1. June 23, 2011 SHRM Survey Findings: Employee Recognition Programs In collaboration with and commissioned by Globoforce

2. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management with more than 250,000 members worldwide. www.shrm.org SHRM regularly conducts surveys and polls with its members on HR and business topics. 2 About the Society for Human Resource Management

3. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011  Survey fielded May 17-27, 2011  The survey link was emailed to 6000 randomly selected HR professionals from SHRM’s membership database, 745 responded – a response rate of 13%.  The majority of respondents were employed at organizations with a staff size of 500 or more employees (90%) in the for-profit sector (76%). 3 About this Research

4. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Talent Management Current workforce challenges Future HR challenges Employee engagement 4

5. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 The Top Challenges That Organizations Are Currently Facing Please rate the importance of the following workforce challenges: Very Important ImportantUnimportant Very Unimportant Multiple cultures in the workforce 35%49%15%1% Different generations among employees 34%51%13%1% Global diversity of today’s companies 24%38%29%9% Harnessing the power of social networking technologies 21%51%24%4% 5 n = 742

6. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 HR challenges organizations anticipate facing in the next three to five years: 6 Note: n = 742. Total may not equal 100% due to rounding

7. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 7 Of the following options, which do HR professionals think is the most accurate appraisal of employee performance? 61% of HR respondents indicated that annual performance reviews were an accurate appraisal of employees’ work, however when compared with other types of appraisals, annual performance reviews came in 3 rd. Multi-source – positive recognition – on a regular basis – was rated as the MOST accurate appraisal of employee performance.

8. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Organizations That Track Employee Engagement Levels 8 n = 742

9. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Methods organizations use to track employee engagement levels: 9 Note: n = 637. Includes only organizations that indicated they track employee engagement levels. Total does not equal 100% due to multiple response options.

10. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Employee Recognition Programs How important is recognition to employees? What types of employee behaviors are recognized? Measuring effectiveness of programs 10

11. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 How important is recognition to employees? 11 Source: 2011 SHRM Employee Job Satisfaction & Engagement Research Report Percentage of employees that responded that recognition by management is “very important” to their overall job satisfaction: 2002 (n = 604) 2004 (n = 604) 2005 (n = 601) 2006 (n = 605) 2007 (n = 604) 2008 (n = 601) 2009 (n = 601) 2010 (n = 600) 2011 (n = 598) 49%47%45%47%49%44%52%48%55%

12. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Does your organization have an employee recognition program? 12 n = 698

13. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 13 While 80% of organizations have employee recognition programs, the data suggest that these programs could be more effective. Note: Analysis excludes “not sure” response. Do you think at your organization: YesNo employees are rewarded according to their job performance? 56%44% managers or supervisors effectively acknowledge and appreciate employees? 46%54% employees are satisfied with the level of recognition they receive for doing a good job at work? 31%69%

14. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Top Reasons That Organizations Recognize Employees 14 Note: n = 549. Includes only organizations that have an employee recognition program in place. Total does not equal 100% due to multiple response options.

15. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 How do organizations track employee recognition programs? 15 Note: n = 423. Analysis excludes “not applicable” responses. Total does not equal 100% due to multiple response options.

16. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Is your CEO/president involved in your employee recognition program? 16 Note: n = 552. Total does not equal 100% due to rounding.

17. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Does the budget for employee recognition programs come out of the HR budget, the individual department/business unit budget or from both budgets? 17 Note: n = 547. Total does not equal 100% due to rounding.

18. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Does your organization track the ROI of your employee recognition program? 18 Note: n = 419. Analysis excludes “not sure” responses.

19. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Percentage of organizations that track the ROI of their employee recognition program 1-99 employees = 10% 100-499 employees = 6% 500-2,499 employees = 7% 2,500-24,999 employees = 19% 25,000 and above = 21% Larger organizations > smaller organizations 19 Comparisons by organization staff size: Larger organizations (2,500 employees and more) are more likely to track the ROI of their employee recognition programs compared with smaller organizations (2,499 employees and fewer). Publicly owned for-profit = 22% Privately owned for-profit = 10% Nonprofit = 7% Publicly owned for-profit organization > privately owned for-profit organization, nonprofit organization Comparisons by organization sector: Publicly owned for-profit organizations are more likely to track the ROI of their employee recognition programs compared with privately owned for-profit and nonprofit organizations.

20. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Of those organizations that track the ROI of their employee recognition programs, 77% agree that it is challenging to measure the effectiveness of these programs. 20 Note: n = 53. Includes only the respondents who indicated they track the ROI of their employee recognition programs. Survey included a “strongly disagree” response option, but this option was not selected by any respondents.

21. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 The challenges that organizations experience in tracking the ROI of employee recognition programs: Percentage Metrics of success keep changing, making it impossible to consistently report on ROI 32% The recognition program cannot be linked with our talent management or performance management systems, giving us no insight into how recognition affects key metrics such as performance improvement or retention 32% The recognition program is not designed to deliver improvement in metrics that our executive leadership (CEO/CFO/COO/CHRO, etc.) finds valuable 22% The recognition program only rewards the ultimate results, but does not take into consideration how those results are achieved (e.g., in line with company values) 20% Only segments of employees are eligible to participate in employee recognition programs (e.g., top performers, select job levels) 20% Don’t know what metrics we should be measuring to prove ROI15% 21 Note: n = 41. Includes only the respondents who indicated they track the ROI of their employee recognition programs. Total does not equal 100% due to multiple response options.

22. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Key Take-Aways 22  The majority of organizations have employee recognition programs in place, however it is important for these programs to be effective and linked meaningfully to an organization’s strategy. Be creative, expand rewards beyond just years of service. Investigate what types of rewards will motivate your employees.  Employee recognition programs are crucial in terms of employee engagement, recruitment and retention which HR professionals indicated as major challenges in the next 3 to 5 years. Businesses must invest in their top performers and reward them in ways that allow them to see the impact of their work on the organization’s goals and objectives. Employees want to see meaning in their work.  HR professionals indicated that frequent (weekly, monthly) multi-source feedback is the most accurate way to gauge employee performance. Encourage recognition by peers as well as different layers of management.  Understand your workforce. Different generations and cultures may be motivated by different things. Create recognition offerings that are adaptable – it is not a once size fits all method.

23. SHRM/Globoforce Employee Recognition Tracker Survey: Employee Recognition Programs ©SHRM 2011 Questions? 23