Employee Engagement: How Research Can Help Hoteliers Optimize Recognition and Reward Programs
This byline by Magid’s Rick Garlick was originally published on Hotel Executive.
By this point, the idea that having highly engaged employees leads to a positive guest experience is widely accepted and no longer a subject of debate. Despite this, many hoteliers still focus on operational efficiency, sometimes to the detriment of their staff. This is not to say the two are mutually exclusive, but successful businesses, particularly those with a high degree of employee-customer contact, recognize the importance of getting the best performance possible out of every staff member.
In strong economies, the cost of voluntary turnover is also something that warrants concern about making sure employees enjoy coming to work and performing their assigned jobs.
3 Key Components of an Engaged Workforce
While different definitions of employee engagement exist, there are three primary components to having a highly engaged workforce. The first is identifying talent, which focuses on putting people in jobs that best fit their personalities and natural abilities. Putting an introverted person in a position that involves high degrees of customer interaction does not represent the best alignment of talent and job function. Similarly, putting someone with very little persistence to pushback in a sales position is also a misalignment.
The second component is having a strong service culture. Edward Deming once famously asserted that a ‘bad system will beat a good person every time.’ If the system impedes the individual’s ability to effectively serve customers, a talented person will suffocate and become easily frustrated. Examples of a poor service culture include having policies that are self-serving for the company, but detrimental to the customer that the employee is forced to enforce, having salespeople promise things to customers that operations cannot support, serving under managers that fail to listen to customers or customer facing-employees, or not being personally empowered to help your guests.
While much is made of the employee-customer service profit chain, it can be argued that unhappy customers de-motivate employees more quickly than the opposite holds true. Feeling powerless to do anything meaningful to resolve a customer concern is certainly discouraging to anyone who takes pride in his or her work.
Another aspect of a poor service culture is rewarding people for behaviors that do not directly serve customer interests. For example, call center employees are typically rewarded and recognized for the number of calls handled per hour. This makes it tempting for a call center employee to hang up on, or grow impatient with, a customer who is keeping them on the phone too long. Rather than focusing on resolving the customer’s concern, the call center employee is more focused on the time they are spending on the phone.
The final component of employee engagement has to do with motivation and performance incentives. If you think of talent as representing the nature component of engagement, then motivating and incentivizing performance represents the nurture part of the formula. However, reward and recognition strategies are often ineffective at best, and de-motivating at worst. The very things that motivate some people are ineffective incentives for others as. some people thrive on public recognition, while others find it extremely uncomfortable. There are those that find the opportunity to learn and grow to be the best motivator, while others simply would like to get paid more for the job they do.
One explanation for ineffective recognition strategies is that people who design and implement recognition programs construct those programs around motivators they find to be personally rewarding. With good intentions, they assume that if they’d personally appreciate a particular form of recognition, others must as well. There is also a one size fits all mentality that everyone likes the same thing. Of course, it’s easier to implement a blanket program than to individualize recognition, but does it pay off?
Improving Employee Motivation
In an employee engagement study of over 150 companies conducted in 2017, more than half of those surveyed (53%) reported conducting an employee engagement survey, up from 49% in 2016. For hospitality companies, in particular, these engagement surveys are important as they sell people and services as much as rooms, so their insights are valuable. Yet, characteristically, one of the lowest rated items on employee surveys is satisfaction with reward and recognition. This is often frustrating because companies spend significant amounts of money on gift cards, merchandise, service awards, and other ways of recognizing their employees.
Certainly, one contributor to the frustration is the aforementioned practice of recognizing and rewarding behaviors that are not in the customer’s best interest. If employees are being recognized for the wrong behaviors, it potentially creates an internal conflict. However, the problem extends beyond the behaviors for which people are rewarded into the ways that people are rewarded.
In the market research world, customer segmentation research is used to determine the things that motivate purchase behavior. There is recognition that people have different drivers of purchase. For example, if you sell a car, some customers will be most interested in the car’s performance, while others focus on the styling. The key to effective selling is to understand that people are motivated differently and that effective sellers will strive to recognize the factors that inspire individual purchasing behavior.
Similarly, if we understand what’s most important to our employees, and can design meaningful incentive programs, we can maximize employee motivation in the same way identifying the most important customer motivators drives purchase behavior.
Another big success factor is linking incentive programs to your customer and employee branding. For example, several years ago, a hotel chain with the customer tagline ‘we turn moments into memories’ sought to create an employee recognition program with a similar theme. Rather than simply giving a cash bonus, merchandise, or some other tangible reward, they sought to create memorable experiences for their employees.
Whether it was a night on the town, arranging a visit from an out-of-town loved one, or giving someone an experience they always wanted, the idea was to create something that would be memorable for the employee as they seek to create a hotel experience that is memorable for their guests.
What’s the best way to identify how to uniquely motivate employees? Ask them. One way is to use your existing survey to probe how people like to be recognized and rewarded. Of course, sometimes anonymity is an issue, as is social desirability. For example, people occasionally don’t like to state they’d just like to be paid more, even if it may be true. But an employer needs to know which carrot on the stick works best. Reward and recognition approaches typically fall into several categories:
- Cash Bonuses
When asked how people would most like to be recognized and rewarded for strong work performance, the most common response is people would like to be paid more. However, from a motivational standpoint, cash bonuses don’t do much to inspire performance as they come to be regarded as part of the employee’s compensation. They can begin to feel like an entitlement and become more of a dissatisfier on occasions when they are not given, as opposed to an incentive that inspires performance.
Furthermore, cash bonuses are frequently used to pay down bills or debts, which dampens the enthusiasm associated with receiving them. This is not to say cash bonuses should not be given to worthy recipients, but should not take the place of other non-cash incentives.
- Merchandise, Gift Cards, and Award Points
While these rewards have some tangible monetary value, they feel a bit different than simply giving cash. One of the more effective uses is to give things that people want but would not prioritize getting for themselves. Receiving non-cash incentives with tangible value feels like a reward because one does not have to justify getting something, they want but don’t need. For people who don’t make a lot of money, these non-cash tangible incentives carry a great deal of value.
- Incentive Travel
Travel experiences are quite popular and are frequently given to high performers on an annual basis. Millennials, in particular, are gravitating toward travel experiences that are transformational in nature. The challenge is when people have families and cannot travel, or perhaps are simply more homebodies in nature.
Aside from these tangible rewards, there are many intangible incentives as well, including providing growth and development opportunities, flexibility in scheduling, the opportunity to mentor others, and in many cases, the opportunities to take on new areas of responsibilities. Of course, a popular reward is to be offered lunch with the boss. People may not be surprised to learn that most of the time, people would rather have lunch with their friends and families-go figure.
At the end of the day, the goal is to use the tools you have available to determine the best ways to motivate employees. Start by asking them how they like to be recognized, either directly or through a survey tool. Organizations often have a small percentage of their budget set aside for reward and recognition and they want to get the biggest impact for their investment. You still may not inspire everyone, but you can extend your motivational reach beyond its current state and inspire your talented staff to even greater levels of performance.