whether points need to be purchased in advance, if rewards are marked up, and the fulfillment costs of physical rewards. Hint: With Kudos®, rewards are optional. Kudos® also never marks up points and rewards. You are in complete control of your budget!

✓ Expected recognition and rewards budget per employee/year: Determine what you intend to spend on your program using the benchmarks above. You can also use the amount you’re spending on your current recognition/years of service program. For example, if you’ve recently moved to a remote work format, you could reallocate the budget from the expensive parties and receptions you’re no longer hosting.  

✓ Budget timeframe: Budgets are usually based on one fiscal year. Your CFO will likely want to know, beyond the fiscal year budget, what the total cost of ownership is for the program and the total cost of the agreement. For example, if you’ve committed to three years, fees for all three years would be included in your total cost of ownership. The total cost of ownership also consists of any additional resources required to run the program, such as staff time.

✓ Hidden fees: It’s essential to work directly with vendors to understand all fees and costs regarding rewards, markups, or fulfillment costs and any other resources you require. Your budget proposal should include a plan for who will manage this program (including one or two alternates.)

✓ Implementation & support: Ensure you understand the onboarding and launch process, including any information technology (IT) support needed. Your CFO needs to consider the opportunity cost of using IT resources for this project rather than another, so providing that information upfront is extremely helpful.  

Your Budgeting Workbook

While all of this may seem overwhelming, the right vendor will be able to walk you through this process, making it painless and straightforward. To help, Kudos® has a prebuilt Employee Recognition & Rewards Budget Planner that you can download here.  

The webinar recording previously mentioned walks through how to use the budget planner workbook.  

The workbook contains three helpful sheets:

  1. Business Details (the initial set of inputs for the budgeting process), if rewards are marked up, and the fulfillment costs of physical rewards. Hint: With Kudos®, rewards are optional.
  2. Advanced Business Details
  3. Budget Worksheet (summary) which provides a nice output schedule of budget costs over a three-year period

Here is a preview:

Preview of budgeting spreadsheet
second preview of budgeting spreadsheet

Bringing It All Together

Budgeting is a tedious but extremely valuable business process that allows you to make significant strides in your work. Launching a formal recognition program is often a career-defining move for many HR professionals – it requires work and dedication, but the results are undeniable.

Finally, remember that this is the starting point. Depending on your organization's structure, policies, and needs, there can be nuances. This overview captures the baseline budgeting information needed for an employee engagement and recognition system.  

Once again, we strongly encourage you to watch Kudos®' CFO, Karim Punja, and Kudos®' Director of Sales, Cheryl Smith's budgeting workshop here. If you need any assistance building your recognition program budget or learning more about the value of recognition and employee engagement systems, please reach out to the Kudos® team.

ROI

5 min

min

Putting Clients First: SOC 2 Compliance in HR Tech

Putting Clients First: SOC 2 Compliance in HR TechPutting Clients First: SOC 2 Compliance in HR Tech

SOC 2 compliant organizations have gone through rigorous external audits to ensure they have the infrastructure, tools, and processes to keep your data safe. To explain the impact and importance of SOC 2 compliance, Henry Maphosa, Director of Technology at Kudos®, answered some questions about this important certification.

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When considering and comparing vendors in the HR/Worktech space, one critical factor should be the security and privacy of employee data within the system.

So, what should you look for to ensure your data is safe and secure?

One way is to seek out a vendor with SOC 2 accreditation or what's more commonly referred to as a "SOC 2 compliant company". Kudos® understands the importance of your data and information and is proud to have this accreditation.

To explain the impact and importance of SOC 2 compliance, Henry Maphosa, Director of Technology at Kudos®, answered some common questions about this important certification.

What is SOC 2 Type 2 Compliance?


SOC 2 is a voluntary compliance standard for service organizations, developed by the American Institute of CPAs (AICPA), which specifies how organizations should manage customer data. The standard is based on the following Trust Services Criteria: security, availability, processing integrity, confidentiality, privacy.

Being SOC 2 compliant assures customers and clients that a vendor or partner has the infrastructure, tools, and processes to protect their information from unauthorized access both from within and outside the firm.

Why is SOC 2 compliance important to Kudos® Clients?


“We recognize the importance of this report and its usefulness to clients,” says Henry. “It’s recognized by procurement, security, legal, and privacy teams. Essentially, the report contains anything you’d like to, and need to, know about us a vendor.”

In his role as a Director of Technology, Henry often evaluates software systems and tools himself, so he understands the importance and practicality of this certification firsthand. “If a company does not issue a SOC 2 report, it could raise questions regarding the controls they have in place or their commitment to security and compliance as an organization,” explains Henry. “It also means more time spent investigating their security practices.”

For Kudos® clients, SOC 2 compliance indicates that they’re partnering with a provider who meets rigorous standards. Henry adds, “because this report is an independent validation, you get more assurance that we do what we say we do from a security, privacy, and compliance perspective.”

Why is SOC 2 compliance especially crucial in the HR Tech Space?


Software and vendors in the HR/Worktech space often store personally identifiable information (PII) like names, phone numbers, or even SSN numbers. Some platforms also hold confidential business information like HR budgets or company goals which are especially vulnerable and critical to protect.

For Kudos®, SOC 2 compliance assures HR leaders that any information input into the Kudos® platform, including individual personal profile information and the contents of recognition messages, is all secure and private.

Henry ends by stating that given the sensitivity of personal data involved in all aspects of Human Resources Management, “SOC 2 compliance is critical for Kudos® to demonstrate our commitment to supporting and protecting our clients.”

Data Security & Kudos®


Kudos® is committed to providing clients with the highest level of security assurance and has officially completed its SOC 2 Type 1 Compliance and Certification. Kudos® completed the independent platform and systems compliance audit with zero exceptions, meaning all controls were designed effectively.

If you’re currently evaluating employee recognition systems and would like to learn more about the importance of security and privacy, please do not hesitate to reach out.

Performance

5 min

min

Choosing Strategic Core Values and Assigning Qualities (4 Simple Steps)

Choosing Strategic Core Values and Assigning Qualities (4 Simple Steps)Choosing Strategic Core Values and Assigning Qualities (4 Simple Steps)

Corporate values are a powerful tool and should be top of mind for HR professionals and Leaders. The right values have the power to connect your entire workforce and drive everyone toward a shared goal.

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These are some of the most popular corporate values, according to a recent MIT study. But what’s the intention behind choosing those common values (and others)? Do they matter? Are they essential?

In short - yes.

Corporate values are a powerful tool and should be top of mind for HR professionals and Leaders. The right values have the power to connect your entire workforce and drive everyone toward a shared goal. But to get there, you must align your corporate values to your strategy and into daily life within your organization. That’s why values are such an integral part of the Kudos® employee engagement and recognition platform.

When values are distilled down from broad, aspirational statements to clear behaviors or qualities, employees are equipped with clear expectations of which behaviors will enable them to do their jobs in a meaningful and valued way.

Why Should HR Professionals Care about Values?

  • Values define your employer brand, or “what it’s like” to work for your company to prospective employees.
  • Clear values help HR and hiring managers understand who will be a good fit for the company.
  • Values and associated behaviors allow for simpler performance management and measurement – employees and managers are all working toward the same goals.

Why Should Organizational Leaders Care about Values?

  • Values can put your business strategy into action and align employee efforts to business goals, improving productivity and results.
  • Values also serve as a roadmap, guiding employees in making decisions in day-to-day tasks. This can be especially helpful in organizations where employees work remotely, with less supervision or guidance readily available.
  • Values can drive and align decision-making, hiring, communication, and other business processes.

Whether you're preparing to launch the Kudos® platform in your organization, or simply looking for a way to improve and align your culture toward your business goals, these four steps will guide you in optimizing your corporate value strategy:

Hint: Depending on your situation, you may already have your values established and can start at step 3, but taking the time to revisit and refresh values periodically is always a good idea.

"MIT found a strong correlation between financial performance and the degree to which employees believed their company’s values were being practiced."

STEP 1: Understand and Define Your Business Strategy and Goals

Every business has a strategy. It’s how your organization plans to achieve success. Do you know what your organization is trying to achieve and how?

Google’s strategy is, for example, based on differentiation, specifically developing unique capabilities fueled by constant cutting edge innovation - basically doing things no one else does. Alternatively, shoe retailer Zappos’ strategy is to be the company with the best customer service - it would make sense for their values to differ from Google’s.

Strategic planning at the highest level should always include a conversation about values and culture strategy. On average, 50-60% of Fortune 500 companies' business spending is allocated to labor – that human capital has to be aligned with your organization’s strategy and goals – and the right values can do that. MIT found a strong correlation between financial performance and the degree to which employees believed their company’s values were being practiced.

STEP 2: Determine Which Values Align with Your Business Goals

Chances are, you already have a set of corporate values described on your company website. But do they truly align to your business strategy and goals?

When outlining values, they should be simple and easy to understand versus overly general or aspirational. Unfortunately, according to research by Gallup, only 23% of employees strongly agree that they can apply their organization's values to their work every day.

Hopefully, your values align with your goals, strategy, and mission, but if they don’t, it might be time to coordinate a strategic initiative to update them. Here’s a comprehensive list of core values for inspiration.

Some companies choose to ignore the title of values altogether. Google refers to its values as “Ten things we know to be true,” which includes statements like “focus on the user and all else will follow.” and “fast is better than slow.” Zappos in turn refers to their values as a “way of life,” with strategically aligned values including “deliver WOW through service” and “create fun and a little weirdness.”

Take the time to choose values that make sense – that's the only way employees will adopt them in a sustainable way and create the culture you’re striving for to achieve your goals.

"23% of employees strongly agree that they can apply their organization's values to their work every day."

STEP 3: Assign Specific Behaviors/Qualities to Each Value

With your strategic core values in hand, the third step is defining what those values look like in action through distinct behaviors or qualities.

Identifying specific behaviors tied to each value allows your team to see your values as their “North Star,” guiding them in making decisions in day-to-day tasks. This can be especially helpful in organizations where employees work remotely, with less supervision or guidance readily available.

In the Kudos® platform, every recognition message sent includes the specific qualities the person being recognized has displayed – all of which are tied back to your corporate strategy (Step 1.)

In continuing with our examples of Google and Zappos, the qualities associated with the value “fast is better than slow” in Kudos® could be “fearlessness,” “bravery,” and “urgency,” and the qualities associated with “delivering WOW through service” at Zappos could be “humility,” “attention to detail,” and “understanding.”

Here are some more examples with more traditional values:

company core values chart

STEP 4: Implement Your Values Strategy Through Recognition

Finally, having strategically aligned values and corresponding behaviors won’t serve you unless you have a plan of action. One straightforward and incredibly effective way to do this is through recognition. Simply put, when employees are recognized for a specific action, they’re more likely to repeat it in the future. Explicitly tying recognition to company values helps sync company and employee principles even further.

But how?

That’s where the Kudos® platform can help.

Tying performance measurement and recognition to your corporate values enables you to build a resilient workforce with a robust culture, laser-focused on what matters most to your organization. What’s more, relating all actions and decisions to your core corporate can improve your business performance.

With Kudos®, specific value-tied qualities must be associated with each recognition message, keeping them top of mind and eventually leading to a culture that supports the behaviors and qualities that drive better performance. If an employee is recognized on Kudos® every time they perform well, they will continue to operate this way. Likewise, when colleagues see that recognition on the Kudos® platform, they will understand what they need to do to be successful at work and grow in their role, and receive public recognition along the way. A culture of recognition built through Kudos® will lead to a high-performing culture. Aligning your values to recognition is a simple, but powerful tool to achieve your results.

Here’s what this looks like in action, using the Google and Zappos examples:

Google Values Alignment
Zappos Values Alignment

Moving Forward with Strategic Values

One benefit of rolling out your values strategy with Kudos® is that if your business strategy changes or you notice issues with your culture, you can easily update your values and begin recognizing employees who are living the new values to quickly affect change.

