By Emma Jacobs– The Financial Times
New services claim to democratise rewards, but can they improve the annual appraisal?
Andrew Goodman has overhauled how employee rewards are doled out at his company.
Instead of rewarding only a small group of high-performers, Openlink, a trading and financial risk technology company, decided to redistribute the same budget. Hundreds of his 900-strong workforce can now receive a spot award (on top of their annual bonuses). What is more, decisions about who receives the awards are no longer in the hands of managers alone. Now everyone has a say — and praise is published for all to see.
“It recognises folks who wouldn’t get much recognition,” says Mr Goodman, Openlink’s head of human resources. Staff were hesitant at first because they were not used to praising peers publicly. Now the scheme is popular. “People enjoy gratitude,” he says.
Employees do not only like the small rewards, he says, but also the public messages of praise that accompany them, deployed by a service called Bonusly, a software program that encourages employees to reward their peers for good work.
Each month, every member of staff receives points that they can award to teammates. The points can then be redeemed for Amazon vouchers, Starbucks cards or donations to charities. They come with a public message of praise and — with the aid of a hashtag — can be tied to a company value, such as #teamwork or #learning.
Bonusly is one of several “HRtech” employee recognition programs in a growing market. Others include Disco, Perkbox and Globoforce. All encourage staff to praise publicly their high-performing colleagues, either through discrete apps or by plugging into existing internal communication channels. The point of such HRtech, the services claim, is to encourage employees to engage more at work, and increase productivity in the process.
Dealing with colleagues frustrated by their IT systems can be a thankless task. But Tremaine Springer, an IT support analyst at Openlink, says he now feels more appreciated. “If I say I want a raise or training because of the invaluable service and experience that I bring to the table, Bonusly does help to back that,” he says.
Such systems are about “catching people doing things right”, according to Michael Rose, author of Reward Management. The new schemes are driven by social media. “We are reflecting the various platforms that people are using externally. It seems to work well.”
However, unlike Twitter, where public humiliation and abuse are rife, these schemes emphasise the positive. “It replicates the principles of sharing and making public the praise and good work. But you tell them off in private,” says Mr Rose.
Such systems help to connect remote workers, says Jeremy Vandehey, co-founder of Disco, an HRtech peer-recognition program. “It’s hard to swing by people’s desks, and say: ‘I think what you did was awesome, and I want others to see it’,” he says.
Disco works within existing internal communications channels, such as Slack. It is important that users can award praise seamlessly, or else they will not bother, says Mr Vandehey.
The programs are meant to help provide managers with a long-term view of performance. One problem with the conventional annual review, says Raphael Crawford-Marks, co-founder of Bonusly, is recency bias — in other words, we only remember things that happened recently.
Another problem can be the general tone of feedback. “The way workplaces are set up incentivises neutral or negative communication”, says Mr Crawford-Marks. For example, “I need this report next week” (neutral); or “I needed this report last week, where is it?” (negative). “The overall tenor of communication is skewed slightly negative.”
With HRtech systems, managers can compile a report of their team members’ peer evaluations. “It emerges from the crowd,” he says. “It’s not a better source of data but it’s a different one. Using multiple sources might be a better performance review. It might mean a manager can get the data on the events that were most successful.”
Such systems also help managers and peers get into the swing of praising one another, says Mr Vandehey. “Everyone craves feedback but there’s a lot of barriers to giving it. It’s like a muscle you have to build. It gets people used to recognising others.”
One employee who worked at a large US tech company that used peer-recognition systems and did not want to be named, believes such systems appeal mostly to young employees.
“It’s a continuation of grade school. It didn’t make me feel valued. If you’ve been in the workforce for 20 years, it is a change. I’m a cynical person.” She insists that such schemes must be accompanied by constructive feedback, rather than generating constant, meaningless praise. Mr Crawford-Marks says his system only rewards good work. It is important, he says, that criticism is made sensitively and in person. HRtech systems such as Bonusly and Disco can offer public leader boards, where employees can see who is doing best.
Mr Vandehey points out that these can be switched off, though most companies prefer to make them public. “Broadcasting the statistics might not be the right answer. It can make people feel crappy.”
André Spicer, professor of organisational behaviour at Cass Business School, agrees. “In the worst cases it could [make] the workplace into a kind of schoolyard popularity contest.” There is also a danger that such systems emphasise only winning, says Mr Rose. “You want a culture where people are innovative and thoughtful. You have to encourage people to take risks within certain limits. You can recognise people who are being innovative even if the project failed.”
HRtech can reaffirm company values, says Mr Vandehey, by publicly celebrating behaviour that employers would like to see replicated.
Do employees try to game the system? There have been a few bad apples, says Mr Vandehey, who would try to cheat the system through praise loops (I praise you, if you praise me back).
Technology is not a panacea. “We’ve had companies who had a toxic culture and it wasn’t working”, says Mr Crawford-Marks. “We have had companies who don’t trust their employees and set the monthly target so low that they feel that they aren’t trusted enough to even reward their colleagues.” Nor can employers force their staff to praise one another. “It’s got to be genuine and real”, says Mr Crawford-Marks. “What you can’t say is: ‘You’re not recognising enough people. You have to use it more’.”
A guide to HRtech
A UK start-up that offers employers perks, discounts and health programmes to encourage staff engagement. Anyone can give praise, but only managers can issue rewards, such as vouchers and prizes.
This US-based company, started in 2015, uses artificial intelligence to scan employees’ messages to one another. If a bot spots an employee being congratulated for good work, it will automatically award a star. Clients include Adobe and Spotify.
Founded in 2012. Just over 1,000 companies use the service, including Hulu, Oracle and Chobani. The Boulder, Colorado-based company has investment from FirstMark Capital and Bloomberg Beta.
The elder statesman of employee social recognition. The company was started in Ireland in 1999, and encourages employees and managers to mark service milestones as well as life events. Customers include Hershey and Cisco.