This post is from derived from my recent post at the Compensation Cafe.

After more than two decades of slow but steady erosion and a few body blows in the recent recession, the state of job satisfaction, and more importantly the state of the overall employee-employer relationship, are at new generational lows. Employee morale is in the tank, and the willingness of workers to bolt at the next opportunity is at a multi-year high. Numerous studies have shown these trends, including the recent Conference Board report, which confirmed the multi-decade low in job satisfaction.

The 2008-2009 recession was a real punch in the gut to an already injured relationship between employers and their most "valuable" asset (at least that's what a lot of annual reports say). Between the massive layoffs, skimpy or non-existent pay increases (or outright pay cuts), and with the on-going push for "doing more with less," the foundation of the employee-employer relationship has weakened considerably over the years and is in need of some serious shoring up.

Some HR and compensation professionals have told me they think "engagement" is an overused buzzword. Even you may believe this, but just think about your typical "dis-engaged" employee and ask yourself how much value they bring to your organization?  Buzzword or not, having employees who are actively engaged in their work and believers in their organization and leadership is absolutely critical to organizational performance and maintaining a psychologically-healthy workplace, where people tend to thrive and stay.

So, what's an employer to do? How can we enhance this somewhat nebulous "engagement" concept?  If you're looking for simple/easy, "plug-and-play" solutions, they don't really exist, but here are several areas that merit your consideration:

• Increased/enhanced communication: nearly every broad-based or organizational study I've seen has shown a desire on employees' part for more communication, about their organization and their goals, and especially about their job expectations and performance. Communication takes some time and effort, but it's virtually free to provide it, so why do so many organizations fail in this key element of management and leadership?
• Increased transparency: who doesn't want to know how and why they are paid what they are? The more open you can be about your compensation philosophy/strategy, and how as an organization you're meeting the goals of your compensation program, the better off you'll be in the minds of your employees. Transparency fosters trust, while a lack of it may foster distrust.  If you have a soundly-built and competitive rewards program, what's to hide? Share the truth! I am not suggesting total transparency or gritty behind-the-scenes details, but if you've got a program you can be proud of, share it, and how your organization's' approach is a win-win for the organization and its employees.
• Recognition: recognition is the missing link in many rewards programs, and a failing of most management teams.  Can you catch your employees performing highly, going above and beyond, or notice those who provide great customer service on a regular basis? Are you ready and willing to provide genuine appreciation and recognition for/to your most valuable asset?  Recognition, a corollary of communication, is inexpensive to deliver, but can provide great psychological benefits for your workforce, and eventually to those who practice it genuinely.
• Listen, trust and empower: this may not come easy for some managers, but managers who can learn to listen better, trust in their staff, and delegate more responsibility and authority (and with the resources/tools to handle it) will find that most employees respond quite favorably to this approach. While some staff want to be led by the hand, most workers want to be heard, to have input into their work, and have the trust, resources and authority to get it done.
• Develop thy managers: Have you ever heard the phrase that people don't leave their jobs, they leave their manager (or company leadership)? Well, in most cases it's true. People tend not to leave managers and companies they respect and like working for, but they do tend to leave ones they don't believe in. Thus, it's critical that companies train and develop their management teams, as well as reward their best people managers, while dealing with the ones who aren't (see next point).
• Get your management performance act together: organizations that don't address performance issues within their management/leadership teams are destined to have morale and dis-engagement issues within their non-management ranks. Working for a poor manager makes your work life suck, is the single biggest contributor to turnover and poor morale, and is a guaranteed "engagement killer."
• Cash compensation: let's not forget that most folks are to at work trying to make a living for themselves and their families. But notice, it's nowhere near the top of my list. Dollars are very important, but you can't buy workplace love. If you were one of the many employers that engaged in wage cutting and other forms of pay-related retrenchment during the recession, then the first thing you should be thinking about is getting at least back to where you were prior to those cuts.  After that, it's time to start thinking (or re-thinking) about competitiveness with the external market for your talent. Paying competitively won't guarantee you anything, but it should reduce pay-related turnover, and enhance your ability to attract and keep talent. Don't believe that just because the labor market is a mess right now that it renders this topic as unimportant. Staying competitive always important, as there is always a market for top talent.  Several studies have shown that a high percentage (over 50%) of the workforce is ready to move onto the next opportunity when it presents itself, so don't help push them out the door by ignoring this critical aspect of the "employment deal."
• Developmental opportunities for professionals: when times get tough, training and development budgets are usually one of the first things to be cut. If that's the case at your organization, you should help to make it one of the first things to be restored. Beyond being appreciated, communicated with and paid fairly, the opportunity to learn, grow and develop is high on many people's importance list. A lack of growth and learning opportunities is a significant competitive disadvantage for any employer, but especially in the so-called "knowledge" industries (technology, scientific, engineering-related, etc.) where ongoing education and learning form the collective knowledge backbone of the organization.

