Employees at Dow Chemical didn’t lack op-portunities for recognition. For years, corporateleaders at the multinational corporation, whichcounts some 45,000 employees in 62 countries,had managed hundreds of programs highlightingexceptional work.

Still, satisfaction proved anemic, and the scat-tershot approach made usage and other resultsdifficult to track, says Sylvia Kronwald, programmanager for Dow’s global recognition program.In 2005, Dow officials wiped the slate clean, hir-ing international recognition provider Globoforceto provide an approach that was centrally con-trolled but could be locally tailored to the inter-ests of employees from Italy to Indonesia.

Since then, nominations increased from morethan 107,000 in 2005 to 133,000-plus in 2006,Kronwald says. More than 75 percent of Dowemployees have been nominated; 95 percent ofthem have received awards ranging from e-cardsto gift certificates. Kronwald declined to detailDow’s investment, but she believes the money iswell spent. “If a colleague, someone the employ-ee works with, recognizes them officially, thathelps with motivation and teamwork,” she says.

As the recognition industry matures into itssecond decade, multinational companies aremoving away from regional programs and ex-panding to the global stage, recognition profes-sionals say. Motivating across time zones, though,

Motivating the worldIn today’s far-flung economy, companies need to manage recognition globally while tailoring rewards for local markets.

Awards that are in line with business goals are the most likely to ensure a substantial payoff, but organizations expect-

ing immediate results may be disappointed. Stories by Charlotte Huff • Infographic by Gonzalo Hernández

Source: Russell Investment Group analysis, 2006

s e p t e m b e r 2 4 , 2 0 0 7 w w w . w o r k f o r c e . c o m | Workƒorce MANAGEMENT 25

45.6% Cumulative stockreturn from 1998 to2005 for S&P 500companies.

INC

EN

TIV

ES

SN

AP

SH

OT

200.6% Cumulative stock return from1998 to 2005 for companieslisted in Fortune’s “Best 100Companies to Work For.”

SPECIAL REPORT:REWARDS & INCENTIVES

Source: Kenexa, “Employee Positiveness Perceptions in Multinational Organizations,” February 2007

CROSS-CULTURAL JOB PERCEPTIONSMultinational corporations may present a seamless face to the public. But a Kenexa Research Instituteanalysis published in February reveals that employee perceptions of the internal job experience canvary substantially among different nationalities. The analysis, based on more than 29 million survey re-sponses from U.S. and European multinationals, revealed the breakdown shown above in employeesreporting a positive perception of their internal job experience.

Most positive

Least positive

UNITEDSTATES - 67%

WORLDWIDEAVERAGE - 64%

INDONESIA - 77%PERU - 74%

COLOMBIA - 74%

COSTA RICA - 73%PHILIPPINES - 72%

JAPAN - 45%

POLAND - 50%

FINLAND - 53%

FRANCE - 54%HUNGARY - 55%

Sylvia Kronwald,Dow Chemical

WORKFORCE MAIN 09-24-07 B 24,25,26,27,28,29,30,31 WFDB 9/19/2007 10:05 AM Page 2

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still requires tight adherence to core recognition principalsto make such investments worthwhile, they say.

Rewards should be closely aligned with the company’sstrategic goals and return on investment should be ana-lyzed. Additionally, gift cards or other rewards should not beconsidered a substitute for less tangible rewards, such asmanagerial support and interaction.

In short, companies must learn to manage recognitionglobally, but customize such efforts locally, says Christi Gib-

son, executive directorof Recognition Profes-sionals International,located near Chicago.“What works in an-other country may notwork here,” she says.“And what works heremay not work there.”The nonprofit profes-sional group, founded

in 1998 as the National Association for Employee Recogni-tion, changed its name this year to reflect that 10 percentof its 850-plus membership is internationally based.

If done well, effective recognition can develop an interna-tional cadre of engaged employees who help drive the com-pany’s long-term goals, says Bruce Bolger, executive directorof the Forum for People Performance Management andMeasurement, which is affiliated with Northwestern Univer-sity’s Medill School of Journalism. The potential payoff can

be substantial, says Bolger, pointing to a 2006 analysis by theRussell Investment Group, which compared stock perform-ance for companies listed in Fortune’s “Best 100 Companiesto Work For” with the S&P 500. Its findings: From 1998 to2005, the cumulative returns were 200.6 percent for the“Best 100” list, compared with 45.6 percent for the S&P.