Identifying values and assigning behaviors and qualities can help you create a happy, focused, and performance-oriented culture. When company culture aligns with core values, remarkable things can happen.

Schedule a call with Kudos today to discover how we can help! Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce.

Success Stories

5 min

min

Nonprofit Cultural Vistas Turns to Culture and Recognition to Compete in Today’s Labor Market

Nonprofit Cultural Vistas Turns to Culture and Recognition to Compete in Today’s Labor MarketNonprofit Cultural Vistas Turns to Culture and Recognition to Compete in Today’s Labor Market

The American nonprofit organization Cultural Vistas believes that "understanding our evolving world is the first step toward changing it." This philosophy is the driving force behind Cultural Vistas' work.

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CLIENT PROFILE

Company Name: Cultural Vistas

Industry: Non-profit Organisation

Head Office: Washington, D.C. & Berlin

Kudos® Champion: Laura Gross, Director of Administration, People + Culture

Key Takeaways:

  • Culture is a strategy (good cultures can overcome change)
  • Systems create consistency (monthly awards give employees something attainable to work toward)
  • Employees care about more than just salary (they want to support a global mission and vision through shared values)
  • Employee recognition through Kudos® is a valuable employee benefit


Nonprofit Cultural Vistas Turns to Culture and Recognition to Compete in Today’s Labor Market

Changing the World Through Experience

The American nonprofit organization Cultural Vistas believes that "understanding our evolving world is the first step toward changing it." This philosophy is the driving force behind Cultural Vistas' work. They facilitate internships, professional exchange programs, and services for visitors coming to the U.S. and for American students and professionals seeking experiential learning opportunities abroad. Founded in 1963, Cultural Vistas offers over 30 unique exchange programs and partnerships with more than 130 countries. They believe that international professional experiences create more informed, skilled, and engaged citizens by equipping the next generation of global leaders to solve complex challenges by connecting lives to exchange knowledge, values, and perspectives.

This challenging but rewarding vision requires a lean team of passionate and hardworking employees to get the job done. Before the 2020 pandemic, Cultural Vistas had offices in Washington, D.C., New York City, and Berlin, with board members and stakeholders worldwide.

In an interview with Laura Gross, Director of Administration, People + Culture at Cultural Vistas, she explained, "Generally, a lot of people on our staff have lived abroad or grew up abroad, speak other languages, and are very curious about the world. They understand the value of interacting with different people's perspectives and ways of life and have a broader understanding of how to connect with other people."

A Global Shift

Unsurprisingly, when the pandemic hit in 2020, all exchange programs were frozen due to international travel bans leading to a halt on global movement. Like many organizations worldwide, all Cultural Vistas’ employees transitioned to working from home. Laura and her team were faced with the challenge of maintaining employee engagement within their fully remote workforce.

The challenge to maintain culture and engagement remotely was especially critical for nonprofits. Laura explained, "As a nonprofit, we don't have the highest, most competitive salaries; we need to find other ways to add value for our employees." And this is a common trend - Cultural Vistas is not alone in the struggle. Salaries at nonprofits are often not competitive with those offered by private-sector corporations.

The stakes for maintaining the passion and drive that brought employees to Cultural Vistas in the first place are much higher given today's competitive job market. Fostering a culture that celebrates the mission and vision that attracted employees to their roles is imperative now more than ever. Recognizing the impacts of employees' individual and collective efforts is also critical to keep employees happy in their nonprofit roles.

Embracing Change and Recognizing Achievement

With culture and employee engagement top of mind, the team at Cultural Vistas focused on fostering a virtual environment just as enriching as their previous office life to keep employees happy and passionate about the cause.

The social committees from the different offices quickly merged into one powerhouse committee, made up of employees from all departments and levels, holding weekly meetings that anyone could hop into and share ideas. This resulted in a variety of virtual events ranging from art classes to trivia nights to pet-show-and-tells.

But of course, beyond social cohesion is another critical aspect of engagement – employee recognition.

That’s where the platform Kudos® came in.

Kudos® is an employee engagement, culture, and analytics platform that fosters peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance.

Cultural Vistas decided to implement monthly awards using data from Kudos® to help their employees see the impact of their contributions. Each month, three people are awarded:

  1. The person who received the most recognition messages on the Kudos® platform
  2. The person who sent the most recognition messages on Kudos®
  3. The person who was recognized on Kudos® for displaying the most qualities related to Cultural Vistas corporate values.

The last award is perhaps the most powerful and something unique to the Kudos® platform. Every time someone sends a recognition message to a colleague on Kudos®, they also select which qualities the person they’re recognizing has displayed. These qualities are directly tied to the organization’s values – something essential for nonprofits that often have unique and distinct values and missions.

And, of course, the rewards offered within Kudos® don’t hurt.

Laura explained that because of the challenge of competing with the private sector for talent, the casual financial incentive of Kudos® points helps. In Kudos®, employees earn points that they can redeem for gift cards or other custom rewards chosen by the organization. A typical employee will earn hundreds of dollars a year in rewards through Kudos®.

It’s a program that they are proud of.

“We’ve added the Kudos® platform into our official benefits offerings,” says Laura. “It’s promoted and discussed in offer conversations as both a cultural and financial inventive.”

Screen Shot 2021 08 16 at 3.04.44 PM

A recognition message within the Kudos® platform, where users select specific qualities to recognize.

The Vistas are Bright

"In a surprising twist, a global pandemic that jeopardizes the future of our entire field has also boosted staff morale," shares Laura. "Before the pandemic, there were three distinct office cultures, based on geography. Now that we're all working remotely, it's equalized the experience of being an employee at Cultural Vistas - we all have collaborated so much more organically and naturally than before."

Recent Pulse surveys indicate that the number one thing the employees like about working at Cultural Vistas is the team – a great sign that the effort is working. Simply put, "a happy community of people is good for business," says Laura.

"Our staff is a passionate, dedicated, really hardworking group. They care a lot about their participants’ experiences abroad, but they also care a lot about their coworkers’ experiences, and they work together as a team. There's a lot of shared drive and passion. It's a really great group of people to work with."

So, while the competition to attract and retain top talent will likely forever be a challenge for nonprofits like Cultural Vistas – they can still compete with higher-paying for-profit counterparts by operating in a nimble and employee-centered way. With a strong culture and emphasis on employee engagement through tools like Kudos®, the right employees will feel at home at Cultural Vistas, no matter where they are on the globe.

Recognition

5 min

min

How Employee Recognition Can Fight the Great Resignation

How Employee Recognition Can Fight the Great ResignationHow Employee Recognition Can Fight the Great Resignation

Employee turnover is on every HR leader’s mind these days as people leave their jobs at an unprecedented rate. So, what’s going on? And what can organizations do to curb this costly trend?

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Summary:

Employee turnover is on every HR leader’s mind these days as people leave their jobs at an unprecedented rate. So, what’s going on? And what can organizations do to curb this costly trend?

In the following, we explore:

  • What’s causing the “Great Resignation”?
  • Why does employee retention matter?
  • Why recognition, not money, is the answer.
  • What a successful recognition program looks like.

How Employee Recognition Can Fight the “Great Resignation”

It’s all over the news – employees are leaving their jobs in droves. HR Leaders are struggling with unprecedented rates of turnover and a competitive war for talent.

"This Great Resignation is due to employees rethinking what work means to them in a post-pandemic world."

And it’s true; the numbers are truly staggering. Gallup recently reported that 3.6 million Americans resigned in May 2021 alone, leading to a record-high number of unfilled positions. This was in all job categories across all industries. They’re calling it the Great Resignation. NPR explains that this Great Resignation is due to employees rethinking what work means to them in a post-pandemic world, how they are valued, and how they spend their time.

Some are leaving to avoid returning to the office, having enjoyed the flexibility remote work brought to their lives by eliminating lengthy and stressful commutes. And of course, some turnover can be attributed to people who waited for things in the world to calm down before making a job change.

But HR professionals are witnessing another interesting trend emerge from this wave of departures.

The people who are leaving are disengaged. In fact, Gallup found that 74% of people looking for a new job today, post-pandemic, are disengaged, “It's not an industry, role, or pay issue,” Gallup’s team says, “it's a workplace issue.” Employees are first and foremost now seeking a workplace that meets their needs in terms of flexibility but also one that makes them feel valued and appreciated.

Why retention matters

Simply put, when employees leave, it costs a lot.

The actual financial cost of turnover varies by role and industry. Still, the general rule of thumb is that replacing workers requires one-half to two times the employee's annual salary. This includes the cost of time, money, and resources it takes to offboard, recruit, and onboard.

HR professionals and leaders also need to consider the opportunity cost of recruitment, interviews, and onboarding. When employees take time away from their roles to interview, prepare offers, and train, they take efforts away from their jobs and projects and initiatives that could help generate income for the organization.

What’s more, saying goodbye to high-performing long-term employees means letting go of valuable historical knowledge, which often helps with onboarding new employees and providing excellent customer service. By the same token, when employees have long-term relationships with clients, their departure can be disruptive and sometimes jeopardize a client relationship, in some more severe cases.

Finally, turnover can affect morale and culture through resentment of the time spent on recruitment and onboarding, close friends leaving, and a constant inflow of new colleagues. Long-term relationships between colleagues foster trust, respect, and support, which directly impact employee engagement. Research consistently shows that when employees have friends at work, they perform better, and the culture improves.

Does more money and rewards motivate people to stay?

In short, no.

In Gallup’s most recent report on the so-called great resignation, they found that, on average, it takes more than a 20% raise to lure most employees away from a manager they feel engaged with. In contrast, the same study found that it takes next to nothing in terms of salary increase to lure away a disengaged worker. Another staggering study by Deloitte revealed that only 8% of businesses feel their rewards programs are effective at retaining talent.

It’s a job seeker market right now, which means the harsh reality is that most people in your organization could go elsewhere for more money if they wanted to - so what makes them stay?

Why recognition is the answer

“The single greatest advantage in the modern economy is a happy and engaged workforce.”

Recognition leads to happy employees and better business results. Happy employees are more productive, creative, and supportive of their colleagues, but most importantly, they are more likely to stay. As Harvard Business Review (HBR) put it, “the single greatest advantage in the modern economy is a happy and engaged workforce.”

Performance-wise, HBR found that more than 40% of employed Americans feel that they would put more energy into their work if they were recognized more often.

In terms of retention, Robert Half found that 66% of employees would quit if they didn’t feel recognized – for millennials, that number jumps to 76%. Similarly, a study by SHRM (Society for Human Resource Management) found that 79% of millennial and Gen Z survey respondents said an increase in recognition and rewards would make them more loyal to their employer. The study did find that giving financial recognition (in the form of casual rewards) to the two youngest generations at work provides these workers with a greater sense of personal fulfillment and helps boost employee retention.

Gallup also surveyed a similar group and found that Millennials engaged at work are 64% less likely to change jobs in the following 12 months. Given that by 2025 Millennials will make up three-quarters of the workforce, the need for robust employee engagement strategies and management is urgent to fight this unprecedented wave of resignations.

What an effective modern recognition program looks like

According to Josh Bersin, most recognition programs out there today focus on tenure (over 85%). At first glance, that makes sense - reward people for staying, but it’s not the most effective way to use recognition to improve retention of good employees. The U.S. Bureau of Labor’s latest report indicates that the median years of tenure for employees 25 and older is 4.9 years, and 2.8 years for employees aged 25-34. This means that if your recognition program is based on years of service and starts at year 5, around half of your employees (and even more for millennials) will never experience any form of formal recognition.