Well, that's my list.  I'd like to hear your thoughts too.  Go forth and actively nurture satisfied, motivated and engaged workers!

Doug Sayed is principal at Applied HR Strategies, a Seattle area compensation consultancy and lead author of the StrategicPay Series Base Pay Toolkit, a hands-on, "do-it-yourself" (DIY) guide to developing a strategic market-based compensation program, complete with dozens of pre-built tools and templates, ready for use.

2009 was a real wake up call for just about everyone, and it was one for a lot of HR and rewards professionals too.  The merit pay budget cuts (or eliminations and/or actual pay reductions), mass layoffs, rising fear and plummeting morale rocked the employee-employer relationship to its core.

But wake up calls can be a good thing too.  Right out of college, between undergraduate and graduate school, I was a crisis counselor at a mental health center emergency services unit. I learned a lot about life there, and one of the many lessons I took away was that sometimes you have to hit rock-bottom before, before you can start climbing back up (2009 was rock bottom, let's hope).

If you're an HR or rewards pro responsible for dealing with issues like employee relations, organizational change efforts, and "motivating the troops," than maybe 2009 should have been your wake up call.  After the the past 18 months of budget cutting, layoffs and other forms of retrenchment, the foundation of the employee-employer relationship is looking a bit shaky and in need of reinforcement and/or rebuilding.

Shoring up employee engagement (or re-engagement) or should become a clarion call for us in the "people" business.  So will addressing the issue of employee retention, as numerous studies have shown that a large slice of the labor force is ready to bolt for greener pastures when the opportunity presents itself.  It's quite likely that engagement will become the "new" retention, as happy and engaged employers tend not to bolt for the proverbial greener pastures, because they already feel pretty good about the pasture they're already in.

Many compensation professionals will say that restoring the 2009 take-ways, and addressing competitive pay gaps are key for employee retention. And while I can't disagree with this conceptually, since dollars do matter, I believe the issues needing attention go far deeper than just dollars alone. 

It's about addressing the relationships we have with our people and restoring (or building from the ground up) a sense of belonging, a sense of appreciation and recognition; and a true valuing of the workforce that has come under a silent (but morale-crushing) attack in recent years, even if its been totally unintentional.

I saw a good post last month about workplace trends and issues for 2010 by the Herman Group, and thought it's a good (and brief) read on some of the issues being discussed here.

Over the next couple of months, I'll try and address some of these issues in more detail. 

Until then, I hope your 2010 is off to a great start!

The StrategicPay Blog would like to thank repeat guest blogger Theresa Chambers for her holiday contribution to our space.  Theresa is Chief Motivation Officer for Recognition Works in Seattle, and our local "guru" on all things recognition. Remember, it's not all about the almighty dollar.  People need recognition too!

It's December and commonplace for companies to express their GIANT and sometimes perfunctory thank you to employees for their hard work throughout the year. It often comes in the form of an end-of-year recognition event or party.

