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Onboarding: Early Engagement Through Recognition

Why Today’s Best Companies are Using Recognition to Foster New Hire Engagement and Lower Turnover

In today’s competitive talent environment, engaging employees in the cause of your company and inspiring them to stay is key to enhancing business success. Once taken for granted, the process of hiring, welcoming, orienting and engaging a new employee into company culture today is collectively referred to as “onboarding.”

Buzz word or not, onboarding has become the accepted term to describe a process that demands increasing attention from organizations all over the world. Why? Because although it’s true employees have been regularly welcomed and onboarded into companies throughout history, the critical nature of effectively onboarding new employees has taken on new significance in the workplace as average tenure shortens and new generations with new expectations enter the workforce. Couple that with recent research from the U.S. Department of Labor indicating that 25 percent of the American workforce has been in their current position for less than a year, and it becomes apparent why today’s workplaces are taking notice of onboarding as a critical business issue.

In fact, the effective practice on successful onboarding techniques, or lack of it, is making headlines across the business press. As summed up by Talent Management and Fast Company: “Few companies give much thought to creating the right onboarding experience. Unfortunately, this oversight might be the biggest mistake employers make. New employees are 69% more likely to stay after three years if they’ve experienced a well-structured onboarding program.”

This paper takes a look at how some of today’s companies are defining and dealing with onboarding and the issues and challenges it represents.
While many relegate the practice of onboarding solely to showing new employees to their desk, handing them the employee manual, and assuring they make it through all the right training sessions, there are some organizations that are reaping the benefits of expanding their view of onboarding.

“A lot of human resource professionals know the term onboarding. But I think where a lot of them fail is they think of it only as a tactical solution to their issues of filling out forms and getting computers set up for new employees,” Carmen Marston, VP of Human Resources at Zimmerman Advertising recently told Workforce Magazine. “They’re not looking at the bigger opportunity… to help new employees understand who you are as a company so they are prepared on the day they start to integrate into the company.”
Those who view onboarding as an opportunity to engage employees in the company mission from the start often find that when onboarding strategies are complete, deployed, and executed correctly they can:

  • Socialize employees into the company culture, processes, and values
  • Reduce new hire turnover and increase retention
  • Shorten time-to-productivity
  • Accelerate performance
  • And engender trust in the manager and team

So what are leading companies doing to shorten lead-time to productivity for new hires and encourage them to consider the company for a long-term career? Many are discovering the connection between the following statistics:

  1. According to research conducted by the Aberdeen Group, 86% of new hires make their decision to leave or stay within the first 6 months.
  2. According to the same research, 89% of new hires say they do not have the optimum level of knowledge and tools necessary to do their job.
  3. According to research conducted by SHRM, 79% of those who quit their jobs cite lack of appreciation as the main reason.

As a result, organizations committed to battling early turnover and increasing engagement are finding ways to layer manager recognition of new hires early in their careers on top of current administration-oriented processes to elevate the effectiveness of their efforts and create a synergy that helps them realize important results for the organization and, ultimately, its customers.

CASE STUDY 1

Washington D.C. Hospital

Anyone who works in healthcare will tell you: Finding and keeping nurses is hard to do. Many times nurses are recruited away to other hospitals before making it to their first day on the job. Given the competitive nature of recruiting nurses in Washington D.C., a human resource executive at an area hospital had a simple, but powerful idea. The hospital decided to begin onboarding even before the new nurses started their first day.

Instead of waiting and hoping the new hire would make it through the recruiting frenzy that continued through the moment of accepting a new job to their first day, each nurse manager now proactively introduces the new hire to their team of nurses. The team of nurses then follows up by personally signing and sending a welcome card expressing their excitement to work with the new hire.

Although simple, creating a logical and emotional connection between the new hire, the organization, and their new team has proven particularly effective. New nurses now feel more connected, and pre- and post-start attrition has decreased dramatically.