Instead, your recognition program should be tied to what's important to your organization, your values, and your goals. High-performing employees will not respond to programs based on tenure where “everyone wins.” As Gallup put it, “seeing awards for mediocre work will only signal to your stars that your organization is not for them.” Evidently, the world has changed, and your recognition program needs to evolve too.

But exclusive programs only for high performers aren't the answer either.

That's why Kudos's employee engagement and recognition platform has four distinct levels of recognition built-in, based on both performance and contribution. Employees can be recognized with a “Thank You” for an act of kindness or selflessness, all the way to an “Exceptional” for significant accomplishments and initiatives with a deep impact on the organization. Modern recognition programs provide transparency and are accessible for everyone from day one!

Final Thoughts

The Great Resignation is another unexpected challenge that the 2020 pandemic presented for HR professionals. Not only are HR departments and organizational leaders working on planning what the future of work looks like (back to the office, fully remote, hybrid), but now they are also facing the added challenge of recruiting and retaining talent. Creating a culture around recognition with a partner like Kudos is a simple and highly effective way to give today’s employees what they need to stay.

Given their extensive research in the space, Gallup believes, “reversing the tide in an organization requires managers who care, who engage, and who give workers a sense of purpose, inspiration, and motivation to perform. Such managers give people reason to stay.”

Schedule a call with Kudos today to discover how we can help! Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce.


Rewards

5 min

min

Are Employee Rewards a Taxable Benefit? A Mini Guide

Are Employee Rewards a Taxable Benefit? A Mini GuideAre Employee Rewards a Taxable Benefit? A Mini Guide

At Kudos, we firmly believe that recognition is the best way to drive employee engagement and improve organizational performance. However, rewards can also be a terrific tool to enhance the employee experience.

Read Article

Disclaimer: The advice shared in this publication is intended for informational purposes only. It does not replace the expertise of accredited professionals. Please review the governing tax laws in your jurisdiction and consult your finance team.

At Kudos, we firmly believe that recognition is the best way to drive employee engagement and improve organizational performance. However, rewards can also be a terrific tool to enhance the employee experience.

In practice, this recognition and communication first philosophy fosters connection, communication, and celebration of day-to-day contributions to significant accomplishments. We recommend that you keep the rewards component of your recognition program minimal or casual so they don't overshadow the program's goal. What people really want is to know they are valued, their work is noticed, and they belong. Rewards are nice but should not be the core focus. They should simply be a nice, low-cost benefit that reminds the team they work for a great company that cares about them.

"We recommend that you keep the rewards component of your recognition program minimal or casual so they don't overshadow the program's goal."

If you do include rewards and monetize points, The Conference Board of Canada published an excellent report for recognition and reward budgeting for a system like Kudos, casual rewards, and recognition for automated years of services and events like automated birthday recognition and rewards. The report concluded that a not-for-profit organization should budget approximately $125 per year, and for-profit organizations should budget up to $250 per person per year.

With that said, when employees redeem points for rewards like gift cards through a platform like Kudos, the tax implications are not always clear-cut. When it comes to Kudos Rewards specifically, our clients often ask, "should we consider the rewards in Kudos a taxable benefit?"

The short answer is - it depends!

What constitutes a taxable benefit differs by country, state, province, company type, and many other unique factors.

Technically most gifts given to employees (including KudosRewards™) are considered taxable benefits. That means that they are considered additional income, and the value of the reward should be included in your employee's year-end tax forms. But ultimately, this is at the discretion of your finance team. The most important thing is communicating your chosen policy to your employees so there are no surprises when the tax deduction appears on their pay stubs.

In the following mini-guide, you'll find more helpful information on where to get started when it comes to taxable benefits and Kudos, including:

  • A summary of tax implications for employee rewards in the US
  • A summary of tax implications for employee rewards in Canada
  • An overview of how existing Kudos clients are managing tax rules
  • Examples of 100% tax-free rewards in Kudos

Overview of Tax Implications for Employee Rewards in the US

As mentioned previously, generally, rewards, bonuses, and gifts are all taxable, with some limited exceptions. If you give an employee cash or a cash equivalent such as a gift card, it is taxable regardless of the amount or the purpose. Employers must record taxable income on the employee's W-2 at the end of the year.

Businesses can deduct up to $400 for all awards of tangible personal property given to any one employee annually, such as company swag and holiday gifts. Gift cards don't count as awards for this deduction because they aren’t considered personal property.

Rewards that are not personal property are considered compensation (including gift cards) and should be subject to federal and state income taxes, as well as FICA taxes (Social Security and Medicare) for both employee and employer.

Notable exceptions:

De minimis benefits: De minimis benefits are a notable exception to the rule. The IRS defines de minimis benefits as "one for which, considering its value and the frequency with which it is provided, is so small as to make accounting for it unreasonable or impractical." For example, coffee or soft drinks in the break room or company swag like coffee mugs and hoodies sent to new hires.

The IRS suggests organizations consider the frequency and value of the benefit when determining whether it can be considered de minimis.

While there is no defined amount, the general rule of thumb is that infrequent rewards below $100 per instance would be considered de minimis, which is often the case with Kudos Rewards redemptions, for example.

Suggested Further Reading:

Overview of Tax Implications for Employee Rewards in Canada

In Canada, bonuses and gifts are also generally taxable, with some limited exceptions.

According to the Canadian Revenue Agency (CRA), "a gift or award that you give an employee is a taxable benefit from employment, whether it is cash, near-cash, or non-cash."

Further, the CRA explains that cash and near-cash gifts or awards are always a taxable benefit for the employee. A gift card or experience voucher is an example of a near-cash gift.

If the benefit is taxable, it is also pensionable, and you should deduct CPP contributions and income tax.

Notable exceptions:

  • Non-cash gifts and awards: The CRA states that you may give an employee an “unlimited number of non-cash gifts and awards with a combined total value of $500 or less annually.” This means that you can give employees non-cash gifts like swag, tickets to events, or holidays, for example, without any tax repercussions up to a fair market value of $500. Near-cash gifts, like gift cards, do not count toward this exception. If the total amount of gifts exceeds a fair market value of $500, the fair market value of anything additional should be added to the employee’s income.
  • Long-service awards: The CRA also allows you to give your employees a non-cash long-service or anniversary award valued at $500, tax-free. In Kudos, these awards can be automated and are easy to differentiate on the redemption report.

Suggested Further Reading:

How Kudos Clients Do It

Generally speaking, Kudos clients approach the situation in two ways: Some do not deduct anything based on points redeemed, relying on the standard exemptions highlighted above, resulting in a tax-free scenario (e.g., de minimis benefits). The others (the vast majority) treat all redeemed points as taxable and keep the calculation and tracking simple by making the payroll deduction once per year. Sometimes clients will “gross up” the value of the reward so that the team member does not actually get the tax impact on the $100 they earned. In this situation, if an employee redeemed $100 worth of points at a 30% tax rate, you would typically have to deduct $30 from payroll. However, by increasing the reward to a value of $130 for payroll (i.e., grossing up) and then holding back the extra $30 for tax, the employee is covered for the tax required.

Kudos administrators within each organization can easily download a monthly or quarterly Redemption Report of employees' redeemed rewards in Kudos. The report allows your payroll and finance team to sort by period, people, department, and/or location. In most cases, you can map that CSV file to your HRIS to automatically update each employee's payroll information with a simple upload.

Another important note is when Kudos users use their Kudos points toward a charitable donation, your company makes the donation on behalf of that employee. So, in this case, the employee never actually receives cash at any point in the transaction, meaning no tax implications for the employee, and your company may be eligible for a tax deduction for the donation. The employee is simply asking the company to direct reward points to a charity they care about.

These are just some examples of how Kudos clients manage the tax implications of their program. Your finance team will have its own approach and preferences. Kudos is here to support along the way through reports and guidance.

Tax-Free Rewards with Kudos

In Kudos, you can decide the value of your points, who can give points, and what kind of rewards are available in exchange for points earned. If you choose to use points in Kudos but would prefer not to manage any tax implications, rewards with zero cash value are a great option.

Here are some examples of zero-cash value rewards:

  1. Lunch with the CEO
  2. An extra day off
  3. A reserved parking spot for a week in your company lot
  4. Basic company swag like t-shirts and mugs
  5. The option to donate points to a charitable organization

Key Takeaways

As a reminder, Kudos is designed in a way that points have no dollar value until they are redeemed. For instance, if an employee leaves with a remaining balance of points, they hold no value and have no tax implications. If employees redeem points for a gift card, in most cases, the value should be accounted for as a taxable benefit, i.e., as income for your employees. If the recognition program is designed on casual rewards and primarily gift cards, the annual "reward" amount will likely fall in the range of $100 to $150 USD per person per year. And so, the tax effect is often considered immaterial from an individual standpoint and possibly tax-free, depending on the country.

The most important thing is to make sure your employees are aware of the tax implications from the beginning. We suggest you make it part of your onboarding process; most of the time, it's easy to explain that perks, such as gift cards, are treated as income and subject to taxes.

Another important way to spread awareness is to add the optional taxable benefits banner on the Kudos Rewards page, which can be added automatically by your admin and reminds employees that they will be taxed on their gift card redemptions.

Finally, Kudos is a recognition-first platform – that's at the core of what we do. It's what's behind our name! If you're concerned about the tax implications of a rewards program, with Kudos, you can turn off the rewards functionality entirely without sacrificing the platform's benefits.

Disclaimer: The advice shared in this publication is intended for informational purposes only. It does not replace the expertise of accredited professionals. Please review the governing tax laws in your jurisdiction and consult your finance team.

Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce. Book your demo today!

People Analytics

5 min

min

7 Ways You Should Measure Your Workplace Culture

7 Ways You Should Measure Your Workplace Culture7 Ways You Should Measure Your Workplace Culture

Can you easily describe your workplace culture? If you can’t, that could be a sign of a bigger problem. A weak or non-existent culture is not neutral; it signifies a lack of direction and cohesion. A strong and clearly defined culture is critical to taking your business to the next level.

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Can you easily describe your workplace culture? If you can’t, that could be a sign of a bigger problem. A weak or non-existent culture is not neutral; it signifies a lack of direction and cohesion. A strong and clearly defined culture is critical to taking your business to the next level.

Workplace culture is complex and unique to every organization, but at the same time, it’s often simply described as “the way things are done around here.”

Gallup expands on that by explaining that “culture is the unique way that your organization lives out its company purpose and delivers on its brand promise to its customers.” Culture will develop with or without your input. Without inputs and systems, culture will falter. With input, a system, and a strategy, culture can help you achieve your organization’s unique goals. That’s why organizations must define the culture they want and communicate it widely and often to stay top of mind and prevent unproductive fringe cultures from forming.

A strong and distinctive culture has countless benefits, including:

  • Improved and more straightforward people management (leaders know which behaviors to encourage and celebrate within their teams).
  • More effective hiring (candidates and hiring managers will have a better idea of cultural fit).
  • Increased levels of employee engagement that bring a whole other host of benefits.

The results also translate beyond employee well-being to business results. For example, culture directs how employees interact with customers and helps keep employees focused on your organization’s mission and purpose. What's more, a recent survey conducted by MIT and Glassdoor found that 85% of CEOs and CFOs believe that an unhealthy corporate culture leads to unethical behavior.

So, how do you manage culture to reap all these fantastic benefits?

As the saying goes, “you can’t manage what you can’t measure.” Once you and your leadership team have done the work to establish the values and behaviors you’d like to see as part of your culture – how do you measure success? How can you quantify the strength of your culture and the value it brings?