The word on the street is that employees are empathetic if their company has to scale back on menu items, do a potluck instead, or even cancel the party altogether. Hopefully, you haven't been saving up your employee appreciation for this one big moment anyway, right? If you have, then Bart Simpson has an assignment for you:

I will notice out loud when someone does something well!

So go ahead — you can take away the presents and the decorations, but when it comes to genuinely appreciating your employees you cannot compromise on the quality of the message or how it's delivered. It needs to be specific, meaningful, and personal.

Here are three low-cost ways to share the gift of gratitude at any time of year:

Simple, Sincere Thanks: Get a box of holiday greeting or thank you cards and a list of employee names. Take the time to really think about how each person on your team contributed in their own unique way. What positive attributes or skills did they share? How did their work have a positive impact on you, the team, the department, or the company? How do they exemplify one or more of the company values?

Galaxy of Stars: Supplies needed: 12 inch or larger foil stars (one for each employee), clear labels, and fishing line. Have employees draw names and ask employees to think about 3 things they appreciate about that employee. They can either write or print the employee's name and the 3 qualities on the star. At the next team meeting, each person gets up and presents their star to the person they selected explaining what they appreciate about that person. Later they can hang the stars with fishing line from the ceiling for the galaxy of stars effect.

What's worth celebrating? Purchase question mark (?) candles from the grocery store. Purchase angel food cake (low fat!), pumpkin pie or some other treat to share. Light the candle and ask employees, "What's worth celebrating? What did we do well this year? What are our most important accomplishments? How did you make a positive difference?" Let them tell you what's important. Add your own accolades, tell them you are proud to be part of the team and optimistic for a successful and productive 2010.

Let us know how it works or if you have other ideas to share. Happy Holidays!

Guest blogger Theresa Chambers is Chief Motivation Officer for Recognition Works in Seattle.  You can reach her via her website, at theresa@recognitionworks.net or at 206-353-8267.  Thanks Theresa, and happy holidays!

As a compensation professional who tries his best to stay up on what's happening on the business, HR and compensation world, I must say that I'm astonished at how much information and advice is available, especially on-line.  There is an amazing array of information for HR and compensation professionals on the web, but but it requires a fair amount of sifting through the mass of information to find the really valuable pieces of information out there.

One blog posting I read this morning while catching up on the latest happenings really got me going. The post, "Six Pay Raise Alternatives" presents some good issues and ideas to think about, but also floats a fair amount of questionable ideas and advice.  Briefly paraphrasing, here are six pay raise alternatives that were suggested:

1. Pass into your employees some of the perks you as a manager receive. The primary examples used were sporting and concert tickets, such as "a $150 ticket to a Billy Joel concert goes a long way, and provides maximum ROI." First of all, while this would be a nice firm of recognition, it's not a credible pay raise alternative.  Second, if the company is following the IRS code (always a good idea!), this example would create a taxable event for the employee, but I digress...
2. Treat your employee to a luxury meal. Certainly a nice gesture, and one that many employees would appreciate, but this is another form of recognition that should be an ongoing part of being a good manager, by recognizing and expressing appreciation for your employees and their performance. 
3. "Give cell phone breaks." Another nice gesture, but something employers should already be assisting with or providing for employees who are expected to be available or reachable most hours of the day.  This is a mild perk/benefit, but certainly not something virtually any employee would consider to an alternative or substitute for a merit-based pay increase, even a small one (which most of them are today).
4. "Award your employee a new title."  Yikes!  As compensation advisor that spends a good chunk of his time trying to untangle the messes and expectations that lie behind the indiscriminate awarding of job titles, this is really unsound advice (and I'm struggling to stay diplomatic).  Anyone who tells you that job titles are "free" or don't change expecations doesn't understand what they are talking about, because inflated or "vanity" titles almost inexorably lead to internal equity concerns, revised and/or unrealistic pay expectations, etc.
5. "Offer flexible schedule or telecommuting."  Yea, something we can agree on, but not really a pay increase alternative, although this would be considered is a valuable benefit to some.  Many employees appreciate the opportunity to save on commuting time and related time and cost elements of going into the office every day.  This benefit should be reserved for highly motivated self-starters that don't need a lot of prodding or supervision (in other words, the employees you should fight to give a raise to, and to ensure their on-going pay competitiveness).
6. Let your employees come up with their own perk, and if it's a viable option, implement it immediately.  This option has appeal on it's face, but be aware of potential perceptions of internal equity issues or favoritism.  I'm not opposed to individualized rewards and recognition, but most employees are are keenly aware of what they observe around them, and it they sniff "unearned" or obviously inequitable rewards, you as a manger will will suffer from other morale and internal equity concerns that can challenge your credibility and effectiveness.