“Great employers begin the process before new hires arrive on-site,” reports Workforce Management in a recent article, Onboarding Secures Talent for the Long Run. “During the final interview or at time scheduled before the official ‘start date,’ introduce team members… complete the paperwork… Employees are usually eager to dive in on the first day, so bypassing administrative tasks and focusing on the work to be done will keep enthusiasm high.”

Human Resources Solutions recently called such onboarding practices “Delivering on the Promise,” saying, ““Ultimately, when people are made to feel welcome, they are more productive, less stressed, and more team focused. This all translates into lower turnover rates.”

CASE STUDY 2

PepsiAmericas

So once the new hire makes it through the door, how do the best companies connect?

Beverage giant PepsiAmericas starts on Day 1 making sure new employees are connected with the company, its vision and, most importantly, their manager.

With 30,000 employees worldwide, PepsiAmericas wanted a complete, integrated recognition process. They had a partial program in place, but managers didn’t understand how it worked and what their role was. That gap in recognition and manager training translated into 69 percent of those who left the company doing so within the first three years, and 46 percent of those who left did so in the first year.

With the help of O.C. Tanner, PepsiAmericas created an onboarding process that includes manager training and focuses on using recognition earlier and often. Onboarding recognition is now automated for managers at PepsiAmericas.

Awards show up on the manager’s desk for each new hire at important milestones throughout the first year and specific manager training aimed at helping managers connect with employees at these moments helps trigger recognition of the new hire.

To start off the onboarding experience, on Day 1, every new hire receives a key chain, designed with the Pepsi logo, symbolizing the key part the employee will play in the company’s success. The award is accompanied by a welcome message from the CEO and it is presented to the new hire publicly in front of the team by the manager. This gives the manager an opportunity to reiterate company goals, values, and mission.

Such best practices are widely recognized as key to winning hearts and minds of today’s newest workers.

In 2007, the Leadership Workplace Motivation IQ Study discovered the biggest statistical driver of workplace satisfaction for workers between the ages of 21-30 is whether their boss recognizes and praises their accomplishments.

By meeting the need for recognition and praise from Day 1 and regularly thereafter, organizations like PepsiAmericas reinforce the new hire’s decision to join the organization, strengthen manager-employee relationships, and reinforce an emotional connection to the company that is key to helping them realize why it is in their best interest to give their best.

CASE STUDY 3

Unisource Worldwide, Inc.

While giving a complete onboarding strategy a strong start, maintaining the momentum and engagement is key to assuring long-term commitment.

According to 2008 research by The Aberdeen Group, only 4 percent of employees decide to stay or leave on the first day, but 86 percent of new hires make the decision to stay or leave within the first six months. That creates a critical window wherein the best companies continually reinforce the hire’s success and engage them in the cause of the organization.

However, this point is largely unrealized in many organizations. According to Aberdeen, “61 percent of all organizations either don’t offer a formal onboarding program or end their onboarding program within just one month. Best-in-class companies, on the other hand, are 30% more likely than all other organizations to extend onboarding beyond one month for senior-level executives and regular, full-time employees.”

Today’s best organizations determine key milestones well into the employee’s first year on the job where recognition can heighten the experience and create positive manager-employee relationships. They then train managers either internally, or with the help of a recognition consultant, to make the most of those moments.

For North America’s leading independent distributor of commercial printing and business papers, Unisource Worldwide, Inc., 90 days is a critical milestone and recognizing employee accomplishments to that point provides a rich opportunity to give and get feedback.

Unisource company managers are trained in the best methods for welcoming new recruits including awards for appreciating great work early on. Each award comes complete with specific manager talking points designed to strengthen manager-employee relationships within the first 90 days on the job.

Within the first six months of implementing its new onboarding approach, Unisource experienced a significant drop in turnover. The company expects early recognition strategies to improve business results by encouraging managers to engage new employees quickly in working toward clearly defined goals.

