Research
Driving Engagement: Avis Budget Group Engagement Case Study
How Avis Budget Group uses recognition to foster employee engagement, improve productivity and save millions in the costs of turnover.
Using Recognition to Foster Engagement
Fighting to keep employees engaged and loyal in a service business can be a difficult task. Add to that a merger and divestiture in an industry suffering from difficult economic times and you may have a recipe for disaster. But not for Avis Budget Group. Instead, this leading vehicle rental giant has led its more than 32,000 employees through challenging times, all the while improving bottom line results. In addition to reducing company-wide voluntary turnover by 3.8 percent from 2004 to 2005—an accomplishment that saved the company millions by improving productivity and reducing turnover—the organization continues to raise employee engagement scores and other key measures.
When you consider each point of turnover costs Avis Budget Group an average of $3 million, the benefits of recognition and engagement to the bottom line become abundantly clear.
Avis Budget Group attributes its success to continued efforts to positively affect employee engagement. Using recognition as a tool, the Group focuses on improving employee engagement scores by giving employees opportunities to feel more connected to the company and understand that they can make a difference.
Recognition: A Critical Component of Culture
As an organization, Avis Budget Group takes great stock in employee surveys. So years ago when employee surveys repeatedly told company leadership there was a lack of recognition of what people do well, leaders took notice. “There were a lot of things we did well as a company,” says Executive Vice President of Human Resources, Mark Servodidio. “But one of the recurring themes was that we needed to do a better job at recognizing people.”
So the company set out to do just that.
“We designed a recognition program based on the voice of the employee, connected it to the values of the company and, in 2002, we put the process online so it’s very easy to nominate, approve and distribute awards,” says Servodidio.
Since introducing the recognition program, Avis Budget has seen tremendous growth in program usage and success. Constant improvements include the move to a paperless program that increased program participation by more than 650 percent in just one year. These enhancements keep employees and managers coming back to the program as an important way to reinforce company values and objectives and recognize accomplishments.
In fact, recognition served as a tool to help orient and ground employees of Budget Rent A Car following its acquisition by the company in 2002.
Leaders explain that Budget went through a difficult history as a company. Following the acquisition, the company discovered that many Budget employees did not know the company’s core values or what was expected of them. “We held listening meetings to try to understand what mattered most to Budget employees,” says Servodidio. “We then focused our recognition efforts on those core values to really distill what we thought was important.”
The result?
“We saw a marked change among Budget employees in terms of understanding what the company stands for and the awareness and importance of the organization’s values,” says Servodidio. “Now, there is definitely a sense that our Budget employees understand our vision and our expectations of them. And recognition has helped us reinforce that.”
Fostering a greater awareness of company goals and initiatives is not the only benefit recognition has brought to Avis Budget Group. Indeed, the organization has seen employee engagement scores rise as a company and in those locations that most utilize recognition.
“There is definitely a correlation between a management team that engages its employees and takes full advantage of recognizing people versus a management team that doesn’t,” says Servodidio. “The success and essential nature of recognition as a tool for Avis Budget is tied to driving engagement, which drives profitability and quality. Recognition is a piece of what helps us drive success.”
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