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Michaela Leo, director of compensation at Merck & Co Inc. understands and appreciates the perception that employee recognition can be expensive. But she stresses the importance of not looking at employee recognition as a cost.
“The return on the investment [in employee recognition programs] — and I call it an investment and not an expense — is significant. You have lower turnover. Recognition increases performance and it drives engagement. So, you definitely have a lot of positives there,” Leo recently told attendees on Day One of the WorldatWork Total Rewards Virtual Conference (held Oct. 11 – Oct. 13).
Merck & Co. needed to see more positive outcomes from its employee recognition efforts in 2017, when the Kenilworth, N.J.-based pharmaceutical company was looking to shake up its recognition strategy, said Leo during a presentation that she delivered with Christopher Cardarelli, executive director of human resources at Merck.
“We wanted something different and new,” said Leo, who recalled receiving a crockpot to commemorate her five-year anniversary with the company. “We heard from employees that they wanted something more modern. We decided we needed a new approach.”
The first step that led to a partnership with human capital management software provider Workhuman and the development of Merck’s INSPIRE recognition program was to assess what wasn’t working about the company’s current recognition strategy.
For example, the company’s approach to recognition included an antiquated service anniversary program, confusing, manual, paper-based processes that did not recognize employees in real time, and was manager-driven with no ability for peers to recognize each other, said Leo.
The goal, she said, was to create a much more employee-centric user experience that established consistent global recognition processes throughout the company and enabled real-time recognition among employees, in the most critical moments.
In November 2017, Merck launched INSPIRE, a global peer-to-peer recognition program, with the help of more than 400 ambassadors from throughout the organization, a comprehensive communications strategy that included 300 pieces of collateral, a branded visual campaign and, crucially, sponsorship from the executive team and frontline managers.
Available in 11 languages around the world, the program has allowed employees “an opportunity to give more awards more frequently, smaller awards, and has had strong support from executives,” said Leo.
“Recognition done the right way has a lot of impact,” she added. “And we’re seeing that in our [INSPIRE] program right now.”
The organization is certainly seeing results. For example, a new recognition connection within Merck is created every 39 seconds via INSPIRE, with 94% of employees having been recognized through the program.
And, within the first year of the program’s existence, the company’s annual employee survey has seen a 12-point increase in the number of employees saying they feel recognized for the work they do. Merck has also found that new hires receiving recognition through INSPIRE are more than five times less likely to leave the company during their first year.
Cardarelli interjected to give some recognition to Leo and the rest of the team responsible for listening to employees’ desires regarding recognition when designing INSPIRE, and to offer his thoughts on how the aforementioned statistics highlight the program’s positive effects on employee recognition at Merck.
“I think that, without the INSPIRE program, we would have never been able to understand this impact,” said Cardarelli. “It was very telling that we were listening to our employees, that we heard them and that we put something into play that would meet their needs. Phenomenal work.”
“We’ve hit more than two million moments of connection” since INSPIRE’s November 2017 implementation, said Leo. “This shows how the basis and the foundation for recognition always existed here at Merck. All we needed was a platform to enable our employees to express their gratitude and to express that recognition.”
About the Author
Mark McGraw is the managing editor of Workspan.