Employee feedback to the new onboarding process has been extremely positive.

“I feel like, in a very short time, Unisource has created a certain loyalty with me that I didn’t have for my former company. I’m sure my experience being recognized just 90 days into my career here played a role in that,” says new team member Anita Edwards, who recently left her employer of 10 years feeling unappreciated and ignored.

What should employers be asking employees at 90 days? Recognition expert and best-selling author Adrian Gostick recommends the following questions:

  • Is the job what you expected, and are you facing any roadblocks to hitting your goals?
  • Are you getting all the information you need to do your job and do you feel part of your team?
  • In your time here, what’s the best thing that has happened to you?
  • Have you noticed anything we can improve on?
  • Do you feel recognized for your contributions?

RESULTS

So with such promising results and obvious importance why do just 15 percent of companies today have a formalized onboarding process? Most likely because it is largely overlooked as an avenue of opportunity.

However, those companies that understand the long-term significance of a successfully onboarded and fully engaged employee are also realizing the impact on the bottom line.
One large financial institution layered recognition into its onboarding practices at regular milestones throughout the employee’s first six months in its call center. Through internal research they have determined that if they can engage and keep employees through their first 90 days it represents a savings of $17,500 per employee. For them, onboarding with recognition is not just a nice thing to do; it is a best business practice that yields tangible results.

PricewaterhouseCoopers experienced similar results. The company’s revamped onboarding strategy known as “Turning Point” reports, “91 percent of the 183 attendees enrolled in the program said they intended to stay at PwC for at least another year, compared to 78 percent in the control group,” reports S. Boehle in True Vision, from Training magazine.

Successes like PricewaterhouseCoopers’ are not isolated. Ohio Savings Bank’s MCG Department was determined to battle a turnover rate of 31 percent within 90 days of hire. Within five months of launching a [reformatted new hire] program, turnover dropped to 4 percent within 90 days. Now, company-wide, turnover is at 16.8%—almost half of the industry average of 31.7%.

The Aberdeen Group’s 2008 comprehensive report on the new push for onboarding strategy concludes, “New employee ‘retention’ is the overwhelming pressure driving onboarding in 2008, as compared to ‘productivity’ which was the top pressure that drove onboarding in 2006.” And when organizations include manager training and recognition as an important part of their onboarding process, a synergy is created that results in greater commitment, lower turnover, reduced time-to-productivity and engagement.

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Powering Recognition at Xcel Energy

How one company's strategic recognition lead to $17 million in bottom-line savings.

Xcel Energy has enlisted the help of all of its 10,000 employees in improving—everything, every day. The result? Thousands of improvements to systems, processes and working conditions that equaled more than $17 million in savings opportunities. And, says the program’s sponsor, “That means our investment in recognition is earning our company at least a 20-times return.”

The quest of Xcel Energy employees to turn problems into improvements is spurred by the company’s Xpress Ideas suggestion recognition program. A leading energy provider, Xcel Energy has never underestimated the power of targeted, strategic recognition. The company uses several different types of recognition programs to encourage employee engagement, involvement and ownership in the company.

USING RECOGNITION TO ELEVATE MANAGERS
As Xcel Energy leaders evaluated areas were they could improve employee performance and bottom-line results, they recognized that an important gap existed when people were promoted to managerial positions. 

“People get promoted because of what they do, not necessarily because they are good managers,” says Bill Newby, Xcel Energy’s managing director of enterprise process management. “That means we need to give them the tools, training and encouragement they need to become effective managers, and our recognition programs are an essential part of the tool kit.”

In an effort to elevate the caliber of managers and, consequently, the performance of all employees, Xcel Energy invested in making its employee suggestion recognition program more strategic. The program was designed to be more than just a way of rewarding effort; instead Xcel Energy created recognition systems that become a way for managers to begin conversations about improvement with employees—tools that inspire thought, action and results.

