Discover insights on employee recognition and engagement, workplace culture, performance management, people analytics, and more.
Each time you receive recognition or gratitude, your brain releases a chemical called serotonin. This chemical helps regulate your emotions and enhance your mood. Appreciation positively impacts your personal world, as well as your professional one.
Recognizing and appreciating your employees should be a year-round priority, but sometimes you need to go above and beyond. This Employee Appreciation Day, March 4, make sure you have a plan to celebrate your team.
Here are some ideas to get you started:
This day is about celebrating your employees. Give them an opportunity to express what would make them feel appreciated. There are many tools to distribute surveys to your employees. Plan to send the survey well before Employee Appreciation Day, so that you can plan the day around the responses.
Thanking your employees for the simple things they do every day has a great impact on your organization. Try celebrating each employee for their unique contribution to the team by sending personalized notes. Remind your employees that they are valued, and that their work does not go unnoticed.
Let your employees pursue their passions by giving them a paid afternoon off. What better way to appreciate your employees’ dedication than allowing them some much-needed time off to relax, be with their family, or take an extra-long weekend?
Some organizations don’t consider the sheer cost of commuting to work. Some employees can spend up to $5,000 annually just transporting to and from work. You may not be able to cover all transportation costs, but you could reimburse your employees for bus and train passes or offer them a paid parking pass.
Don’t just celebrate internally – tell the world you appreciate your employees. Work with your marketing team to build a plan for spreading the recognition on all of your social media platforms.
We know that showing appreciation in a work-from-home environment can be a struggle, but you can still host virtual lunches or happy hours with your employees. Send pre-paid Uber Eats gift cards to your employees and celebrate together virtually.
Dedicate an afternoon for planning remote games. This is a great way to promote virtual team building, while giving your team the opportunity to bond outside of work.There are many online games you can play to make remote socialization creative and engaging.
Work with your Human Resources team to create internal awards to honour your employees. These could be awards like Employee of the Month or Best Team Player. Go the extra mile and create customized engraved trophies for the winners.
Coffee mugs, t-shirts, and customized pens don’t send a genuine message of appreciation to your employees. Instead, give your employees options to choose from – not everyone wants a gift card or free food. Discover how to meaningfully reward your employees by offering multiple choices.
When was the last time you checked in on your employees' work-from-home equipment? Do they have everything they need to be productive and successful? Show your appreciation by ensuring their equipment is up to date and reliable. A new standing desk, new chair or better monitor could demonstrate your gratitude to your employees.
Appreciation should be built into your culture – not just set aside for one day out of the year. If you’re wondering how to incorporate ongoing employee appreciation, here are some solutions to investigate:
One of the most common reasons employees’ leave their jobs is because they feel unrecognized. Meaningful recognition allows employees to see their organization’s values in action and feel appreciated for their contributions. Employee recognition solutions, like Kudos®, make it easy for managers and peers to recognize employees regularly.
Don’t let these moments go unnoticed. Your employees deserve recognition on birthdays, anniversaries, and each milestone in between. Simply sharing an e-card for team-members to sign
It might be time to review your organization’s values to ensure they still align with your employee’s. Forbes research finds that more than 50%of employees will leave their jobs if company values no longer align with their own. Lead by example and incorporate recognition into your brand’s core values.
83% of employees feel more loyal to their employers if flexible work arrangements are available to them. This can include working from home, flexible hours, part-time options, and paid leave. Start focusing on results and deadlines, instead of how many hours your employees work.
Appreciate your employees for the dedication and time they invest in the company. It’s important to give your employees the opportunity to open-up about any stress or burdens they’re feeling. Teams perform better when members believe their leaders respect and appreciate them.
After a disruptive couple of years, many organizations introduced adjustments in order to keep their talent. More organizations are now expected to offer remote arrangements, work-life balance and improved health benefits. These adjustments have significantly changed how we see the future of work; however, employee expectations are constantly evolving. Here are the trends HR leaders should focus on in 2022.
According to a Gartner survey, 59% of HR leaders consider building critical skills within the organization a top priority. However, many HR leaders are struggling to predict the skills their employees will need for their organization to succeed in the future. HR leaders are also struggling with rising turnover rates due to increased competition for talent. Although remote work has widened the talent pool, it also means it’s easy for employees to find work elsewhere if their needs are not being fulfilled at their current place of work. In addition to actively disengaged employees having an easier time finding new work, the competition and constant recruitment efforts from global businesses mean that even moderately disengaged employees pose a much higher risk of leaving than they did before. Gartner suggests organizations should build a more adaptable workforce by structuring talent management around skills instead of just roles.