We’ve broken down culture analytics into these three broad categories:

  1. Sentiment: Sentiment data and insights tell you how employees feel about their role and organization - you would typically collect this through surveys or interviews. Sentiment data is very valuable. It can help you confirm/disprove assumptions and get a pulse on the overall employee experience at a specific moment in time.
  2. Behavior: Behavioral data provides insight into what your employees are doing day-to-day and the qualities they possess. Where sentiment data tells you how people feel, behavioral data tells you how they work in practice. Behavioral data can help you understand if your employees are living your corporate values.
  3. Relationship: Relationship data showcases how your employees are interacting with their colleagues and teams. It can highlight strong connections between departments and where those connections may be lacking. Connection and communication are critical to a healthy workforce; relationship data and metrics indicate your organization's performance when it comes to building culture.

With that in mind, here are 7 methods and metrics you should use to measure your workplace culture:

1. Surveys

Surveys are a great tool to get honest feedback from your entire workforce. You probably already run periodic employee engagement surveys - Inc has rounded up examples of facets indicative of culture you may want to ask about in your next round. Surveys help you understand overall employee sentiment and alert you to any trends or issues within your workforce.

That said, surveys should not be relied upon as your only culture metric. There can be bias and inaccuracies in surveys based on each respondent's frame of mind when taking it. The most effective way to track information about your culture and employees (also known as HR/People Analytics) is to layer survey data, with behavior and relationship data collected using other methods described below. Surveys collect data about what people think or feel, but not about what they do, nor how they interact. There are dozens of great survey tools and resources in the market ranging from Microsoft Forms and Survey Monkey to high-end solutions like Qualtrics and Glint.

2. Program & Event KPIs (Key Performance Indicators)

Sometimes what happens outside of employee’s roles and day-to-day tasks can be the most telling. Another way to measure the health of your culture is to track attendance at social events or wellness campaigns over time. While everyone’s reasons for not attending vary, a general lack of involvement could indicate a lack of social cohesion and shared values across employees. As a piece on workplace social functions by SHRM explains, “HR should view employees' reluctance to attend a social function as a window into a potential human-relations or culture issue at the company." This is an example of behavior data as it tracks the actions of employees.

"Sometimes what happens outside of employee’s roles and day-to-day tasks can be the most telling."

3. Anecdotes

Keep track of anecdotal feedback to uncover patterns or common themes. Make a point to review the anecdotes in leadership meetings weekly, monthly, or quarterly. Some examples of places you can collect these include exit interviews, Glassdoor reviews, and social media posts.

One remarkably simple but effective way many of today’s HR professionals are collecting this information is simply by regularly asking employees to complete this sentence: “I don’t know why [your company name] doesn’t just ____.” Anecdotes are another example of employee sentiment data but can often also give great insight into behaviors and relationships.

4. HR/Workforce KPIs (Key Performance Indicators)

Tracking HR KPIs is key to understanding important cultural shifts (positive and negative.) The good news is that most of this data is likely readily available in your HRIS (Human Resources Information System.) These KPIs include turnover rate, rates of absenteeism, internal promotions, and referrals.

Another important metric is the eNPS (employee net promoter score), which you can collect through the surveys mentioned above. Tracking these quantitative metrics against your culture initiatives can help you understand how you’re doing. For the most part, this is an example of behavior data as it summarizes actions taken by the workplace. eNPS would fall into the employee sentiment category.

5. Business KPIs

Tracking business KPIs in conjunction with efforts to improve culture can also provide valuable insight. Work with your finance team for data like:

  • Customer retention rate
  • Customer satisfaction (Net Promoter Scores)
  • Revenues
  • Sales

While this data doesn't necessarily fall into one of the three categories in our framework, significant changes in business KPIs can indicate positive (or negative) culture changes, especially when layered with any initiatives you're working on to improve your culture.

"In tracking behaviors, you may uncover that your organizational values are not known or resonating with your workforce, and that might explain why your culture isn’t where you’d like it to be. In fact, most people don’t know their company values, much less how or where they apply."

6. Tracking Behaviors

While culture itself is challenging to measure, its outputs, or behaviors, can be tracked. Tracking the prevalence of the behaviors associated with your values can be a good indicator of your culture’s strength.

Using your desired value-based behaviors, you can create culture metrics for your organization. For example, if innovation is one of your values, and sharing ideas is an associated behavior, you can ask managers and team leads to report on the prevalence of innovative ideas being shared. Similarly, if accountability is a value, an associated behavior might be meeting deadlines. Again, ask your managers to report on whether deadlines are usually met.

In tracking behaviors, you may uncover that your organizational values are not known or resonating with your workforce, and that might explain why your culture isn’t where you’d like it to be. In fact, most people don’t know their company values, much less how or where they apply. In this case, you have two choices: work on better communicating your values to your team or revisit your values altogether. Evidently, this is an example of behavior data, but it can also provide valuable relationship data.

Tools like Kudos make it easy to reinforce and measure core values and behaviors/qualities, automating the process and housing it all in one place. More on that in the next section!

7. Kudos - Analytics and Insights

With Kudos Analytics, you can automatically measure key components of your culture like the value-based behaviors just discussed, the collaboration between people and departments, and contributions to morale through the recognition and appreciation messages shared on the Kudos platform. Rich and valuable behavioral and relationship data.

Kudos Analytics is built into the Kudos employee engagement and recognition platform, a hub for peer-to-peer recognition messages highlighting employee contributions. With Kudos, each recognition message is tied back to organizational values and behaviors.

The great thing about a system like Kudos is that new data is gathered regularly, allowing you to correlate how your team appreciates each other and interacts with one another, allowing you to connect that information to HR and Business KPIs.

With Kudos, you can measure:

Feedback: Kudos can help you gather direct feedback by embedding your current survey tool in Kudos and sharing the results.

Participation: Kudos is key to measuring participation based on activity in the system. Kudos can also be used to promote and appreciate those who participate and manage your culture events.

Anecdotes: Every message in Kudos provides valuable insights on the connections between employees as well as the effort, act, or accomplishments by individuals, groups, and departments. These messages often capture how people have moved the dial on business KPIs.

Behaviors: The often hard to capture details on what behaviors or qualities individuals demonstrate are captured in every Kudos recognition message. This helps you reinforce your core values but also measure how people live them every day.

Beyond the “moment in time” measures, Kudos Analytics also tracks trends over time, allowing you to discover any changes in behaviors or contributions, ranging from one employee going above and beyond regularly to a notable improvement in culture.

These dashboards can help managers understand the culture of their team and leaders the culture of the entire organization. Individuals can see their contributions, too, allowing them to self-correct if they aren't exhibiting enough desired qualities (behaviors.)

Sample from the Kudos Analytics Dashboard:

CultureBlog

Looking Ahead

The MIT and Glassdoor survey quoted earlier in this piece found that 90% of CEOs and CFOs who responded believe that improving corporate culture would increase their company’s value, with 80% ranking culture among the five most important factors driving their company’s valuation. Being able to show that you’ve made strides in building up your culture through measurement and metrics will not only help you understand which initiatives are working but also highlight HRs role as a strategic business partner.

Culture is vital to employee engagement and business success - understanding how you’re doing is the first step toward managing and building the culture of your dreams.

Kudos Can Help.

Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce. Book your demo today!

ROI

5 min

min

How to Get Approval for an Employee Engagement and Recognition Platform: Practical Advice from a CFO

How to Get Approval for an Employee Engagement and Recognition Platform: Practical Advice from a CFOHow to Get Approval for an Employee Engagement and Recognition Platform: Practical Advice from a CFO

According to Deloitte’s Q1 2021 CFO Signals Report, 66% of CFOs think this is a good time to take on greater risks, up from 49% in Q4 2020. Activities related to talent retention were cited as an example of risks CFOs are willing to take right now. Evidently, there’s no better time to make your case for the benefits of an employee engagement and recognition platform – and we’re here to help.

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You’ve put in weeks of research, reading, learning, getting to know vendors, and experiencing demos - you’re ready to present a proposal to your executive team. This can feel like a big hurdle to overcome. We sat down with Karim Punja, CFO at Kudos, to demystify what executives need to help make those conversations less nerve-racking. While the tips presented here center around making a case for an employee engagement and recognition platform like Kudos, they can also translate to any initiative or investment you’d like to move ahead.

Why now is the right time to implement an employee engagement platform:

According to Deloitte’s Q1 2021 CFO Signals Report, 66% of CFOs think this is a good time to take on greater risks, up from 49% in Q4 2020. Activities related to talent retention were cited as an example of risks CFOs are willing to take right now. Evidently, there’s no better time to make your case for the benefits of an employee engagement and recognition platform – and we’re here to help.

When asked what he and his team want to know when evaluating a proposal for a new enterprise investment, Karim explained that he is always trying to answer two critical questions:

1. What is this going to cost?

2. Why are you proposing this? And why now?

Karim walked us through what it takes to answer those questions in a way that will make your proposal hard to refuse. As a CFA with over 15 years of experience in corporate financial management and planning, this guy knows his stuff - we’re confident these trade secrets will help you move the needle forward on your project.

Let’s dive in so you can start building your plan:


Answering Question 1: What is this going to cost?

Before approaching your C-Suite and especially your CFO to propose investing in an employee engagement and recognition platform, make sure you’ve considered the total cost.

Transparent Pricing

First, Karim emphasized the importance of presenting transparent pricing, including an accurate quote or contract that outlines all costs, including any implementation fees, additional support costs, and the total length of commitment. Sometimes options can be helpful too, like a discount on a 3-year commitment, for example. Finance experts deal with specific, measurable things; your finance team will not be able to sign off on approximate numbers. When it comes to employee recognition and engagement platforms specifically, your CFO may ask about reward markups. At Kudos, rewards are optional and extra (we never markup rewards or sell points), but that’s not always the case.

Budgeting

It’s also important to outline a budget for the program going forward. When budgeting for recognition, a good rule of thumb for casual rewards, team events, and milestones is to allocate between $125 to $250 per year per person, for example, some clients use the equivalent of 1% of payroll. You may already have a budget set aside for many of these things like your monthly birthday celebrations, years of service awards, company picnic, etc. Make sure to show your budgeting plan moving forward to make everything easy to assess.

Total Cost of Ownership

Finally, most CFOs will want to take a close look at the Total Cost of Ownership. "Total Cost of Ownership is one of the most important things I look at,” says Karim. This goes beyond just the budget and contract. Some questions you should be prepared to answer include: Who will manage this new platform? How many hours per week will that person devote to it? Is another full-time employee required? How much change management will be necessary during implementation? Try to include answers to those questions in your formal proposal. Another important aspect to consider with enterprise software is how long it will take to implement and be fully operational. With Kudos, for example, implementation is quick and straightforward so that clients can get up and running quickly. Lengthy implementation cycles delay the benefits of the system, which is an important consideration. Providers should be available to help you build out a plan to present an accurate total cost of ownership to make the analysis simpler for your finance team.

"Who will manage this new platform? How many hours per week will that person devote to it? Is another full-time employee required? How much change management will be necessary during implementation?"

Answering Question 2: Why are you proposing this? and why now?

Why are you proposing this system or solution? While this is a simple question, your finance team will be looking for specific answers.

Identify what problem this solution is addressing

First, you need to be prepared to explain the specific need or problem. Why are you proposing the employee engagement and recognition platform? Be specific! Are you switching from an existing provider to another due to poor customer service or markups? If this is a new initiative – have your employees recently reported low levels of engagement in a survey? Or are you experiencing higher-than-normal levels of turnover or burnout?

You should address this question by focusing on your organization’s unique needs. It is critical in getting your CFO on board and open to considering your proposal.

Return on Investment (ROI)

A second important metric to touch on is ROI. “I need to know how we can measure results. What does success look like?” asks Karim. Work with your provider for specific examples of ROI that you can share with your CFO. For instance, Kudos can improve employee engagement which in turn can reduce turnover employee turnover. On average, 50-60% of Fortune 500 companies' business spending is allocated to labor, including turnover, which is costing US companies 1 trillion dollars per year. The cost of replacing an individual employee alone can range from one-half to two times that employee's annual salary. The ultimate cost of disengagement is an employee leaving. Demonstrating that an employee engagement and recognition system addresses that is great for your case.