Like many other companies, Xcel Energy had a hunch its employees had great ideas for making improvements―they just needed to be encouraged to share them in a forum where they knew they would be heard and their ideas acted upon.
“We’re amazed at the great ideas that are out there,” says John Torres, manager of corporate rewards and recognition at Xcel Energy. “With more than 10,000 employees working in 10 states, we needed a vehicle to gather the ideas and recognize them. Xpress Ideas has proven to be an effective way to generate ideas and recognize them appropriately.”

But gathering those ideas wasn’t a simple matter. Xcel Energy began with a manual program that required managers to collect, evaluate and award various levels of recognition appropriate to the idea.

“Managers actually had to write out a paper certificate to employees, and then write out one for each suggestion program investigator and keep a paper record for themselves,” says Torres. “That ended up being a paperwork nightmare for managers.”

“All the research indicates that the recognition needs to be as immediate as possible,” says Torres. “We had people who deserved recognition for ideas that sometimes had the potential to generate thousands, even hundreds of thousands of dollars to the company, but the recognition would have to wait until a manager had time to fill out a certificate and, in some cases, mail that certificate to the employee. It just wasn’t timely.”

Of even greater concern to management was the need to ensure that the program provided a mechanism for linking recognition to Xcel Energy’s corporate values and mission statement.

“We are far past the time when recognition and rewards were merely corporate niceties,” says Chester Elton, author of A Carrot a Day, a best-selling business book. “Recognition has to be strategic. It has to deliver bottom-line results. Today, recognition must be consistent, meaningful and focused to be effective.”

FOSTERING BUY-IN
The first step to improving the effectiveness of recognition at Xcel Energy was to get managers behind the program, and that meant streamlining processes.

“We knew we needed to simplify things and make it easier for managers to participate,” says Torres. “Now we have an online application that allows managers to put all the information into a report that we capture electronically. This makes the recognition immediately visible to us, and immediate notification goes out to recipients. I can’t tell you how many compliments we’ve received—our managers love it now.”

In addition to providing the systems, technology and processes to make recognition simple and more easily measured, Xcel Energy offers managers recognition consulting services through its Corporate Rewards and Recognition team.

“Keeping recognition targeted and participation high is hard work,” says Newby. “By consulting with the business units we can discover what specific problems they hope to solve and target the recognition promotions to meet those goals. For example, if it’s a cash crunch, they want to recognize those who find ways to save money. If they are having safety issues, they want to promote recognition for those who improve safety conditions. The managers welcome our help because they see results.”

“It’s no wonder managers get on board,” adds Torres. “They’re not just looking at the program as, ‘I have to write another thank-you note.’ They’re looking at it as, ‘This helps me encourage employees to improve business results, and that’s something I get to report to my boss.’ It motivates everyone in the process.”

Newby and his team also improved the company’s recognition by implementing an On-the-Spot program, revamping their service award program to a strategic “Years of Contribution” program and introduced a new Above & Beyond program designed around the company’s core values.

“The Web tool we’ve designed for the Above & Beyond recognition program ensures that people must recognize the behavior for what it is,” says Bill Newby. “It won’t let you just say, ‘Thank you for doing a great job.’ The nomination for the behavior has to be related to a corporate value.

“That stops people in their tracks.  They’re forced to ask themselves, ‘What is it – is it innovation? Is it credibility? Is it developing new ways to do business?’ As a result, the nomination itself becomes another way for us to communicate and promote corporate values,” says Newby.

Xcel Energy employee and recognition recipient Harryette Johnson agrees that targeted, strategic recognition makes a powerful tool.

“Recognition is important at Xcel Energy, and that makes a big difference. Once you realize that your contribution is being noticed and someone is going to recognize you for it, you can move the earth for the company,” says Johnson. “It energizes you to do more; it raises the bar, and you want to go higher next time.”

CHANGING A CULTURE
Recognition at Xcel Energy has as much to do with creating a culture as it does with making sure employees feel recognized.