There are actually some really good nuggets embedded in here: recognition is a good thing, but it's not something that should be done only on special occasions.  It's a part of being a good manager and component of being an employer of choice. Other nuggets: people really appreciate being appreciated, and we recommend showing appreciation as a habit, and not something done on an infrequent or special-occasion basis.

In short, there is a lot of information and advice out there, but be discriminating and choose carefully, because when it comes to base pay and other forms of rewards and recognition, there can be negative or unintended consequences of poorly designed efforts and programs.

For instance, if you're looking to implement a new recognition or incentive program, or a strategy to address pay issues while keeping down fixed cost increases, talk with a specialist or at least someone who truly understands the issues, alternatives and consequences of of various strategies and approaches.  Too much is at stake to to take the chance of implementing poorly-designed programs or un-vetted ideas without considering the consequences.

OK, I'm getting off the soapbox!

The StrategicPay Series blog is happy to welcome back guest Blogger Theresa Chambers of Recognition Works.  See below for additional contact information.  Thanks Theresa!

While leg warmers and feathered hair may be making a comeback, let's make sure your recognition programs aren't stuck in the 80s. Whether you are creating a program from the ground up or revamping an existing one, here are some tips to bring your recognition practices into the 21st century.

Employee of the Month programs are so 80s. We've heard all the jokes, "Whose turn is it this month?" or "Let's give it to Joe, he hasn't gotten it in a while." The impetus for recognizing great work doesn't happen because you turned the calendar from August to September. It needs to be deserving, for sure, but it also needs to be based on criteria that reinforces employee behaviors aligned with company values.

No surprises. Surprise awards are more about the shock value for those watching than truly honoring the person you're trying to recognize. If you are going to receive an award, wouldn't you like to know ahead of time? Some people love the fanfare and applause, while others prefer their recognition in private. When it comes to recognition, one size does not fit all, so it's always best to ask employees how they like to be recognized.

Don't show them the money. Harvard Business School's thought leader, Rosabeth Moss Kanter, captured it well, "Compensation is a right. Recognition is a gift." While 85% of employees surveyed say they want cash awards, only 9% actually spend it on a special personal treat for themselves. Cash disappears. Awards should serve as a tangible reminder of the achievement. It can be as simple as a framed certificate with signed accolades from coworkers or a retrofitted Oscar trophy with a superhero cape renamed FRED (friendly, resourceful, enthusiastic and dedicated).

Think strategy, not program. Recognition needs to be more than once a year celebration where only a small percentage of employees are honored and everyone else watches. A strategy is ongoing and multidimensional. The most important element is the day-to-day thank-you and acknowledgment. It's about creating a culture of appreciation where it's up to everyone to "notice out loud" when someone does something right for the company.

Involve employees in designing the recognition strategy. People own what they create and want to see it succeed. Committees should represent a diagonal cross section of your organization and its unique culture. Identify Recognition Ambassadors throughout the company who serve as the go-to person for ideas and resources.

Storytelling is one of the most powerful forms of recognition managers can use. People pay attention to who gets recognized and why. An effective presentation should tell the story about what the employee did, the positive impact it had, and how it was an example of one or more of the company values. Use multiple communication vehicles to share employee achievements, including the intranet, recognition bulletin boards and the company's Facebook page to post pictures and give coworkers an opportunity to add their congratulations. This works great for remote employees.

