How companies can bridge productivity gaps with individual recognition

Posted by Kevin Chamberlain

Corporate management and HR leaders are constantly reminded that workplace productivity remains a concern, with abundant evidence showcasing the widening gap between a cluster of top-performing companies and a long tail of underperforming firms.

CR Worldwide’s report, The rise of Corporate Wellness 2.0, has found that a widening productivity gap is also reflected when comparing the performance of national economies, with OECD figures showing a patchwork of productivity across geographies and stark gaps in output between emerging and advanced economies.

At a national level, lower workforce productivity has been shown to slow wage increases and living standards. At a company level, it results in reduced profitability, competitiveness and growth potential. Nowadays, companies are investing in new programmes and engagement strategies in order to bridge productivity gaps and build wellness for employees.

Spending on these programmes is on the increase globally, because they are proving to be effective on multiple levels

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Recording and rewarding personal productivity

Many employers are turning to recognition and incentive programmes to address productivity issues. The new generation of workers value individual impact, therefore prompting companies to utilise person-centric performance targets and incentives. Spending on these programmes is on the increase globally, because they are proving to be effective on multiple levels. In the UK, spending on recognition and incentive programmes doubled between the period 2016-17 and 2018-19, reaching almost £7,000,000. At the same time, the average US corporate spend on employee rewards soared by 67% in 2019 and average spending on rewards for sales teams has more than tripled from $103 per head to $353 per head in the past year alone.

Not only are recognition and incentive programmes important mechanisms through which employee mental wellness can be improved, but they are also highly effective in driving productivity improvements. What is most interesting is that we can learn about what motivates employees by looking at how they are engaging with these programmes and how this varies across regions.

CR’s report data, compiled from analysing recognition and incentive programmes for 287,000 employees across 120 countries, reveals that employees in EMEA and North America are the most engaged with these programmes. In EMEA, the rate of points redemption was 97% while North America the figure was 81%. Importantly, employee engagement and loyalty to an employer are key aspects of productivity.

This is evidenced by observable trends from the data on preferences for ‘banking’ points. In North America, only 44% of employees that earned points chose to convert them into prizes over the past 12 months, while the figure in EMEA was 47% over the same period. This is a strong indicator that employees are increasingly focusing on working towards bigger and more long-term targets, suggesting that they are motivated, ambitious and plan to remain with their current employers.

While companies can’t address all of the underlying issues related to low or patchy productivity across economies in isolation, they are investing in recognition and incentive programmes as proven leading ways to combat this issue. Looking at the UK for example, we see stark differences between the best and worst performing companies, which has led to an over-reliance on a top tier of high performers. The UK has a significant number of innovative, high-growth firms than comparable countries such as France and Germany, yet it also has a large number of companies performing well below average.

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Addressing employee wellbeing

Research also shows us that one of the key reasons for workforce underperformance is lack of mental and physical wellbeing – especially among younger workers. Linking recognition and incentive programmes to corporate wellness initiatives offers a practical way to achieve productivity gains and one which employees are likely to engage with.

Employers are investing in corporate wellness programmes, taking into account initiatives that prove popular with employees. Long hours lead to unproductivity, while a better work/life balance leads to higher output. For example, in the US, an extra day off was the most common reward redeemed last year. Other initiatives that are proving popular in the US are free life-coaching and ‘nap rooms’. Meanwhile, in the UK, increasingly popular initiatives include ‘pawternity leave’ for employees with new puppies, flexible hours, home working and the chance to buy and sell holiday days.

Take a look at our report for more information on why employee recognition and incentive programmes to corporate wellness initiatives produces performance results. As more employers adopt these initiatives to keep up with innovation and competition, we should see a more even spread of high productivity and workforce performance across economies.