Says Torres, “I have managers who tell me their employees used to come to work asking, ‘How do I do a good job today?’ Now they ask, ‘How do I do it better?’”

“I see my people take away a sense of ownership in the company,” says Ruben Roman, a supervisor at Xcel Energy’s Comanche Generating Station in Pueblo, Colo. “And when you own something you take care of it differently; you treat it differently because you take pride in it. The attitude becomes, ‘This company is part mine, and I want to make sure it runs the best or the safest it can.’ Bottom line? When the rubber meets the road, recognition programs can do wonderful things.”

Indeed, across Xcel Energy, managers are turning every opportunity for recognition into a reflection on the employees’ contributions.

“Recognition is not typically an expected or standard part of the employee life cycle,” says Newby, “but we’re trying to change that at Xcel Energy. We’re even changing expectations in our service recognition program. We no longer call it ‘Years of Service,’ but ‘Years of Contribution.’ By integrating recognition with culture and by demonstrating the effect recognition can have on business results, we’re building a new recognition mentality among Xcel Energy managers and employees.”


SUMMARY:
RECOGNITION GENERATES RESULTS AT XCEL ENERGY

The success of Xcel Energy’s Xpress Ideas program continues to grow. The company received 7,662 suggestions last year and implemented about two thirds of them. The program has identified savings opportunities in the tens of millions of dollars over the last five years.

The Ragan Report, a weekly newsletter for communication professionals, recently published an article about Xpress Ideas titled, “An employee suggestion system that actually works.” Key reasons cited include:
• Small, meaningful rewards that can add up keep employees focused on identifying real solutions to real problems.
• Xpress Ideas is deeply integrated into the organization, with promotions at the business unit level.
• Xpress Ideas is “elegant and simple”; it doesn’t make work for employees or managers.
• The program enjoys the support of top management.

“The payout of Xpress Ideas is a small percentage of what the company gets in return as far as employees being involved, engaged in their jobs, improving safety, processes, whatever it may be,” says Roman. “Suddenly, things people have been tolerating for years because that’s the way it’s always been are now being taken care of and made better.

“We’ve seen a correlation in the reduction of safety incidents. For years I’ve been saying, ‘Look at our safety record and our number of reportable accidents: they are consistently down, especially in the operations department, where our people use the Xpress Ideas program most.’ As our participation goes up our safety incidents go down. The correlation is there.”

Roman’s experience agrees with the findings of a recent study by The Public Agenda Forum, a non-profit public policy research organization. It reports that fewer than one in four American workers is working at full potential; half of all workers do no more than directly asked; and 75% of employees say they could be more effective in their jobs.

“Recognition is a part of everything we do at Xcel Energy,” says Newby. “It’s a way to reinforce our corporate values, our business priorities and the behaviors that benefit the company.”

“Xcel Energy has proved recognition done right is much more than an employee benefit; it drives business results,” says Adrian Gostick, author of the Carrot series of management books. “Strategic programs consider both the manager’s and employee’s needs, encourage loyalty, engagement, voluntary effort and enthusiasm. Before you know it, recognition has changed employee culture and business results.”

Bill Newby, Managing Director - Enterprise Process Management
Xcel Energy
550 15th Street, Suite 1000
Denver, CO 80202
Phone: 303-571-6567
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Training for Results

How the World’s Largest Express Delivery Provider Uses Carrots to Accelerate Improved Business Results

Using Carrots to Accelerate Results
Along with greater brand recognition and growing market share, DHL, the world’s largest express delivery provider, has cultivated near best of class status in many key areas of employee satisfaction. Recent surveys indicate DHL has been successful at not only engaging its 540,000 employees in achieving the goals of the organization, but also in training its managers to become more relevant to their employees and drive business results from the ground up.

The company attributes its increasing success to highly engaged employees who understand the mission and vision of DHL and the “Carrots” that helped them get there.