There’s no denying there has been a lot of change in the workplace over the last two years, and leaders need to recognize when their employees could be feeling burnt out. Today’s average employee can absorb only half as much change before feeling fatigued as they could in 2019 (Gartner). There are many ways HR leaders can foster a positive change experience:
Many factors go into creating a healthy workplace, all of which should be considered a priority. Workplace health is not just work-life balance; healthy employees will form healthy relationships with their coworkers. Here are some factors to consider when trying to build a healthy work environment:
A healthy work environment means offering your employees the support they need. 62% of employees identified well-being benefits (including financial, mental health and physical well-being) as a key factor when applying for a job. In addition to that, 80% of employees want support and guidance from their employers on personal finances. HR leaders should move away from universal benefit packages and lean more towards a personalized approach, with the goal of being a workplace culture of care that meets the needs of everyone. There are also EAPs (Employee Assistance Programs) available for organizations to utilize that provide counselling for employees both personal and work-related.
The global pandemic has shifted how we work in so many ways, with work-from-home or hybrid work arrangements being one of the most significant. Some of your employees may thrive in a work-from-home environment, while others may prefer a hybrid situation where they can still go into an office if needed. However, flexibility is not just about where employees work; it also means allowing employees the ability to adjust their work schedule to accommodate their lifestyle. Many of us have other priorities outside of work and a non-flexible work schedule can be a massive deterrent for employees.
Focus on results and deadlines instead of the number of hours employees are working. Not everyone is productive during the same time periods, and part of adopting a more inclusive mindset is allowing your employees the freedom to design their work schedule. Utilize technology and move towards a productivity-anywhere approach and make your work systems easily accessible for all employees.
Your future employees aren’t interested in working for an organization that is behind on updating its company values. Forbes research has found that more than 50% of employees will leave their jobs if the company values are no longer aligned with their own. It is vital that HR leaders ensure they are closing their employee expectations gap by engaging with their employees and are committed to incorporating what their employees value into the organization.
A major component of this is representation and diversity. Gartner research revealed there were only 29% of women and 17% racial minorities in c-suite positions. Low diversity in leadership positions is a result of a lacking DEIB (diversity, equity, inclusion and belonging) strategy. HR leaders need to incorporate consequential accountability instead of collective accountability in their DEIB strategies and hold the leaders within their organization accountable for DEIB outcomes.
Regular, meaningful recognition will be critical in 2022. 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.
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. Modern recognition platforms like Kudos® make it easy for managers and peers to recognize employees regularly, regardless of their location.
Hybrid work arrangements are the new normal, skill-based hiring is shifting HR practices, and employee well-being is becoming a pivotal concern everywhere. This new world of work is encouraging leaders to ask important questions about their organization’s current challenges and how they are going to invest in the right solutions. The HR landscape in 2022 is not just about the best business practices but rather shaping the future of work.
Don’t shop for a product. Shop for a solution.
Employee recognition is a key pillar of your overall business performance. Finding the right tool to keep employees engaged can be overwhelming, so we’ve created an Employee Recognition Buyer’s Guide to help you make the best decision.
Our guide is 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:
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.
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 to help you decide which platform best suits your organization’s needs. Each answer to our strategic questions will identify the main problem you need solutions for. Our self-assessment exercise contains insightful topics like:
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 these questions, and more:
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 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 about 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.
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, the cost of disengagement, and use detailed checklists to keep track of the various features each platform offers.
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 included a simple, but informative framework for successfully presenting your solution to stakeholders. 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 find the right solution. Make your decision easier by downloading your free copy of our Employee Recognition Buyer’s Guide today.
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.
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.
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.
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.
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.
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:
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.
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:
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.
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.
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.
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 on their shoulders.
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.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 – everyday. 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 demonstrating 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.
The first step in understanding the value of your recognition program is to demonstrate it as an urgent need 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:
2. Turnover Rate
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 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 like 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:
2. Cost of Turnover
Turnover can be both voluntary (leaving for another job) and involuntary (being let go). Both have a significant financial impact on organizations.
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.
3. 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 the specific costs 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.
The cost of disengagement as well as two of the most common by-products of disengagement, turnover and absenteeism, are substantial. But, there are many ways employers can 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.
Using the three costs described above, (Absenteeism, Turnover, and Disengagement) simple plug-and-play equations can lead you to a powerful ROI presentation.
As illustrated below, we use a hypothetical situation that reflects many organizations. This example is described in more detail in the webinar recording.
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 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
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 hard to ignore as a business leader. The best thing about the ROI of employee recognition 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.
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 blow your leaders away with the hard numbers.