But cultivating engaged employees doesn’t happen over-night, Bolger cautions. “Corporations today tend to preferinitiatives that can get them a result in a year or less,” hesays. “The major obstacle related to the implementationof people performance strategies is that it’s a longer-terminvestment.”

PREVENTING JOB HOPPING

Today’s employees may be less inclined to put down cor-porate roots than even a few years ago, if the latest “World atWork” survey by staffing company Randstad is any indication.

In 2003, just one-third of employees were scouting outjob alternatives. By early 2007, more than half—54 per-cent—were poised to go elsewhere, according to the surveyresults, which involved 3,139 employers and employees.

Companies may not be taking sufficient steps to retainemployees. Genia Spencer, Randstad USA’s managing di-rector of operations and human resources, says more em-ployers—60 percent versus 55 percent—reported searchingfor new talent to fill anticipated vacancies than those whowere grooming people from within.

“Are we creating our own self-fulfilling prophecy?” Spen-cer asks. “We expect for [employees] to leave, so we put our

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Corporations tend to opt for

initiatives that can produce

results in a year or less.

“The major obstacle related

to the implementation

of people performance

strategies is that it’s a

longer-term investment.”

––BBRRUUCCEE BBOOLLGGEERR, Forum for People

Performance Management and Measurement

Companies must look at

managing recognition from

a global perspective, but

customize such efforts

locally. “What works in

another country may not

work here. And what works

here may not work there.”

––CCHHRRIISSTTII GGIIBBSSOONN,

Recognition Professionals International

More employers search

for new talent, than groom

people from within. “We

expect for [employees]

to leave, so we put our

resources into planning for

them to leave, versus finding

reasons for people to stay.”

––GGEENNIIAA SSPPEENNCCEERR,

Randstad USA

“That personal touch—the

personal thank-you, whether

through a phone call or a quick

e-mail—is so important.”

––SSYYLLVVIIAA KKRROONNWWAALLDD, Dow Chemical

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REWARDS AND ROI:A ‘FUZZY SCIENCE’?AT MGM GRAND, the customers lining rows of slot machines aren’t

the only ones who can anticipate a windfall. So can the 9,500 employ-

ees who staff the sprawling casino on the Las Vegas Strip.

MGM officials offer an array of recognition programs, some of

which can be delivered spontaneously to encourage employees to

provide top-tier customer service, says Bette Gaines-Snyder, director

of slot and employee events at MGM.

Las Vegas doesn’t lack for deluxe rooms and flashy shows to com-

pete with MGM’s own plush offerings, she says. And so, “we tell [em-

ployees] that they are the reason that customers come back to MGM

Grand,” she says. “We say, ‘You are the brand—you

are the ones that can make the difference.’ ”

To date, recognition has resulted in some tangible

financial payoffs, according to MGM officials. From

2004 to 2005, slot club enrollments per employee in-

creased from 1,052 to 1,582, according to a white pa-

per they recently submitted to Recognition Profes-

sionals International. Wedding chapel revenue per salesperson

increased 13 percent; revenue per employee in a fine dining restau-

rant increased 34 percent.

Christi Gibson, RPI’s executive director, cites MGM results as gold-

plated evidence that recognition can drive results, if the right behav-

iors are encouraged. But not everyone is equally convinced that

cause-and-effect relationship can be drawn with any level of certainty.

Even recognition enthusiasts insist that other factors may influence

results, whether it’s employee retention or heftier sales.

Employee retention, for example, can be shaped by other forces,

such as the overall economy and managerial competence, says Danny

Hackett, program manager for the Living FAST Recognition Program

at Reuters. From January 2005 to December 2006, the media compa-

ny invested about $2.6 million in employee rewards to help encour-

age specific employee behaviors, including service and a team focus.

Those dollars, Hackett believes, boosted employee performance.

