Whew.

Just finished up my third book tentatively titled Narrowing the Focus while Expanding the Scope.  It’s about Rewards and Recognition, sort of a “how-to” book for my publisher WorldatWork (yea, the want me to squish the name together as I just wrote it)…

Although I wasn’t specifically asked to include content on how to measure the effectiveness of the R&R system, I chose to do so anyway.  H.R. seldom talks about linking their strategies to outcomes and ultimately to the success of the organization.  I often hear that human resource professionals are “warm and fuzzy” and “do the right things because they are the right things to do”.  Isn’t that just horrible.  Being good to employees ’cause our moms and dads brought us up that way.

But when budgets are shrinking or being cut completely, H.R. professionals need to talk the lingo of the executive suite.  So, here is a little taste of my upcoming book:

Study after study has shown the direct link between customer satisfaction and revenue.  In the 2008-09 Employee Hold’em National Workforce Engagement Benchmark, Fully Engaged employees are significantly more likely to exhibit the attitudes and behaviors that enhance customer loyalty:

 ·       99% of Fully Engaged employees were strongly committed to making their company successful compared to 46% of Unengaged employees

·         98% of Fully Engaged employees were highly motivated to work hard compared to 34% of Unengaged employees

·         96% of Fully Engaged employees had a strong desire to go the extra mile for customers compared to 57% of Unengaged employees

Sounds good, huh?  But what gets measured gets managed.  So measure the effectiveness of your Rewards, whether they are formal, informal or spot awards.  It’s not tough, it just takes a little planning.

Look to external measurements, such as customer retention. What percentage of your customers continue to buy your products over time, and how many are you able to “up-sell”?  Customer satisfaction surveys allow you to gauge the relationship you have with your customers, but make sure you focus on the “after-sales care and support” staff.  Remember, customers buy products from your company, but form relationships with your people.  Concentrate your “linkage” on the CSR’s (customer service reps), the Account Executives, and the Sales/Marketing people, the same folks that can make or break your quality of service.  Find out if customers think your company is easy to do business with, is willing to cut through red tape, and has staff available and knowledgeable about the products they buy from you.

Tie your R&R to internal metrics that may already be captured in your organization.  Tenure, length of service, parts per million defects,  productivity per employee, and even voluntary terminations can be indicators of a well designed (or poorly designed) program.  Find questions in your annual employee survey that ask about the company’s rewards program.  Look at 360 feedback surveys to find out if peers and subordinates believe a manager is ensuring that the best employees receive the greatest rewards and recognition.

And perhaps most importantly, start asking finance for P&L measures, like revenue per employee, net income, EBITDA, changes in sales, share of wallet, or share of market.  By linking the quality of a Reward and Recognition program to the bottom line success of the organization, you’ll be more likely to ensure continued resources for the program, and be seen as a business-person who just happens to be responsible for the Human Resources of the organization… your assets with feet.

What gets rewarded gets done.  What gets measured gets managed.