Maximize your managers. People join a company for the pay or benefits, but it's an employee's relationship with their manager that determines whether or not they stay and how engaged they are. Research suggests that employees need to receive recognition and praise for doing great work every seven days to stay actively engaged. Thankfully, giving effective recognition is a leadership skill that can be learned. In fact, training managers on recognition skills increases the occurrence of recognition by up to 50%.

As your business goals evolve, so should your employee recognition strategy. Your core values may remain the same, but it's always a good idea to take a fresh look at your recognition practices. Here's to keeping the ZING in recogniZING!

Theresa Chambers is the Chief Motivation Officer of Recognition Works and founder of the Puget Sound Recognition Roundtable. Visit www.recognitionworks.net for more info.

The Strategic Pay Blog is pleased to welcome Becky Regan as a guest blogger to the StrategicPay Blog.  Becky is the founder and President of Regan HR, Inc. and a fellow blogger on the Compensation Cafe'. See below for more contact information.  Thanks Becky!

Would you want to work for yourself?  Let's be honest here....to be effective as a manager, you know that your employees must trust and respect you. They need to believe that you'll handle their work issues fairly and consistently, yet maintain their confidential information when they seek your help. Repeatedly, studies have shown that employee retention is directly correlated to the quality of the relationship between a manager and his/her employee. Employees frequently look for another job when this relationship doesn't exist.

Years ago, I had a boss who believed that he should treat all three of his direct reports exactly the same in terms of salary. He believed that he was being "fair" by treating all of us the same. Yet we all had different areas of responsibility, work styles, and performance levels.

Treating us all the same simply didn't work, because we were all different.  He treated us like a parent treats his kids; he didn't want to show any favoritism to anyone in particular.  Good parenting practice; lousy management style.....

When I began working for him, I made significantly less money than my peers. I almost left that job out of sheer frustration over the lack of recognition for my efforts and the discrepancy in salaries. Instead, I decided to stay and see what would happen because I trusted my boss to "go the distance" for me. Though it took a longer than expected, he did come through with a title and 33% increase in base pay for me.

I'll never forget how he told me about the big raise and VP title. He took me out to an Italian  restaurant for a fancy lunch and truly made the occasion a celebration to remember!

What kind of a manager are you? Do your employees believe in your ability as a manager? Can they depend on you for your support and fair treatment? Do you recognize their individual efforts and contributions?

Take a minute to consider what you need from your manager in order to succeed in your job? Make a list of your "top 10" requirements. Chances are, your list is very similar to the one your employees would create for you! You can use it as a self-evaluation of your managerial effectiveness to determine how you can improve as a manager before the economy begins to recover in earnest.

How can you become a better manager? By caring enough to...

•     Build a professional yet warm relationship with each of your direct reports
•     Frequently ask them how their job is going and how you can help; be available when they need you
•     Commit to holding weekly staff meetings with everyone reporting on what they're working on in a round table setting; don't cancel or postpone scheduled meetings
•     Honor your commitments to employees; follow through!
•     Stand up for them as necessary to provide support, get salary increases, supplemental training, etc.
•     Do little things, like saying "hello" at the beginning of the day ; walk around & talk with your employees
•     Keep your door open; don't sit in your office with your door closed unless in meetings
•     Find out what their individual interests are and use them creatively when recognizing each employee for exceptional performance
•     Hold your employees accountable for work you expect them to do and timelines to be met
•     Manage performance problems as they arise; manage poor performers out of the workplace
•     Hire smart
•     Ask them how they want to be treated or what outcome they expect from a conflict at work
•     COMMUNICATE, LISTEN and EMPOWER!

Now is the time to become a better manager to enhance employee engagement.  Don't wait to use sound management practices for employees when the economy finally emerges from this "repression" and your turnover increases.  Train your managers now how to effectively manage and build that critical relationship between supervisor and employee.  It's your best insurance policy to implement now to protect your company from losing staff down the road.