When DHL and Airborne Express merged in 2003, employees from both organizations needed inspiration to move in one direction. Initial employee surveys indicated a need for more active engagement and more communication from management. It was time for DHL leadership to step up and establish a lasting culture with a clear mandate for employees.

By implementing and training its managers on the Carrot philosophy—a strategic method for creating a culture of engagement and retention based on the bestselling Carrots business leadership books by Adrian Gostick and Chester Elton—DHL leadership has created a culture centered around people,
recognition and results.

Now featured as an important case study in Gostick and Elton’s latest book, The Carrot Principle, DHL opens its doors to other organizations looking to improve engagement and drive tangible results.

Introducing Carrots
What are Carrots and why do they work? Just ask the leadership team of DHL’s Arizona-based IT group. As the pilot for the company’s revised recognition strategy, the Carrots philosophy was introduced just in time to make a big difference.

“The group needed to increase employee retention and engagement,” says Joan Kelly, vice president, recognition program creator and, now, also referred to as Chief Carrot Officer for DHL. “If we wanted to create a strategic recognition program that delivered real bottom line results, this was an important group.”

Under the philosophy that recognition, or Carrots, can act as an accelerator to greater business results while bonding people to the organization, the newly trained IT leadership team went to work. It wasn’t long before the Carrots recognition program delivered results.

Significant to the success of the program was the fact that DHL’s leadership not only provided training for their IT managers on recognition concepts, but also trained every employee. Every person was given a copy of a Carrot recognition book and trained on recognition basics, then tasked with acknowledging great behavior related to their goals.

In just the first six months, turnover within the IT department decreased 27 percent as Carrots began to impact employee morale, engagement and satisfaction.

Now that the program has launched company-wide across DHL’s U.S. workforce, the organization reports higher satisfaction and engagement scores across the board.

Creating A Carrot Culture
In order to create their Carrot Culture, DHL began by asking what initiatives were most important to the company. When the discussion centered on objectives such as identity, branding and delivering on a promise, DHL began evaluating the best way of making what was most important to the company equally important to every employee at DHL. They were looking to engage their workforce—heart, mind and soul.

The answer for DHL was the Carrot philosophy—a strategic method for promoting a culture of engagement and retention. DHL created a recognition program rich with symbols, energy and ample training on program objectives.

“We want the recognition culture to be infectious, for everybody to have it,” says Kelly. “It should be a great spirit that exists. We want every employee to feel that they own it and that they can be the difference between winning and losing.”

Zeroing in on DHL’s seven corporate values, Kelly and her team introduced the newly integrated DHL-Airborne workforce to the organization’s guiding principles as the criteria for the new recognition program. By associating recognition with behaviors that exemplify company values and goals, DHL helped employees understand the value the company places on them and their role in helping the organization achieve success.

To date, notable improvements have been made in the overall awareness and utilization of the recognition program, including a 30 percent increase in program participation in 2006. Employee satisfaction with the program, DHL and overall engagement levels have also hit all-time highs, as shown in the following graph:


image


“Truly there are a lot of heroes in our business,” says Scott Northcutt of DHL’s global leadership team. “Recognition is one way we go out and we find out who those heroes are and tell the stories. Great companies are often made of great stories that become legends about the business. That’s what we want. And recognition is how we’re going to do that.”

Training With Impact
DHL’s leadership team credits program success to its solid founding in core business principles, the energy of the Carrots philosophy and the company’s concerted effort to train managers on the how and why of recognition.

“Training helps managers understand how recognition benefits them personally— achieving goals, driving results, creating a unified, productive team. That’s what makes recognition an accelerator. It can accelerate individual and company progress toward mutual success,” says Carrots author Adrian Gostick.

Kelly and her team use recognition as a tool to unite employees and move the company forward as one, training senior leadership and employees alike.