But he’s reluctant to isolate a specific return on investment. Measur-

ing ROI on recognition programs, he says, is “at best a fuzzy science.”

Gibson counters that such doubts will fade as corporate leaders be-

come more adroit at identifying

the precise behaviors they desire.

“You have to recognize the correct

items,” she says. “You can’t just

throw money or gifts at people.”

MGM Grand, which earlier this

year received RPI’s “best overall”

award for best-practice recipients,

gives thousands of awards each

year, Gaines-Snyder says. Each quarter, about 1,000 employees re-

ceive distinction—called Maximum Vegas Performance Commenda-

tions—for fulfilling six core values and 16 service standards, such as

timely service and creating a memorable first impression, she says.

Award recipients are entered into a drawing; dinners and show pack-

ages are among the prizes.

Another award, the Gold Key, is delivered by a convention organizer

who can recognize any employee on the spot (with a key) for exempla-

ry service. Additional recognition occurs in the daily pre-shift meet-

ings, when employees gather to be briefed on the day’s activities.

Officials at the Scooter Store, in New Braunfels, Texas, take a similar

customized approach when they launch quarterly challenges. Each one

promotes certain employee behaviors, says Burton De La Garza, events

and celebrations manager. During a first-quarter challenge this year,

the performance of 75 call center employees was tracked and posted

daily based on five specific measures, includ-

ing the number of incoming calls answered,

call availability and generating referrals.

“You have to take this down to the indi-

vidual level; you have to make it tangible to

that individual,” De La Garza says. “What

are the behaviors that will produce more re-

sults? If you’re rewarding and recognizing

the wrong things, what’s the point?”

Officials at the Scooter Store, a privately held company with about

1,100 employees, say the number of potential sales leads increased

substantially during the three-month challenge. But they declined to

release numbers to back that up, calling the information proprietary.

MGM officials have no such qualms. In their white paper submitted

to RPI, they pointed out that the casino’s annual revenue increased

from $714 million in 2003 to more than $1 billion in 2005. Employee

recognition efforts, they wrote, “played a key role.”

—C.H.

Gaines-Snyder

PH

OT

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CO

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TE

SY

MG

M M

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GE

Las Vegas MGM Grand officials credit the company’semployee recognition program for a 13 percent in-crease in wedding chapel revenue per salesperson, a34 percent increase in revenue per employee at afine dining restaurant, and a marked increase in slotclub enrollments per employee from 2004 to 2005.

“What are the behaviors that will

produce more results? If you’re

rewarding and recognizing the

wrong things, what’s the point?”––BBUURRTTOONN DDEE LLAA GGAARRZZAA, the Scooter Store

WORKFORCE MAIN 09-24-07 B 24,25,26,27,28,29,30,31 WFDB 9/19/2007 10:05 AM Page 4

resources into planning for them to leave,versus finding reasons for people to stay.”

Job angst isn’t confined to U.S.-basedemployees. According to analysis by KenexaResearch Institute published this year, pos-itive employee perceptions toward their jobexperience in U.S. and European multina-tionals varied substantially among national-ities. Indonesians were most likely to reporta positive job experience, at 77 percent,compared with 45 percent by Japanese, ac-cording to the institute’s analysis of more

than 29 million survey responses frommultinational companies. The overall aver-age was 64 percent; U.S. employee percep-tions were 67 percent.

In some Asian countries, where skilledemployees were once satisfied with landinga job, the bar is quickly moving higher, saysKurt Hosna, international solutions man-ager for St. Louis-based Maritz Motivation.Employees in bustling tech centers maymove to a nearby building—changing com-panies in the process—every six to 12months for salary differences of 5 percentto 10 percent, he says.

To meet that challenge, corporate lead-ers have been moving to a more globallyconsistent recognition approach to attractand retain talent, Hosna says. In 2006,Maritz unveiled its global rewards product.

“Companies want to treat their work-force as one workforce,” he says. “They sayit’s really key that employees outside theUnited States don’t feel like they have asubstandard program compared to the U.S.program.”

