Engagement

Siemens' Recognition Rebuild

By Leo Jakobson
June 5, 2012

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There are many ways to go about convincing upper management to invest the time and money needed to turn dozens of independent, local employee recognition initiatives into one umbrella program every manager in the company can use.

But when the compensation team at Siemens Corporation, the 60,000-employee, $20 billion American arm of the global manufacturing, technology, and services giant, began creating the You Answered recognition program six years ago, the argument that really convinced top management to approve the plan was all dollars and cents, says Susan Brown, the firm's director of compensation.

"We started looking at what the spend was," she says. "One division had an external vendor. They knew exactly what they were spending. Another group, of our 12, had some idea but wasn't tracking all the cost factors. In many other groups it was hidden in expense reports or the random expenditures line item. We had to ask ourselves: 'Are we getting the value for the money we're spending when we don't know what we're spending?'"

That was an argument Brown and her colleagues could bring to management. Which was useful, because while the company's management supported employee recognition programs, the impetus to review Siemens' recognition programs didn't come from the top. At that time, Brown says, Siemens worldwide was structured as a conglomeration of a dozen independently operated businesses in fields as diverse as medical technology, power transmission, and industrial automation systems. But it was starting the process of reorganizing into what the company is today - four businesses: energy, healthcare, industry, and infrastructure and cities, employing some 360,000 worldwide.

"At that time, any kind of collaborative effort was just an informal arrangement," Brown says. "The compensation team was not a team at that time, they were independent departments. There was no mandate or authority. We did it because we thought it was in the best interest of the organization and the best way to either save resources or piggyback on each others' best practices."

Because of the complexity of the task and the informality of the working group, it was not a quick process. But the program Brown's compensation group - which is a cross-division team - created with the help of New York-based Madison Performance Group has proven popular with managers and, after two years, coincides with a substantial improvement in Siemens' employee engagement and retention survey scores.

Here's how Brown and her team transformed an employee recognition strategy from a Tower of Babel into one strong voice.

Defining The Goals
The biggest problem Brown and her group encountered was setting goals for a program that covers many different, independent divisions that have goals that don't always match.

"I laugh about it taking six or seven years to do," Brown says. "It wasn't the internal roll-out, it wasn't the build. It was trying to get 12 different groups to consolidate."

In fact, she says, her group originally considered building a back-end umbrella program that would accommodate completely separate divisional engagement programs. But in the end, she says, "We said , 'We're looking to the Siemens values and results.' Being results-oriented in our water technology business might look and feel and sound different than in our energy business, but it's still the same outcome. And our coaching text could cover each group. We needed our tool to be high level enough to embrace all the differences."

To accomplish this, the Siemens recognition program had to revolve around the company's three main values: responsible, excellent, and innovative, Brown says. "Responsible means committed to ethical and responsible action, excellence in terms of result and performance, and innovative, just to continually create value," she says.

That was the right decision, says Michelle Pokorny, vice president of engagement and recognition solutions at St. Louis-based Maritz Motivation Solutions. "That tight alignment and shared sense of purpose in the company comes from a consolidated and consistent employee recognition program. Regardless of where you are, what division or what your role is inside the company, there's a set of values and behaviors that everybody knows is important to delivering on the brand promise and to accomplishing the goals. Having alignment around the things that are important to create the brand promise delivery, is really where recognition and engagement programs can play a huge role."

The fact that Siemens' global leadership was taking the entire company in that direction at around the same time helped the new recognition program get off the ground. As the company reorganized itself into the four, more centrally controlled, divisions it has today, Siemens was rolling out a major branding campaign called Siemens Answers, in which it positioned itself and the products and services it offers as the answer to a variety of different problems, in fields as varied as urban planning and medical diagnostics.

That ongoing ad campaign ended up giving Brown's recognition program its name. "We thought, 'If Siemens has the answers, what are our employees? They are the ones getting the answers.' So we brainstormed and came up with You Answered. I think the most amazing thing about our program is our connection to the external brand. I think it really brought everything together."

It also gave the employees a "way to take those values and translate them into behaviors that individual employees can relate to and learn from," says Mike Ryan, senior vice president of marketing and client strategy for Madison Performance Group, who has worked closely with Brown on the You Answered program for about four years. "I think that really created a very cohesive message for the employees in terms of their role within that value proposition."

A Simple Plan
From the user's perspective, the You Answered recognition program Siemens Corporation created is very simple: When an employee does something above and beyond that furthers one of the three values, a manager doles out praise and a branded American Express gift card worth $25 to $500. For actions with an exceptionally large impact on the company, larger cash awards are available.

But creating a simple recognition program for a large and complex company like Siemens is a complex task, says Ryan, whose firm built Siemens' You Answered program on its Imagine recognition and reward platform.

"You want the process to be intuitive and seamless for managers," Ryan says. "If a manager wants to give an award, there shouldn't be this complex algorithm they go through to make sure that award is properly generated and approved. The system should do it automatically, or they won't do it, or it's going to get hung up in the process. The back end will determine who needs to approve this, if anybody; it'll send reminder emails to people - you've got X amount of awards in your queue; the back end will generate a default approval if it hasn't been handled in a while."

The You Answered interface has just two blanks to fill in: the reason for the award and a personal message to the recipient, as well as drop-down menus for points to be awarded, the company value his or her action furthered, and the result it achieved. "You click through three screens and you're done," Brown says. "I can do an award, as a manager, in less than two minutes. If you build it to be clean, to be intuitive, then they will absolutely embrace it."

One of the big fights Brown had was getting buy-in to streamline the approval process. That required "a lot of work," she recalls. "Some groups, literally every award was being approved by their division head and in other groups [awards] were being approved by their HR rep and that's it. There was anywhere from one level of approval to five or six levels. One of the main philosophies around recognition is to make it immediate and when you have six levels of approval, there is no way it's going to be immediate."

Finally, management has to be able to pull information out of the program, Ryan says. Beyond basics like who's getting awards and where is money being spent, that means "the ability to do 'what if' scenarios in the HR suite," he adds. "If we were to improve performance in one area over another - in other words, shift recognition dollars from one spot to another - what would that do in terms of our overall economics? Can we make a case that recognition does drive the high level of results we're looking for?"

Measuring ROI
The initial results show the work on Siemens' You Answered employee recognition program has been worth it.

Siemens does a broad employee engagement survey every two years, and the most recent results showed engagement was up 3 percent and retention scores went up 5 percent compared to the survey two years ago. That two-year period corresponds with the time that Siemens' You Answered program was fully rolled out and in use. Brown notes that with 60,000 employees, 5 percent equals 3,000 employees who did not seek other jobs. "That translates into much less disruption to the workforce," she says. "There are studies that say there is a clear cost to replace someone - lost opportunity costs, recruiting costs, and training costs - and this translates to real dollars."Then there are the usage numbers. "In our first year, less than five percent of managers used You Answered, because we rolled it out in slow stages," she says. Now fully 85 percent of the company's managers have used the recognition program.
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