“Training and constant communication are the best methods for fostering buy in,” says Kelly, who freely shares all recognition targets, goals and initiatives with employees. Measurement charts, goals and progress reports are plastered on DHL walls and communicated through the company’s Intranet site. It’s clear the company is promoting the use and impact of recognition and DHL is calling on every employee to participate.

“When people see the impact recognition is having on other areas of the organization they realize recognition is not another initiative, but a way of doing business,” says Kelly. “Once managers understand how to use the program and the direct benefits that come from it, we usually don’t have a utilization problem. So my job is to get the tools out there and educate people on how to best use them.”

A large part of DHL’s communication strategy involves recognition training, and for that DHL turned to O.C. Tanner’s Carrot Culture division. A specialized group of best-selling authors, speakers and trainers, the Carrot Culture Group helps managers grasp the power of the Carrot, or how to effectively use recognition and praise to create a high performance culture.

“The Carrot thing is catchy,” says Kelly. “It doesn’t take long to understand that DHL is all about high energy. ‘I’m On It’ is more than a theme around here, it’s a way of life. Our favorite word is ‘quick.’ It was important that our recognition program complement our commitment to that fast-paced, fun attitude in the workplace. The Carrot has become an icon for fun and positive things happening at DHL.”

With the understanding that employees most closely associate their work experience with their immediate manager, DHL set out to make sure managers understood the Carrot philosophy and how to bring recognition results to their workgroup. “With so many employees in so many different locations, we turned to our managers to assure the success of individual employees,” explains Kelly.

And from the company’s senior leadership team to ground level employees, DHL’s Carrot training sessions are making a difference.

“The recognition training session was great and the timing was perfect for me,” says Steve White, senior vice president of operations, who’s recommitted himself to driving business results through recognition. “In the heat of battle perhaps we think we are recognizing our folks enough but I must say that I’m sure I haven’t. It was a great reminder to ensure I do so not only in day-to-day business, but formally. I’m glad my team was there as it gives me the opportunity to lead by example!”

Many managers have taken principles taught in the training session back to their people and put them to work.

One such opportunity for adaptation came recently at a facility in Ohio. Instead of using a computer-based system that required formal nomination, managers felt strongly that their employees would respond more favorably to an on-the-spot program. So DHL introduced a more rapid, on-the-spot reward program aimed at encouraging quick results. By introducing a $50 award level that needs only the approval of a person’s local manager, program participation at the Ohio location improved significantly and location performance excelled.

Recognition Accelerates Business Results
Most importantly, DHL’s recognition initiatives deliver results. Because DHL does not shy away from measuring the effectiveness of recognition as a business principle, senior management is continually reminded of its importance through improved survey and business results.

“We recently brought a third party in to look at our service level versus our competition. They did it around the country in different areas and in almost every area our service is now at par or better than our competition,” says Kelly.

“The whole idea of recognizing, of inspiring and asking our employees to move that service level up, and then recognizing them for doing it, has made a tremendous difference for DHL.”

The company looks to expand their North American recognition program and the Carrot Culture abroad in 2007.

“We are planting Carrots around the world,” says Kelly. “Now we have the results to take this and get it out globally.”

And for the world’s largest express courier that means spreading the message to all of the company’s 540,000 employees.

“Recognition is separating us from the competition,” says Northcutt. “We have shown that when you have engaged employees, you in turn have higher sales, higher customer satisfaction, higher productivity and lower turnover. Recognition acts as the accelerator that can bring the company together around key objectives, the right behaviors and our values. More importantly, now we’re using it as an accelerator as we become the first choice for our customers in the package delivery business. Recognition has become a core part of our culture and it is something we will continue to build on.”

Key Takeaways:

  • DHL has adopted and thoroughly trains managers on the Carrot recognition philosophy as an integral part of their employee engagement strategy
  • The company increases recognition program participation and overall business impact through specialized training, constant communication of company values and clear program criteria
  • DHL monitors program impact on business results and employee engagement through regular employee surveys



      • 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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