ALIGNING STRATEGYAND REWARDS

Before 2003, Reuters recognized exem-plary work, but the media giant’s approachwasn’t doing much to cement employee loy-alty or effectiveness, says Danny Hackett, aReuters program manager. The programstended to be one-time efforts rather than

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RISK OF CREATING‘SOFT’ EMPLOYEESAFTER COMPLETING A three-month challenge, 75 call center employees at the Scooter

Store took off most of an April afternoon for a Hawaiian-themed celebration featuring

food and an auction.

During the prior weeks, the employees had earned so-called Magnum dollars—named

after department’s manager, who wore a “Magnum, P.I.”-style mustache. That afternoon

they cashed in, “buying” such rewards as T-shirts, front-row parking spaces, massages,

executive chairs and noise-canceling headsets. Nearly everyone walked away with some-

thing, says Burton De La Garza, events and celebrations manager.

“I could buy one big-screen TV and give it to one person,” De La Garza says. “Or I

could give everyone in that organization something tangible that they could have. Our

company believes in giving something to as many people as you can.”

De La Garza echoes those who argue that recognition can never be excessive if tied to

exemplary work. But some recognition professionals and psychologists question if gen-

erational dynamics are pos-

ing new challenges, as

younger employees enter

the workforce after years of

accumulating soccer tro-

phies and extra credit. The

dilemma for managers: how

to recognize those craving

kudos without creating “soft”

employees?

“So many people in busi-

ness are having a difficult

time dealing with the expec-

tations of the younger gen-

eration,” says Jean Twenge,

a psychologist and author of the book Generation Me, based on her own research into

generational differences. Managers speak of younger employees with outsized expecta-

tions, anticipating a management position within a few years, or those who crumble at a

whiff of criticism, she says.

“Companies have to worry rightly about retention because retraining employees is ex-

pensive,” says Twenge, an associate professor of psychology at San Diego State Univer-

sity. “But they can’t spend all their money giving pats on the back. There has to be some

kind of balance here.”

To be effective, managers must learn how to credit exceptional work without devalu-

ing the recognition power they wield, says Ken Siegel, a Los Angeles-based psycholo-

gist and president of the Impact Group, which works with Fortune 500 companies. To

that end, Siegel recommends that managers make sure any rewards aren’t in excess of

the employee’s accomplishment. And recognition shouldn’t become predictable, in ei-

ther timing or approach, because that saps the meaning, he says.

Above all, set clear expectations. At times, that might require “a little tough love,”

says Bob Nelson, author of 1001 Ways to Reward Employees. “When the [employee]

complains about not being recognized, you can have a little discussion over what it

would take to recognize them,” he says.

Siegel and Nelson, though, are skeptical that most employees are showered in praise.

According to a 2006 Maritz poll involving 1,003 adults, only 43 percent agreed that

they were consistently recognized in meaningful ways.

Baby boomer managers might be exposing their own psychological baggage when

they kvetch about the alleged neediness of younger workers, Siegel says.

“It’s almost an envy-based attack,” he says. “It’s the same praise and recognition that

they would have liked to have had heaped on them.”

—C.H.

“[Companies] say it’s really

key that employees outside

the United States don’t feel

like they have a substandard

program compared to the

U.S. program.”––KKUURRTT HHOOSSNNAA,

Maritz Motivation

“[Companies] can’t

spend all their money

giving pats on the

back. There has to be

some kind of balance

here.”––JJEEAANN TTWWEENNGGEE, psychologist

and author of the book Generation Me

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Project1 9/17/07 11:22 AM Page 1

part of a larger strategy or program, he says.Of equal concern, employees perceived

that the initiatives were largely confined tosales, and the same people always seemedto garner kudos, Hackett says. “That was avery negative perception to have.”

Reuters revamped its approach with aneye toward aligning recognition with themultinational company’s business strategy.

The Living FAST Recognition Programwas born. FAST stands for Fast, Account-able, Service and Team-focused—behav-iors the company wanted its 16,000 em-ployees to embody.

“The main focus was to get people invig-orated and believing in the value of ourFAST values,” says Hackett, the manager ofthe program developed by Globoforce.