“When evaluating internal proposals, I always look for the tangible and intangible benefits,” says Karim. Tangible benefits have a more direct dollar value associated with them, such as reducing the cost of one system versus another; Intangible benefits are items that are not as simple to associate a direct dollar amount to but still can provide an incredible amount of value to the organization.

For example, beyond turnover, investing in employee engagement and recognition platforms has many benefits, including higher productivity, fewer safety incidents, lower absenteeism, higher sales, and higher profitability.

Kudos ROI

Opportunity Cost

Finally, your CFO will inevitably have to weigh the Opportunity Cost of moving ahead with your proposal. Karim explains, “as a CFO, I’m constantly weighing where I need to allocate capital, and when. I need to determine the priorities today vs. six months from now.” What that means is you’ll have to be able to explain why you’re recommending that your organization move forward with an employee recognition platform now vs. in 6 months. When it comes to employee engagement, the disruption of 2020 was undeniable and has created unique challenges for organizations regarding culture, morale, and turnover. What’s more, the job market is hotter than ever; businesses that don’t find new, better ways to engage and retain their employees will become less and less competitive. These are both excellent arguments for an immediate need for a system like Kudos.


"The job market is hotter than ever; businesses that don’t find new, better ways to engage and retain their employees will become less and less competitive."


Summary Checklist:

  • Present transparent estimate or quote with no hidden costs
  • Consider the total cost of ownership
  • Explain why you are proposing the initiative
  • Have a well-defined expected ROI
  • Explain why this initiative needs to happen right now (opportunity cost)


CFOs have a lot of responsibility on their shoulders. They typically work directly with CEOs and board members to make the best recommendations possible on how an organization can best use its capital to achieve its business goals. Executive buy-in is critical to launching a successful employee engagement initiative. Beyond approval, if you can include an executive like your CFO in the demos and negotiations, they will feel connected to the project and help sponsor the program internally, a key indicator of success. Following the framework presented above will be an effective way to build the case for your recognition and engagement platform proposal.

About Karim Punja

Karim is a CFA Charterholder with over 15 years of experience in corporate financial management and planning. He has done extensive work in investment analysis pertaining to growth strategies, capital investments, restructuring and supporting new venture planning. Karim has also worked on multiple debt and equity financing initiatives, raising over $100M.

Interested in making a case for Kudos in your organization? Start the process today!

Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce. Book your demo today!

Recognition

5 min

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6 Reasons Why Employee Recognition is Critical in Healthcare

6 Reasons Why Employee Recognition is Critical in Healthcare6 Reasons Why Employee Recognition is Critical in Healthcare

How can HR professionals in healthcare can facilitate an excellent patient experience? One way is ensuring that their organization's employees are engaged.

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HR Professionals in healthcare organizations have a complex portfolio of responsibilities. They serve an incredibly diverse group of employees in a wide variety of job functions.

From nurses and physicians to janitors and administrative staff, every employee in a healthcare organization is essential; they all directly affect the patient experience through the care and effort they put into their job.

One way today's HR professionals in healthcare can facilitate an excellent patient experience is by ensuring that their organization's employees are engaged. While employee engagement has many facets, one often overlooked opportunity for health care organizations is employee recognition. Incredible work is being done every day in healthcare and sharing those successes through a platform visible to all can significantly improve employee engagement.

But is the implementation of a formal recognition platform worth it for healthcare organizations? The data and studies show that it is definitely a worthwhile investment and is, in fact, critical to organizational, employee, and patient health.

Here are six specific reasons why healthcare organizations need to prioritize employee engagement through recognition:

1. Healthcare Workers are Burnt Out

Burnout has always been a prominent issue for healthcare workers, and during the COVID-19 pandemic, this issue was especially prevalent. The typical burnout worsened during the pandemic and even led to many healthcare workers reporting feelings of psychological distress. That said, even before the pandemic, a 2016 study by the ECRI Institute found that burnout was a problem for most healthcare workers.

One proven way employers can work to reduce burnout is through recognition. If employees feel seen for their work and appreciated for their efforts, they may feel less inclined to "prove themselves" by working unnecessarily long hours or choosing not to take time off.

2. Engaged Employees are Less Likely to Leave

Turnover is a costly threat to many healthcare organizations today. Beyond the financial cost of turnover (estimated at 33% of the employee's annual salary), there are significant effects on morale and the workload of the remaining employees. When colleagues leave, employees have to say goodbye to a friend, cover their responsibilities and shifts, and train new hires. These effects can create a cycle of turnover, which creates a heavy financial and emotional burden for organizations.

Employee engagement directly affects the likelihood of an employee staying longer. A study reported by Harvard Business Review found that only 17% of highly engaged hospital workers were interested in other employment opportunities versus 43% of the disengaged group. What’s more, Deloitte reported that companies with cultures of recognition have 38% less turnover.

3. Improved Employee and Patient Safety

A study by Gallup revealed that employee engagement directly impacts the number of accidents on the job. The more engaged the employee is, the more likely they are to follow safety protocols and subsequently experience fewer accidents. Recognizing employees for safety will also encourage others to adhere to those same practices.

But even more interesting is that the same Gallup study discovered that engaged employees who operate more safely contribute to enhanced patient safety. Gallup saw a 15% increase in patient safety in the groups studied when their health care team was highly engaged.

4. Reduced Patient Deaths

A common indicator of the quality of medical care at a health care organization is the rate of patient deaths. In a study of over 200 hospitals, Gallup compared patient outcomes to possible contributing factors. The study found that nurse engagement is the No. 1 predictor of mortality across hospitals.

Given these results, it is clear that employee engagement truly is life or death in hospital settings, especially for nurses. The American Nurses Association compiled the following list of activities that encourage nurse engagement, and recognition landed first.

  1. Acknowledge the Work
  2. Provide Support from Leadership
  3. Foster Empathy and Trust
  4. Support Teamwork
  5. Encourage Work/Life Balance
  6. Communication

"Nurse engagement is the No. 1 predictor of mortality across hospitals."

5. Improved Organizational Performance

Organizations with highly engaged employees consistently perform better from an operational and business standpoint. One example of this is improved NPS scores or, for hospitals in the US, higher Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) scores.

A study in HBR found when organizations saw improvements in their HCAHPS scores for patient experience or employee engagement, the average patients' global ratings of their care improved.

As Charla Garcia, the CHRO at UMHRO, put it in a recent interview with Kudos, "Patient satisfaction is our ultimate measure. We have a saying, "Happy employees equal happy patients." Because we focus on supporting our staff, they are free to support our patients. The local community then does an amazing job of supporting us in return.”

6. HR Administrators Love it!

By prioritizing and streamlining recognition, HR Administrators can benefit from a consistent, transparent, and equitable program, and employees are happier. CFOs appreciate the built-in cost controls built-in, and given the benefits previously mentioned, HR has to spend less time managing unhappy employees, turnover, and security incidents.

What’s more, recruiting top talent is easier when your organization has a reputation for being a great place to work. Basically, a focus on employee recognition helps HR Administrators excel at their roles and contribute to their organizations in a meaningful way.

The points above outline just how critical employee engagement and recognition are for today's healthcare organizations. Luckily, there are employee recognition platforms like Kudos that are designed to serve the unique employee population in healthcare organizations.

Kudos' unique platform allows employees to give and view recognition through a web browser, mobile app, or kiosk (Kudos TV) – a flexible option that is inclusive and accessible.

But don't take it from us, here is what longtime client University of Missouri Health Care had to say:

"We found Kudos and we have never looked back. Their platform stood out over the rest of our options for a variety of reasons – but mostly because it checked every single one of our boxes. It wasn't just a delivery mechanism for rewards – it was the whole recognition package. We finally have data on our recognition efforts, and it's been so helpful in our employee engagement efforts. It is a perfect fit for our industry and culture – the mobile app has been such a game changer for us. Most of our employees do not sit at a desk all day. They are on the move and now they can recognize each other and redeem their points from anywhere. Kudos has single-handedly removed so many barriers to recognition.

We are so happy with our decision to partner with Kudos for our recognition needs."

Kaci Drennan, MPA
HR Communications Consultant
University of Missouri Health Care

Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce. Book your demo today!

Success Stories

5 min

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“We want Kudos back!” How a Utah advertising agency listened to their employees to build the culture of their dreams

“We want Kudos back!” How a Utah advertising agency listened to their employees to build the culture of their dreams“We want Kudos back!” How a Utah advertising agency listened to their employees to build the culture of their dreams

Saxton Horne Communications is part of the Larry H. Miller Group of Companies, which includes more than 80 businesses located throughout the western United States.

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Client Profile

  • Company Name: Saxton Horne Communications
  • Industry: Marketing/Advertising
  • Head Office: Sandy, Utah
  • Kudos Champion: David Blain, President
  • Key Takeaways:
  • Culture is a strategy (good cultures can overcome bad times)
  • Systems create consistency (from manual and once a year to online and all the time.)
  • Live your values (from words on a wall to everyday actions)
  • Measure what you want to manage, and listen to your team (from assuming all is good to know where you need to focus)

“We want Kudos back!” How a Utah advertising agency listened to their employees to build the culture of their dreams

“That’s the most fun I’ve had all day!” is what David Blain, President of Utah-based advertising agency Saxton Horne Communications, wants to hear from his clients after every meeting. Blain also loves to hear: “I want to work at Saxton Horne; you guys have more fun than anyone!” The latter is arguably much harder to achieve and has been on Blain’s mind, and to-do list for years.

Saxton Horne Communications is part of the Larry H. Miller Group of Companies, which includes more than 80 businesses located throughout the western United States. The Larry H. Miller Group of Companies has subsidiaries in automotive, entertainment, finance, auto insurance, real estate, health care, and philanthropy. What began as a single car dealership in 1979 run by Larry H. and Gail Miller, has grown into one of the largest privately-owned companies in the United States. The group’s primary mission is “To Enrich Lives,” and their vision is simple, to be “the best place in town to work and the best place in town to do business.”

About five years ago, Blain and his team sat down to develop a plan to take the agency’s culture to the next level, in part to live out that broader vision. “The conclusion that we came to was that you could just let culture happen and be what it is, or you can intentionally create it.” said David, “and we decided that we were going to create a culture of recognition.” A culture of recognition is one where everyone’s contributions are celebrated and appreciated regularly.

“The conclusion that we came to was that you could just let culture and be what it is, or you can intentionally create it.”

As a first initiative, the team decided to start Thank You Week. The idea behind Thank You Week was to celebrate Saxton Horne’s people over the course of a week every year. They would bring in lunch every day and give everyone Friday afternoon off. The thoughtful recognition component was even more powerful; every day, employees were asked to write five thank you cards to someone they didn’t typically work with so that every morning of Thank You Week, employees would come in to find thoughtful notes on their desks. Another year, the leadership team wrote a thank you note to every spouse or significant other of their employees, thanking them for supporting their partner in what they did for the company. 

The Saxton Horne team experienced the power of recognition every year during that week, and soon realized that they needed to expand the initiative beyond just 5 days per year. David Blain knew the solution - he called Kudos. He knew about the Kudos platform from previously working at an organization that used it, and he recognized that to build the culture he wanted, he needed a robust system in place to facilitate the goal of creating a great culture and measuring process along the way.

Implementing new software can sometimes be accompanied by some apprehension. Still, Kudos was welcomed with open arms by the Saxton Horne team, with the energy and sentiment of Thank You Week present daily through recognition messages flowing between employees and from Leadership. There were even some unexpected benefits of Kudos – including the ability to foster inclusion through the built-in analytics showing the frequency of recognition between employees and observing patterns like who might be looked over or left out.