As a recap, the steps are:
1. Identifying Desired Outcomes (e.g., lower turnover)
2. Identifying Relevant Metrics (e.g., turnover rate)
3. Quantify Costs and Set improvement goals (e.g., turnover costs 20% of the employee's salary, we want to reduce by 5%)
4. 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!
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).
Organizations are overwhelmingly finding that to take part 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.
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:
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.
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):
✓ 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.
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:
Here is a preview:
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.
When comparing vendors in the HR and 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, an information security expert, answered some common questions about this important certification.
SOC 2, developed by the American Institute of CPAs (AICPA), is a voluntary compliance standard which specifies how service organizations should manage customer data. The standard is based on the following Trust Services Criteria: security, availability, processing integrity, confidentiality, and 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 within and outside the firm.
“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,” said Maphosa. “It also means more time spent investigating their security practices.”
For Kudos clients, SOC 2 compliance indicates they’re partnering with a provider who meets rigorous standards. Since the report is an independent validation, the client feels more assured that the company follows through on security, privacy, and compliance promises.
Software and vendors in the HR and 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 stored in the Kudos platform, including individual personal profile information and the contents of recognition messages, is all secure and private.
Given the sensitivity of personal data involved in all aspects of Human Resources Management, Kudos views SOC 2 compliance as a necessary demonstration of client support.
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.
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. That’s why values are such an integral part of the Kudos employee engagement and recognition platform. But to get there, you must align your corporate values to your strategy and demonstrate them daily.
When values are distilled from broad, aspirational statements to clear behaviors or qualities, employees gain clear expectations of which behaviors will help them work in a meaningful and valued way.
Why Should HR Professionals Care about Values?
Why Should Organizational Leaders Care about Values?
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. That being said, 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."
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 based on differentiation, specifically developing unique capabilities fuelled 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 makes sense for their values to differ fromGoogle’s.
At the highest level, strategic planning 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.
Chances are, you already have a set of corporate values described on your company website, but do they truly align with 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.”
In turn, Zappos refers to its 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.
"23%of employees strongly agree that they can apply their organization's values to their work every day."
With your strategic core values set, the third step is defining what those values look like in action through distinct behaviors or qualities.
Identifying specific behaviors tied to each value guides your team through daily decision-making. 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 specific qualities the person being recognized displayed – all of which are tied back to your corporate strategy(Step 1.)
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:
Finally, having strategically aligned values and 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.
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 can improve 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. A culture of recognition built through Kudos® will lead to a high-performing culture. Aligning your values to recognition is a simple, yet powerful tool to achieve your results.
Here’s what this looks like in action, using the Google and Zappos examples:
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.
Company Name: Cultural Vistas
Industry: Non-profit Organization
Head Office: Washington, D.C. & Berlin
Kudos Champion: Laura Gross, Director of Administration, People + Culture
The American non-profit organization, Cultural Vistas, believes, "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 to the U.S., 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. They equip 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 team of passionate and hardworking employees to fulfill. Before the onset of the pandemic in 2020, 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 said, "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."
Unsurprisingly, when the pandemic hit in 2020, all exchange programs were frozen due to international travel bans leading to a halt in 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.
Laura said, "as a non-profit, we don't have the highest, most competitive salaries; we need to find other ways to add value for our employees." This is a common trend – Cultural Vistas is not alone in the struggle. Salaries at non-profits 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 keeping employees happy in their non-profit roles.
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. Above all, they wanted to keep employees happy and passionate about the cause.
The social committees of each office quickly merged into one powerhouse committee; made up of employees from all departments and levels, holding weekly meetings that anyone could contribute to. 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. We 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 non-profits 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 they are proud of.
“We’ve added the Kudos platform into our official benefits offerings,” Laura said. “It’s promoted and discussed in offer conversations as both a cultural and financial inventive.”
"In a surprising twist, a global pandemic that jeopardizes the future of our entire field has also boosted staff morale," Laura said. "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," Laura said.
"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 may forever be a challenge for non-profits like Cultural Vistas – they can still compete with higher-paying for-profit counterparts by operating in a nimble and employee-centred 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.
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?
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.
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.
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.
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?
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.
According to Josh Bersin, today, most recognition programs out there 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.
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.”
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.
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:
Generally speaking, 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.
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:
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.
Suggested Further Reading:
Generally, 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 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 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:
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!
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:
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:
With that in mind, here are 7 methods and metrics you should use to measure your workplace culture:
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.
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.
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.
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.
Tracking business KPIs in conjunction with efforts to improve culture can also provide valuable insight. Work with your finance team for data like:
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.