From January 2005 to December 2006,Reuters invested about $2.6 million inawards. In the process, employees have be-come more focused, Hackett says. “Do peo-ple now know what it means to go aboveand beyond? Absolutely,” he says.

Although specifics differ among prod-ucts, global recognition programs generallyallow corporations to centrally administerthe distribution of employee points orawards, but with a local twist. Typically avariety of languages are available. Cost-of-living differences also can be incorporated.Both Globoforce and Maritz adjust awardsbased on a country’s purchasing power.Otherwise, a $200 award in some parts ofthe world might be enough to launch a newbusiness, says Derek Irvine, vice presidentof global marketing and client strategy atGloboforce.

With such fierce competition, humanresource directors must be savvy shoppers,says Bob Nelson, author of 1001 Ways toReward Employees and president of NelsonMotivation Inc., a San Diego-based man-agement training firm.

Be sure to delve into details, such ashow the data is tracked, to make sure a par-

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30 Workƒorce MANAGEMENT | w w w . w o r k f o r c e . c o m s e p t e m b e r 2 4 , 2 0 0 7

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Ask if the company pays for

rewards as they are compiled

or only once an employee

redeems them. “That one

statement could save you

millions of dollars.”––BBOOBB NNEELLSSOONN,

Nelson Motivation Inc.

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ticular vendor meets the company’s strate-gic needs, Nelson says. Figure out howmuch flexibility and customization is avail-able on the local level. Also, ask if the com-pany pays for rewards as they are compiledor only once an employee redeems them.“That one statement could save you mil-lions of dollars,” he says.

As you define your global recognition ap-proach, don’t fall into the trap of relyingsolely on gift cards or other tangible rewardsto nurture cross-cultural loyalty and com-mitment, Nelson says. Dow’s Kronwaldagrees. Informal daily recognition is crucial,she says. “That personal touch—the person-al thank-you, whether through a phone callor a quick e-mail—is so important.”

ADDRESSINGCULTURAL DIFFERENCES

Complex cultural differences can poten-tially undercut the most well-intentionedrecognition effort, says Spencer of Rand-stad USA. “Different cultures have differ-ent motivators,” she says. In some cultures,respect is the No. 1 driver, she says. “Infact, giving [an employee] a gift card couldbe extremely insulting because it could besaying that you are bribing them to do whatthey already do.”

That’s why local tailoring of rewards—both their selection and presentation—isso crucial, experts say. Team recognitionoften carries more weight in Japan, whilepublic recognition of individuals is preferredin other locations, such as Bangalore, Hack-ett says.

Reward preferences also can differ sig-nificantly, says Globoforce’s Irvine. In India,a big reward might be tickets to a newly re-leased movie. Employees in Great Britain orGermany might prefer a reward related tohome improvement. In France, food- andwine-related treats carry significant appeal.

Regardless of whether companies con-tract out such efforts or oversee them inter-nally, the challenges of motivating cross-culturally are further accelerating thedemands placed on busy recognition pro-

fessionals, Gib-son says.

“I’m hearingmore from differ-ent CEOs that

they have their own [recognition] sectionnow,” she says. “Eventually we’re going tobe seeing vice presidents of recognition.”

In the end, multinational companies aresimply trying to persuade employees to mir-ror the behaviors and values corporate lead-

ers already tout to the outside world, saysBolger, of Northwestern University’s per-formance management forum.

Dow Chemical, he says, provides a greatwindow into how that effort can unfold. In2006, the company unveiled its “HumanElement” marketing campaign, which offi-cials described as emblematic of the com-pany’s commitment to solving human prob-lems around the world.

“You create an expectation now withDow that they are really focused on humanbeings,” Bolger says. “So if a scandal comesout about how they are treating their em-ployees or their customers, they are reallyon the line.” wƒm

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C h a r l o t t e H u f f is a freelance writerbased in Fort Worth, Texas. To comment, e-maileditors@workforce.com.

� Workforce.comA CEO’s thoughts on thepower of recognition:workforce.com/power

WORKFORCE MAIN 09-24-07 B 24,25,26,27,28,29,30,31 WFDB 9/19/2007 10:07 AM Page 8