Then, in the early spring of 2020, The COVID-19 pandemic hit. 

Unsure of what would happen to their business, David had to make the difficult decision of laying off staff, reducing salaries, and cutting costs wherever possible. 

Unfortunately, that meant that software programs like Kudos had to go.

And while the guilt of the layoffs and salary cuts weighed heavily on management as the whole world watched to see what would happen with the pandemic, something unexpected happened at Saxton Horne. While everyone on the team was working remotely, there was one resounding message coming from staff to David and the leadership team:

“Bring Kudos back.”

And that’s precisely what they did. 

“Before our hiatus,” said David, “we didn’t entirely recognize how important Kudos was.” The pause from Kudos showed David and the team at Saxton Horne that everybody loved the platform. “You want to see if something works, take it away and see what happens,” jokes David. “We took away Kudos, and they protested - that told us it was worth a lot.” Essentially, the culture of recognition designed by the company’s leaders was lacking without Kudos.

“You want to see if something works, take it away and see what happens,” jokes David. “We took away Kudos, and they protested - that told us it was worth a lot.”


David Blain, President

David Blain, President of Saxton Horne Communications

Now back in action, Kudos is the responsibility of Saxton Horne’s “Culture Club” (formerly known as the party committee before David heard Boy George’s Karma Chameleon on his way to work one day and was immediately inspired to change the name.) The Culture Club’s mandate is simple – build culture. Made up of people from each department in the agency, they are responsible for managing and implementing all culture initiatives, including managing and running programs through Kudos. 

The impact of Kudos has been significant, especially with the majority of the company working remotely. While other tools are used strictly for business purposes, Saxton Horne uses Slack and Kudos as connection points for the team. Most Kudos recognition messages are sent through Slack using the Kudos integration. “Just like Kudos was an extension of Thank You Week, it’s also an extension of the connection our team would experience in the office. It creates the conversational, non-formal culture that we want.”

And as for the famous Thank You Week that started it all? It’s still going strong, and this year, assuming the pandemic continues to improve in the US, it will coincide with many Saxton Horne employees returning to the office. 


Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce. Book your demo today!

People Analytics

5 min

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HR Analytics and Employee Engagement: What You Need to Know

HR Analytics and Employee Engagement: What You Need to KnowHR Analytics and Employee Engagement: What You Need to Know

Today’s HR professionals and business leaders face unprecedented challenges in attracting, engaging, and retaining their people, and this challenge is expensive!

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Summary:

Employee engagement is more important than ever, and HR departments are making the shift to using People Analytics to make better decisions. Using robust People Analytics takes the guesswork out of measuring employee engagement; it helps create an optimal employee experience to reduce turnover, absenteeism and increase productivity. Simply put, measuring the employee experience motivates people to change at all levels. The "push to pull" shift from surveys to passive behavioural data collection gives HR, managers, and employees more accurate data to act upon.

Key Points:

  • Employees Engagement can pay significant dividends given the cost of labor and turnover.
  • Employers are turning to People Analytics to optimize their employee experience.
  • When HR professionals are working with accurate data on who their employees are, who they interact with, and what they value, it takes the guesswork out of HR decision-making.
  • The most effective People Analytics measures people’s interactions, behaviours, and sentiment over time.
  • People Analytics are shifting from “pull to push” where rather than actively collecting data, managers, and employees can see or are “pushed” actionable data in real-time.
  • If managers have accessible employee engagement and recognition data, they can improve business results by addressing any underlying problems and building on strengths.
  • If individual employees have access to analytics about their behaviours and contributions, they will be aware of their performance and be motivated to improve.

Today’s HR professionals and business leaders face unprecedented challenges in attracting, engaging, and retaining their people, and this challenge is expensive! On average, 50-60% of Fortune 500 companies' business spending is allocated to labor, including turnover, which is costing US companies 1 trillion dollars per year - the cost of replacing an individual employee alone can range from one-half to two times that employee's annual salary.

With those labor costs continuing to rise, the natural question for an organization to ask is, “how do we retain our talent?”

One way organizations are managing employee engagement is through human resources (HR) data and analytics.

HR writer and thought leader Josh Bersin defines HR Analytics, or People Analytics, as data that “allows organizations to understand the way they operate, improve productivity and performance, reduce turnover, and really make work better for people.” If People Analytics feels like uncharted territory for you, you aren’t alone; a survey of HR professionals found that just 9% of people feel that they have a “good understanding of the talent dimensions that drive performance,” and only 8% reported to have access to “useable data.”

Luckily, the space is becoming more and more accessible and user-friendly through simple dashboards that summarize data and make the information more digestible and actionable.

Most of today’s organizations use Human Resources Information Systems (HRIS) that allow for easy access to data on the length of the recruitment process, employee retention/turnover rates, and employee demographics. However, measuring employee engagement data is a much less common practice as the data has historically been more difficult to access beyond traditional surveys or anecdotal interviews – but change is coming.

Employee Engagement Analytics

Employee engagement has many sides. At the top of organizations, conversations surrounding organizational culture, employee engagement, and values are typically subjective and specific to the individual experience of the people in the room. This is not an intentional outcome from leaders, they are doing the best they can with the information they have, and People Analytics can provide them with more information.

People Analytics on employee engagement brings numbers and reports into those conversations, giving everyone in the organization a voice through the data. As an example, the leadership team may think that their values are representative or even understood by their workforce, but a simple report from their recognition system could show that what the employees’ values don’t align – timeliness might be valued over innovation, authenticity over professionalism, or creativity over productivity.

A piece in Harvard Business Review (HBR) suggests that using People Analytics makes human resources management more “deliberate and systematic,” which in turn leads to organizations becoming more effective by being “more evidence-based, talent-centric, and meritocratic.” When HR professionals are working with accurate data on who their employees are, who they interact with, and what they value, it takes the guesswork out of HR decision-making. Returning to the earlier example, if the organization’s values are not resonating with employees, it might be time to revisit them. Or, if there are inclusion issues, HR could run training on unconscious bias and diversity, equity, and inclusion to address these issues head-on.

So, how do organizations make that shift to People Analytics - and where does the data come from?

Historically, HR data was only collected through surveys. The problem with that approach is that surveys are just a snapshot in time and often do not tell the whole story. What’s more, many factors can affect a survey's results and the value of the results provided, including the quality of the questions, the respondents’ mood, the events on the day leading up to the survey, and more.

Still, surveys are effective at gauging employee sentiment (how employees feel about their role and organization) and can alert an organization to a need for deeper People Analytics if the results indicate poor engagement.

The most effective People Analytics measures people’s interactions, behaviours, and sentiment over time. One approach to measuring employee engagement with People Analytics is passive data collection that uncovers trends and actionable insights by analyzing how employees interact in communication systems like Slack, Teams, or Kudos.

This gives an understanding of culture and engagement that you would never get from a survey. For example, seeing firsthand which teams collaborate most often, least often, and if there are any communication siloes in your organization, to name a few. In short, behavioural and relational People Analytics gives data that more accurately reflects the true employee experience.

A study from Deloitte frames this as a shift from “pull to push” where rather than actively collecting data, managers and employees can see, or are “pushed,” actionable data in real-time.

How do HR Data and People Analytics Benefit Individual Employees?

The psychology behind why data tracking is effective in changing behaviour is simple. An article by Wired distilled it down to two factors: measurement and motivation. The piece also quoted Lord Kelvin’s famous saying, “If you cannot measure it, you cannot improve it.”

Stefan Olander, VP of Digital Sport at Nike, explains, "There's incredible power in knowing how you're doing,” he continues “it's inherently, incredibly motivational."

The same philosophy can be applied to People Analytics in an HR context. If managers have accessible data on employee turnover rates, absenteeism, and even the quantity and quality of recognition and gratitude they provide to their teams, the measurement will motivate them to improve their results by addressing any underlying problems and building on what’s working.

Similarly, if individual employees have access to analytics about their own behaviours and contributions, they will be aware of their performance and be motivated to improve. For example, if they know their company values and can see, through data provided by a platform like Kudos, how often they are recognized for displaying those values in their work and behaviours, they will see where their strengths lie. When employees know their strengths and are encouraged to build on them, they are more engaged and better contributors. A piece from Yale University explains:

“Employees have long focused on fixing weaknesses to increase chances of success. But recent research suggests that this long-standing advice may not be the best coaching. In fact, when leaders, teams, cultures, and individuals focus on strengths, they have a better chance at winning than if they focus on improving deficiencies.”

Looking ahead

Research shows that more than 70% of companies now consider People Analytics a high priority. How is your organization using people analytics to improve employee experience and engagement? If you think you could be doing better – reach out to the Kudos team for an enterprise strategy session today!

Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce. Book your demo today!

Recognition

5 min

min

Employee Recognition 101: Why, When & How

Employee Recognition 101: Why, When & HowEmployee Recognition 101: Why, When & How

Employee recognition is a continuously evolving space that has come a long way. Back when most employees spent their entire careers working for one company, pre-defined years of service awards and annual bonuses seemed to meet employees' recognition needs.

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This article is the fifth and final piece in our 5-part Employee Engagement and Culture Checklist for 2021 Series:

Employee recognition is a continuously evolving space that has come a long way. Back when most employees spent their entire careers working for one company, pre-defined years of service awards and annual bonuses seemed to meet employees' recognition needs. But today, employee expectations have changed, and the organizations that want to remain successful are actively working to address these new expectations.

In today’s HR departments, you’ll find culture specialists, total rewards managers, employee experience architects, and even chief happiness officers all dedicated to improving employee experience. What’s more, today’s c-suite is discussing employer brand, employee engagement, and stakeholder capitalism regularly.

Employee recognition is an essential piece of today’s HR puzzle - especially if your employees have recently reported a desire for more or better recognition in a survey or if you are experiencing high levels of turnover, poor performance, and employee burnout.

Here’s a simple overview to help you get to know the recognition space today and how you can make your employees and colleagues feel proud of their contributions at work.

Why is Recognition Important?

Recognition is vital to today’s workforce. Recent data collected by Gallup found that praising and recognizing employees can positively affect employee well-being and your organization’s bottom line. The report found that 66% of respondents trusted their colleagues more when they felt sufficiently praised. Adequately praised employees also produced better results and were more productive. A study on the importance of recognition found that today’s most progressive organizations use their recognition programs to consistently reinforce key behaviors and outcomes necessary to drive business success.

According to Forbes, recognized employees are “more satisfied, perform better, are more productive, and they’re more likely to engage with the rest of the team.” The Forbes piece explained that acknowledging employees for individual contributions reduces stress, absenteeism, and attrition. The previously quoted Gallup study found that employees who receive recognition also demonstrate increased collaboration through reduced self-protecting behaviors, such as information hoarding.

What we see at Kudos is that a good frequency and quantity of recognition, when all team members are sending between 3 to 5 messages per person per month, creates a culture of appreciation that leads to higher engagement.

Deloitte has identified these five market factors that make recognition especially important and relevant today:

  1. Unstable economy: recognition is typically more cost-effective and has a longer-term impact than expensive salary increases and bonuses.
  2. Need for greater agility: through recognition, organizations can retain employees and attract top talent.
  3. Flattening organizational cultures: recognition serves as appreciation for strong performance when promotions aren’t possible or the norm.
  4. Technology: Technology facilitates transparency, collaboration, and knowledge sharing, and that has become the expectation for today’s employees. Organizational recognition programs should fit that mold.
  5. Millennial Workforce: Millenials are the largest generation in the workforce, and they expect and demand more feedback than previous generations.

The ROI of recognition and employee engagement runs deep, but one of the most noticeable benefits to organizational culture and the bottom line is improved employee retention.

Employees who feel that they’re not adequately recognized at work are 3x more likely to quit in the next year, according to Gallup. Deloitte also reported that companies with cultures of recognition have 31 percent lower voluntary turnover. Another Deloitte report (The Talent 2020 Survey) found that recognition is among the top three most effective non-financial factors for retention.