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 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!
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.
Analytics are 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 as well as 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:
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!
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 do 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:
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:
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.
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.
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.
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?"
Why are you proposing this system or solution? While this is a simple question, your finance team will be looking for specific answers.
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.
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.
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."
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.
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:
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.
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.
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.
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.
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.”
By prioritizing and streamlining recognition, HR Administrators can benefit from a consistent, transparent, and equitable program, and employees are happier. CFOs appreciate the 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:
Company Name: Saxton Horne Communications
Industry: Marketing, Advertising
Head Office: Sandy, Utah
Kudos Champion: David Blain, President
“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 LarryH. 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.
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 happen and be what it is, or you can intentionally create it,” said Blain. “And we decided that we were going to create a culture of recognition.”
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 everyday 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. 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 their colleague's spouses and significant others, 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 during his previous work with an organization that used it. He recognized that to build the culture he wanted, he needed a robust system in place to create a great, measurable culture.
Sometimes, implementing new software can raise brows. Still, Kudos was welcomed with open arms by the Saxton Horne team. The energy and sentiment of Thank You Week recreated daily through recognition messages, flowing between employees and leadership.
There were even some unexpected benefits of Kudos:
Unsure of what would happen to their business, David laid off staff, reduced salaries, and cut costs wherever possible — all with a heavy heart.
Unfortunately, that meant software programs like Kudos had to go.
And while the guilt of layoffs and salary cuts weighed heavily on management as the whole world watched the pandemic escalate, 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 Blain. “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,” joked Blain.“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.
The club was 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,” said Blain.
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 U.S., it will coincide with many Saxton Horne employees returning to the office.
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 and 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.
Employees engagement can pay significant dividends given the cost of labor and turnover.
Today’s HR professionals and business leaders face unprecedented challenges in attracting, engaging, and retaining their people. These challenges are 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 labor costs continue to rise, the natural question for an organization to ask is, “how do we retain our talent?”
Why employers are turning to people analytics
Organizations are managing employee engagement through 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 finds just 9% of people feel they have a “good understanding of the talent dimensions that drive performance,” and only 8% report having access to “useable data.”
Luckily, the space is becoming 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 InformationSystems (HRIS) that allow for easy access to data on the recruitment process, employee retention or turnover rates, and employee demographics. But, measuring employee engagement data is a much less common practice; historically, the data has been more difficult to access beyond traditional surveys or anecdotal interviews.
Change is coming.
Employee engagement is a coin with 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 those in the room. This is not an intentional outcome from leaders — they are doing the best they can with the information they have. Fortunately, 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 their values are representative of, or understood by their workforce; but a simple report from their recognition system could show that the employees’ values don’t align. Timelines might be valued over innovation, authenticity over professionalism, or creativity over productivity.
HR professionals can work with accurate data on who their employees are, who they interact with, and what they value
A piece in Harvard Business Review (HBR) suggests that using People analytics makes human resources management more “deliberate and systematic.” With people analytics, organizations are more effective, “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, 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?
The most effective people analytics measures people’s interactions, behaviours, and sentiment over time.
Historically, HR data was only collected through surveys. The problem is, 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 their value; 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). Poor survey results can make an organization realize their need for deeper people analytics.
The most effective people analytics measures people’s interactions, behaviours, and sentiments over time. One approach to measuring employee engagement with people analytics is passive data collection, which 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 first hand which teams collaborate most often, least often, and if there are any communication siloes in your organization, to name a few. In short, behavioral and relational people analytics gives data that reflects the true employee experience.
People analytics are shifting from “pull to push”
A study from Deloitte frames this as a shift from “pull to push” where rather than actively collecting data, managers and employees can see actionable data in real-time. They’re “pushed” to make a difference.
The psychology behind why data tracking is effective in changing behavior 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."
People analytics unlock the potential to address any underlying problems
The same philosophy can be applied to people analytics in an HR context. If managers have accessible data on employee turnover rates, absenteeism, and 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.
With access to data about their behaviours and contributions, people can improve
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 behaviors, they will know 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.”
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.
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 and annual bonuses seemed to meet employees' recognition needs. 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.
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 five market factors that make recognition especially important and relevant today:
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.
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 you deliver your recognition can make a difference in the impact it will have.
Here are a few things to keep in mind:
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. And if it isn’t, we challenge you to add it to your next management team meeting agenda to start the conversation.
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
In an ever-evolving work environment, communication is perhaps the best tool to keep engagement levels high and steady. For those who have made the shift to remote or hybrid work, 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.
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.
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.
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.
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.
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.
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.
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.
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:
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.