Don't treat all of your employees the SAME, RECOGNIZE and build upon their differences to treat each individual FAIRLY.

Becky Regan is the founder and President of Regan HR, Inc., a human resources consulting firm specializing in compensation consulting for California employers and purveyor of online HR products. A former Corporate Human Resources Director (10,000+ employees) with more than 25 years of HR work experience in many industries, her team works with private, public and non-profit clients.  Becky is passionate about designing HR programs and compensation plans that build organizations.

Flickr photo courtesy of Reclassic2

Appreciate the Employees You Have: The value of recognition escalates in a tough economy

The StrategicPay Blog is very pleased to welcome Theresa Chambers as a guest blogger. Theresa is the Chief Motivation Officer of Recognition Works, and an expert on recognition program design,development and implementation.  See below for her contact information.  Thanks for contributing Theresa!

In a challenging economic environment, the value and impact of employee recognition multiplies. While it may be financially prudent to scale back on expensive awards or events – which generally do little to increase employee engagement or productivity – let's not lose sight of what recognition is all about.

Whether your company is large or small, the truth is that the people working there want to know that what they do makes a positive difference. And they need to hear it now more than ever. A survey from the Center for Work Life Policy reported that trust and loyalty levels of workers are at an all time low. Only slightly more than half of those surveyed felt "loyal" to their company and nearly two-thirds said they felt "demotivated" at work.

Organizations need to appreciate the employees they have and acknowledge when they are being asked to step up and do more with less. Jim Harter from the Gallup Organization put it well, "Employee recognition is actually more important during difficult times than periods of prosperity. Recognition helps people to be resilient. Right now, businesses are trying to survive. And to survive you've got to have psychological resilience. We need employees who are positive despite the negative situations around them."

Companies – or more specifically, managers -- cannot afford to take employees for granted or assume people should just be thankful to have a job. In fact, company decisions resulting in layoffs could very well trigger their own solid performers to leave.  According to the Harvard Business Review, researchers found a strong relationship between layoffs and subsequent voluntary turnover. For example, layoffs targeting just 1% of the workforce preceded, on average, a 31% increase in overall turnover.

It's no accident that the companies on Fortune Magazine's 100 Best Places to Work list consistently outperform S&P 500 companies by 30-40%. Employee recognition is a critical component of their business models and they practice it.

The solution is available to everyone. A solid recognition strategy is built on a foundation of trust and respect. It involves integrating recognition into your company's culture and training managers on meaningful, low-cost ways to show appreciation for staff.  It starts at the most fundamental level: paying attention to people, making eye contact, smiling, saying "Good morning." This simple act communicates the message that "I see you. I care, and I'm glad you're here."

Appreciation starts with awareness: awareness of the things employees do well. Recognition is simply "noticing out loud."  It can take the form of a verbal comment for providing excellent service or a handwritten note to thank them for staying late to meet an important deadline.

Even though U.S. companies spend upwards of $300 billion a year on awards and incentives, 65% of employees say they don't receive recognition or praise at work. As organizations downsize their annual awards banquets, it doesn't mean less recognition for employees. It actually provides a perfect opportunity to get real about what recognition means to employees. It becomes less about the "stuff" and more about how the message is delivered. Do your employees know they make a positive difference? Do they understand how their job is connected to the bigger picture? It's that frequent, genuine "thank you" that moves the needle on employee engagement and satisfaction scores, and has a real impact on the bottom line.

We need more "employees of the moment" than "employees of the year." Take the time to pay attention, acknowledge, and appreciate what is right in your organization and the people responsible for making it that way. Now, more than ever, it may be the best business decision you ever make.


Theresa Chambers, Chief Motivation Officer at Recognition Works, changes the way organizations think about employee recognition. She can be reached at theresa@recognitionworks.net or 206.353.8267.