When is Recognition Appropriate?

The timing of recognition matters. For recognition to appear authentic, it should be shared as close to the event or activity being recognized as possible, which means recognition should be given frequently. According to Gallup, fewer than a third of workers have received praise from a supervisor in the last seven days. In fact, Gallup's Chief Scientist Jim Carter has stated, "Recognition is a short-term need that has to be satisfied on an ongoing basis - weekly, maybe daily."

In organizations with cultures of recognition, significant accomplishments and small favors are recognized often and freely. Praise and gratitude are both critical components of recognition and should be shared equally. Beyond that, inclusivity is key. Everyone's contributions, regardless of their role, should be acknowledged if the impact is meaningful; this fosters belonging and improved employee morale.

Both individuals and groups should be recognized to maximize the benefits. When interviewed by Gallup, David Grazian, the Director of Corporate Taxation at Granite Construction, Inc., shared that publicly recognizing entire departments can improve the department's reputation within the organization while also helping you "get more resources" when you need them.

At Kudos, we have found that while group recognition is important, one-to-one recognition has more impact on affecting an individual's performance, sense of belonging, and engagement.

Finally, recognition doesn't just need to come from the top-down, i.e., manager-to-employee; recognition should flow to-and-from employees at all levels, which is what's known as peer-to-peer recognition. In fact, in some cases, the Society for Human Resource Management found that employees prefer to be recognized by their peers over their managers or superiors because their recognition feels more genuine.

How to Give Meaningful Recognition

How you deliver your recognition can make a difference in the impact it will have.

Here are a few things to keep in mind:

  1. Be specific: Avoid dropping a generic, "Great job!" Instead, focus on what specifically the person did to earn the recognition and, when possible, how it advanced the individual or team towards a goal, and or demonstrated how to live a core value, and or advanced a company goal.
  2. Be transparent: If someone contributed to a team effort, make sure you specify exactly what they did in order to give them the credit they deserve. Also, include why you are recognizing an individual to show your sincerity.
  3. Recognize the effort, not the outcome: The goal of sending recognition is to encourage and reinforce positive behavior in your organization. By recognizing the work and thought that went into an accomplishment, you are not only providing meaningful recognition to the individual but also signaling to the broader organization what type of effort gets recognized.
  4. Make it meaningful: Recognize when it truly is warranted, using the two points above as a guide (specificity and transparency.) Gallup explains that “if everyone wins, no one wins” and that a recognition approach where everyone gets a turn regardless of the quality of their work can breed “resentment and, ultimately, cynicism.”
  5. Organizational values and mission: Tying recognition back to organization’s goals can make an employee feel like their contributions matter to the organization’s success. In fact, Human Resources Today’s definition of Employee Recognition mentions this exact point “Employee Recognition is nothing but the acknowledgment of an individual or team for their hard work, efforts, and accomplishments that go with the organization's goals and values.”

Here are some templates to help you get started:

Finally, It's all in the delivery. To enjoy all the benefits of recognition discussed above, like increased productivity, employee engagement, and reduced turnover, the delivery method must be effective. Luckily, as employee expectations have changed, so has technology. Where recognition used to be more at the individual manager’s discretion and generally hidden from the rest of the company, organizations who want to build a culture of recognition have implemented employee recognition platforms to streamline the process and create more transparency and accountability surrounding who is receiving recognition and how often. The recognition platform leaders provide a system that facilitates peer-to-peer recognition driven by values and visible to the entire organization – and robust analytics to track and measure success.

Points are not the point. Today, recognition is often confused with rewards, specifically points that employees can use toward gift cards or other perks. While rewards are a fantastic tool to reinforce performance and contribution, they are not interchangeable with recognition and certainly don’t have the same long-lasting impact on employee engagement. In a Gallup study, money or financial reward ranked fifth as the most memorable form of recognition, after public and private praise, positive reviews, and added responsibilities. Simply put, if points are the central element of a recognition moment, that is a reward program, not a recognition program.

In 2021, recognition is a critical component of any organization's human resources strategy. The ROI of recognition is undeniable. With hybrid workforces as the new normal, having a plan for employee engagement regardless of geography should be top of mind for every c-suite. If it isn’t, we challenge you to add it to your next management team meeting agenda to start the conversation.

Partner with the leaders in recognition. Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce. Book your demo today!

Remote Work

5 min

min

Communication & Remote Work: Assess Your Skills

Communication & Remote Work: Assess Your SkillsCommunication & Remote Work: Assess Your Skills

Employee engagement and communication are closely tied. The moments of connection, inclusion, and community created by strong lines of communication are invaluable to organizations.

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This article is part 4 of our 5-part Employee Engagement and Culture Checklist Series:


“Communication makes the world go round. It facilitates human connections, and allows us to learn, grow and progress. It’s not just about speaking or reading but understanding what is being said – and in some cases what is not being said.” -Richard Branson

The last year has caused a great deal of disruption in our usual work environments, and especially our means of communication. For those who have made the shift to remote or hybrid work for the foreseeable future, our ability to communicate effectively has been tested.

The Importance of Communication in Employee Engagement

Employee engagement and communication are closely tied. The moments of connection, inclusion, and community created by strong lines of communication are invaluable to organizations.

Cultures of good communication aren’t easy to build and maintain, but they pay big dividends. By promoting open and consistent communication standards, organizations foster higher engagement levels – and keep in mind, highly engaged workforces are over 20% more profitable.

So, how do your communication skills measure up? Use the list below to assess how you’re doing and identify gaps in your remote-work communication toolkit.

1. Non-verbal Cues

The lack of non-verbal cues created by working in a remote setting can lead to miscommunication, defensiveness, and conflict. That said, there are some non-verbal cues still available, primarily via video calls. And while we are all aware of “Zoom-fatigue,” those video calls are essential to assess whether your message is being received.

Non-verbal cues also go beyond body language. Managers should take the time to interpret the tone of their employees' emails and messages to check for signs of distress, frustration, or burnout. Messages sent late at night, frequent errors, and a curt tone are some red flags to look for.

Finally, more overt actions or displays of disengagement like absenteeism or non-participation in meetings can be a red flag and a sign of a communication breakdown.

Ask yourself:

  • Do I monitor the wellbeing of my colleagues by reading non-verbal communication on video calls?
  • Do I assess the tone of voice in email and chat messages?

2. Access

Is your virtual door “always open?” Open-door policies are important whether you are in the office or remote. Sometimes your team needs to reach out outside of scheduled meetings and check-ins. In a survey conducted by Slack, 46% of remote workers believe the best managers are the ones who check in often. What’s more, a different study found that 84% of remote workers hide workplace concerns for a few days before informing higher-ups, and 47% admitted that they didn’t address issues for more than a week. With that said, it’s also important to set boundaries – you don’t need to be available 24/7 just because your office is your home. If a task needs your undivided attention, book that time in your calendar and set any messenger apps to “do not disturb,” and book other time slots to answer any questions that come up that day at a time that works for you.

Some managers address this by setting up “office hours” on Zoom where they sign into a Zoom room for an hour or two a week so their employees can pop in as needed to collaborate or ask questions.

Ask yourself:

  • Am I easily accessible to my team if they need me?
  • Do I answer instant messages or emails in a relatively timely manner?

3. Accountability

Accountability becomes even more critical in remote work environments. Without the visual cues that come with working in a shared space, your colleagues might be worried about your ability to meet an approaching deadline, especially if you haven’t communicated progress and/or have missed deadlines in the past. It's easy to give someone a quick nudge in the office's lunchroom, but it can feel intimidating to send a written message or email when working remotely.

The good news is, building trust and accountability in a virtual work environment is possible, according to Forbes. Some of their recommendations include: be predictable, be easy to read, support others, hold people accountable and tell the truth. For example, predictability by keeping expectations clear and consistent can help employees know what they need to do their job well.

Ask yourself:

  • Do I meet my deadlines?
  • Am I transparent about my progress on projects?

4. Personal Connection

According to Gallup, many remote workers are likely to feel adrift, lost, or forgotten in their new work environment. Companies are built on relationships, and while remote or distributed teams may be physically distanced, that doesn’t mean they shouldn’t be, or can’t be, tight-knit and supportive.

The key to building personal connections? Effort. While serendipitous water-cooler run-ins may be a thing of the past, for now, it’s still possible to create solid and meaningful relationships with colleagues if you make the time.

Ask yourself:

  • Do I take the time to have personal conversations with my colleagues to learn about personal news and any outside stressors affecting their work?
  • Do I check-in with my team on wellbeing and job satisfaction?
  • Do I celebrate my team’s birthdays, work anniversaries, and special life events?

5. Clear Expectations

According to David Maxfield, managers who are explicit with their expectations have happier teams that can deliver results. Specificity is critical in remote settings so that employees can get to work independently without waiting for guidance. Instructions like “let’s do this sooner rather than later” or “let’s talk next week” can be stressful and confusing, especially for remote workers who can’t just pop their head into your office for advice.

Ask yourself:

  • Am I clear about what I expect from my team?
  • Do I communicate clear timelines and next steps?

6. Individualization

One of the keys to engaging employees is meeting their individual needs and tailoring their work experience to their preferences. The global pandemic left many workers caring for children and elderly parents during work hours – offering flexible work schedules can help ease the burden for them.

Generational preferences should also be considered, with millennials typically preferring email or chat over phone calls, and Gen X or Boomers typically preferring a traditional phone calls over a video conference. Regardless, it’s essential to take the time to understand your team’s preferences and accommodate them whenever possible.

Ask yourself:

  • Do I know my team’s communication preferences?
  • Am I considerate of other people’s time? If someone has a packed calendar, do I book their last remaining 30-minutes, or do I find a day when they have fewer meetings?

7. Recognition

A strong culture of recognition helps drive employee engagement and performance. Regularly communicating recognition is vital in a remote-work environment. When employees aren’t physically together, it can be easy to get caught up in daily tasks and forget to recognize a job well done. It doesn’t have to be complicated – a Deloitte study found that 85% of employees simply want a thank you (vs. a gift or celebration.)

A robust recognition platform like Kudos streamlines recognition across an entire organization. Peers can recognize and thank each other for great work, and managers can recognize their employees and spotlight their contributions for the organization to see.

Ask yourself:

  • Am I providing regular, meaningful recognition to my employees and colleagues?

8. Company Communication

Finally, communication and direction from executives and leaders must be considered and factored into any kind of communication review. Company news and successes should be communicated transparently and freely to keep employees informed and included. According to a report by PRovote (formerly The Holmes Report), companies with effective communication strategies have 47% higher returns to shareholders, more engaged employees, and less employee turnover.

Gallup’s Q12 framework is an excellent place to start when building a broad employee communication strategy. Gallup has identified 12 foundational elements of employee engagement, and using this framework as a guide, leaders can tailor communications to meet their employee’s common questions and needs. Some of the twelve elements include:

  • Q2: I have the materials and equipment to do my work right
  • Q5: My supervisor, or someone at work, seems to care about me as a person
  • Q8: The mission or purpose of my company makes me feel like my job is important

Ask yourself:

  • Does my organization have a clear communication strategy?
  • Do my leadership team’s communication efforts reflect the 12 elements of the Gallup Q12 employee engagement framework?
CommunicationsBlogGraphic

If you answered yes to most of the questions – congratulations! You have exceptional communication skills and are setting your team up for success in a remote work environment.

If this assessment made you realize that there are some gaps in your communication skills - don’t be discouraged. Everyone is still adapting to the changes 2020 brought; it’s important to be patient with yourself and focus on minor improvements every day.

With that said, communication is vital in understanding what remote workers need to perform their job today, which could be different from what they needed six months ago and will likely look different six months from now. Continuously assessing and improving your communication skills is the key to fostering a thriving and engaged workforce.

Culture

5 min

min

Is Happiness at Work Important?

Is Happiness at Work Important?Is Happiness at Work Important?

With the reality of permanent remote work settling in for many, the distinction between work and personal life is blurred, making happiness in our work more imperative than ever to avoid burnout.

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Are your employees happy?

Every year on March 20, the world celebrates the United Nation’s International Day of Happiness. Action for Happiness, a not-for-profit dedicated to "building a happier and more caring society," spearheads the celebration with events, resources, and ideas on how to take action.

With the reality of permanent remote work settling in for many, the distinction between work and personal life is blurred, making happiness in our work more imperative than ever to avoid burnout.

Additionally, we're finding more and more evidence indicating that organizations perform better when employees are happy. In fact, organizations with happy employees have reported increases in productivity (17%), higher sales (20%), and higher profitability (21%).

Now that I have your attention, I'll ask again, are your employees happy?

How to spot an unhappy employee

Studies show that managers account for at least 70% of the variance in employee engagement scores. That means that before you investigate, you must consider employees as individuals or small teams vs. one large group. Everyone's experience is different.

According to Entrepreneur magazine, some signs of employee unhappiness include:

  • Only contributing the minimum and not going beyond a job description
  • Limited personal engagement, such as a lack of humor and connection with colleagues
  • Lack of new ideas and a general lack of passion and interest in success and improvement
  • Secrecy or lack of transparency, such as limited feedback or openness about problems
  • Visual cues like blank expressions, sighing, fidgeting (these can be tricky to spot in remote work environments)

So, what can you do to improve employee happiness?

There are many ways to address and create happiness. The United Arab Emirates, for example, has a dedicated Minister of State for Happiness overseeing a "National Programme for Happiness and Positivity." Now, you may not be able to create a position solely dedicated to managing employee happiness, but you can do something equally as powerful, at little to no cost.

Make happiness one of your organization's core values.

To be clear, happiness as an organizational value does not mean employees "must be happy." It means that happiness is valued, whether it's an employee, manager, or customer. What's more, if you consider some of the more common organizational values, happiness would not be out of place. For example, "respect," "trust," "passion," and "caring" are all in the top 20 corporate values in the United States.

Values give every member of your organization a sense of direction and a definition of success in every interaction and task. But don't take my word for it; take the lead from some fantastic companies who have happiness-inducing organizational values guiding their teams; here are some examples:

  • Fun! (The Honest Company)
  • Create Fun and A Little Weirdness (Zappos)
  • Playful (Spotify)
  • Make Friends (Virgin Atlantic)
  • Happiness (Kudos)

Identifying happiness as a value is the first step towards enjoying all of the benefits a happy workforce can produce. According to Annie Mckee, author of "How to Be Happy at Work," there are three things that employees need to be happy and engaged:

  1. A meaningful vision of the future: In a study by Annie Mckee, the number one thing that hindered happiness in her subjects was their inability to understand how they fit into their organization’s future. Happy employees can see a clear career trajectory within their organization. One easy way to fix this is to have regular 1-1 meetings with staff to understand their goals.
  2. A sense of purpose: Today’s employees want to feel like they’re making an impact; on their team, within their organization, for their customers, and even the greater good.
  3. Great relationships: A study by Gallup shows that women who have a best friend at work are over twice as likely to be engaged than those who don't. It doesn’t stop there. Beyond happiness, the same study reported that when more employees have a best friend at work, there are fewer safety incidents, more engaged customers, and higher profits.

Identifying happiness as a core organizational value will help encourage managers to prioritize the three points above, as well as your employees’ well-being in general. At the end of the day, organizational values shape culture, and in the words of Zappos.com CEO Tony Hsiesh, “If you get the culture right, most of the other stuff will just take care of itself.”

Bonus tip for improving employee happiness and engagement:

One thing everyone can do to help themselves be happier is showing more gratitude for the people around them. Recognizing others and showing appreciation does more for the ones giving the recognition than those receiving it. Amongst many other benefits, Dr. Robert A. Emmons, Ph.D., a leading gratitude researcher, has proven that gratitude can increase happiness and reduce depression.

Companies can use tools like Kudos as a hub for showing gratitude to prioritize and improve employee happiness. As Shawn Anchor, author of “The Happiness Advantage”, shares in his famous TED talk, creating happiness and fostering positivity in our day-to-day life helps our brains work harder, faster and more intelligently.

Here are a few more TED Talks to inspire you and make you smile today – share with your network and make someone’s day!

Create happiness with Kudos®. Kudos is an employee engagement, culture, and analytics platform, that harnesses the power of peer-to-peer recognition, values reinforcement, and open communication to help organizations boost employee engagement, reduce turnover, improve culture, and drive productivity and performance. Kudos uses unique proprietary methodologies to deliver essential people analytics on culture, performance, equity, and inclusion, providing organizations with deep insights and a clear understanding of their workforce. Book your demo today!

Culture

5 min

min

6 Ways to Live by Your Organization’s Core Values in 2021

6 Ways to Live by Your Organization’s Core Values in 20216 Ways to Live by Your Organization’s Core Values in 2021

Clear values give every member of your organization a sense of direction and a definition of success in every interaction and task.

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This article is part 3 of our 5-part Employee Engagement and Culture Checklist Series:

In the last year, our resiliency as individuals and organizations was tested beyond what many of us could have ever imagined or prepared for. Even so, many of us have adjusted reasonably well to new safety measures, virtual meetings, and living in our 6ft bubbles. That's not to say that we aren't still mourning the loss of camaraderie, connection, and collaboration that comes from working in a communal space. So now that the dust has settled, how do we begin to get back to what we may have lost and forge ahead to achieve our goals in 2021? We need to get back to our core with a renewed focus on our mission, vision, and values.

Organizational Values and the Bottom Line

Clear values give every member of your organization a sense of direction and a definition of success in every interaction and task. The right core values can drive belonging and wellbeing, improved employee engagement, and reduced turnover. But perhaps most importantly, tying performance measurement and recognition to those fundamental values enables you to build a resilient workforce with a robust culture, laser-focused on what matters most to your organization. Relating all actions and decisions to your core corporate values does improve your business performance.

The only problem is, according to Gallup, only 23% of employees strongly agree that they can apply their organization's values to their work every day. Sound familiar? These six tips should help you start the work on bridging that gap.

Here’s how to do it:

1. Define What Your Values Look Like in Action

Sometimes values seem too aspirational or worse, like corporate fluff. However, chances are that substance and value can be distilled from the values your organization has chosen. Identifying specific behaviours tied to each value allows your team to truly see your values as their North Star, guiding them in making decisions in day-to-day tasks. This can be especially helpful in organizations where employees work remotely, with less supervision or guidance readily available.

Let's break down some behaviours that could be tied to particular values, including Integrity, the most popular value in US companies, according to a recent MIT Study.

company core values chart

Remember that your values will also dictate how your employees treat your clients – that should help spell out specific behaviours that matter.

Try This: Take some time at your next management meeting to define critical behaviours for each one of your core values. If you can't, chances are your employees can't either, and it might be time to revisit your values.

2. Communicate Values Consistently and Often

For your values to help you drive the culture and performance you’d like to see, your employees need to know them! Organizational values are often buried in employee manuals and/or deep in the corporate intranet. It’s likely that many of your employees don’t even know your values, which may be why just 27% of employees believe in their core values, according to Gallup.

Many organizations are getting creative about spreading the word, incorporating values into their office décor, while others display values in their standard email signatures. The common theme is to give your values a presence and have them live center stage. For a remote workforce, this could look like customer Zoom backgrounds, desktop background images, or on the homepage of your company intranet.

Try this: Why not make your values easier to remember by developing a clever acronym! But remember, this comes after you’ve identified your core values – do not determine your values based on an ideal acronym. For example, here at Kudos, our core values are:

 Transparency
 Happiness
 Accountable
 Nnovation
 Kollaboration

We made a simple and relevant acronym work for our values, not the other way around.

3. Recruit and Hire with Your Values in Mind

After you've identified key behaviours and associated them with your values, start looking for people who display those behaviours as part of your hiring process. Share your values openly and communicate to your candidates that they should be looking for value-alignment as well. Be open and honest in your interviews - If you know your organization values punctuality, and a job candidate indicates that they don’t see the importance of every meeting starting exactly on time - they might not be the ideal fit.

A great example of a company being open about values in recruitment is the meal-kit company HelloFresh. Their career page features their values front and center, essentially communicating to candidates, "we aren't interested if this isn't you." Check it out. Another example is popular online shoe and clothing retailer Zappos. They have a recruitment video that displays their culture in a radical way with the purpose of attracting people who are aligned with their values and repelling those who wouldn’t fit in.

Try this: Work with your HR team to craft behavioural questions to discover if the candidates fit your core values. Here are some practical behavioural-style interview questions to get you started.

4. Consider the Do/Say Divide

Leaders and executive managers are always being watched closely by the rest of the organization. Employees look to management for cues on how to act and react, especially in unusual or challenging situations (like what we experienced over the course of the last year). Leaders need to embody the core values they want their employees to live by. If transparency is a core value, leadership must be open with the entire company about any challenges they are facing. If collaboration is a corporate value, leaders should have representation from all company levels and functions on any special projects or working groups.

A great example of this is how Microsoft handled the onset of the global pandemic in 2020. Microsoft's corporate values are respect, integrity, and accountability. When Covid-19 first hit in March, Microsoft announced that they would continue to pay all hourly service providers their regular pay during the period of reduced service needs, embodying those values at a time when all employees were watching.

Try this: Next time you're faced with a difficult situation (a core employee resigns, you lose a big contract), think about whether your reaction embodies your core values and make the necessary adjustments. Remember that your employees will follow your lead.

5. Work and Play by your Values

Consistency is critical when communicating the importance of your values to your team to show your commitment. If one of your core values is health and wellness, but you celebrate your wins with cake and alcohol, that doesn’t really align – does it? For your values to stick, you need to live them in all aspects of your organization.

Here’s a great example; one of Airbnb’s core values is “Be the Host,” so fittingly, during an annual meeting, they encouraged local employees to host their visiting colleagues for dinner at their home or at a local restaurant. This is a perfect example of truly living your values.

Try this: Challenge your social committee to tie any staff events and celebrations back to your corporate values. If something isn’t clicking – change it! Showing you are committed to living your values helps get others on board.

6. Recognize and Reward Value-aligned Behaviours

One of the most straightforward ways to reinforce your values into your corporate culture and day-to-day life within your organization is to recognize value-aligned behaviours. That can happen formally as part of performance reviews but also informally through regular recognition. Informally recognizing value-aligned behaviours and contributions helps keep values top of mind, helping to build the culture you need to succeed as an organization.

Try this: Consider an employee recognition and engagement platform like Kudos to make daily peer-to-peer recognition easy. With Kudos, specific value-tied behaviours must be associated with each recognition message, essentially hardwiring your values into your culture.

Corporate values are a powerful tool that should not be ignored or brushed over. The right values have the power to connect your workforce and drive everyone toward a shared goal. To get there, you must incorporate your values into daily life and truly live your values every day. When values are distilled down from broad and aspirational statements to clear behaviours, employees are equipped with clear expectations, allowing them to do their job in a meaningful and valuable way, leading to improved organizational performance.

Ready to get your organization living your values every day in 2021? Book your demo at Kudos.com today to learn how we can help! Kudos is the modern employee engagement system the world needs today. Kudos is simple to set up, easy to use, and integrates with communication tools to put culture and recognition front and center. Our system allows you to connect, communicate, and celebrate everything that makes your organization unique and successful. With the simple power of a "Thank You" – you can increase engagement, connect remote teams, improve inclusion, enhance productivity, and reduce turnover.


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