Employee Recognition 101: What, Why, How, Best Practices

Timely recognition is the secret to driving employee engagement and retaining top talent. Get all your questions on employee recognition answered in this single article.


min read

Employee recognition has been one of the top tools that most organizations are leveraging to create an empowering and positive work culture to attract and retain top talent. You must have come across at least one discussion over the past couple of years on how your organization needs to develop and implement a robust employee recognition program. 

However, we understand that with several priorities in your mind and limited resources, there might be multiple questions that you would have on employee recognition and the best way to maximize its effectiveness and ROI. 

After working with several fast growing organizations, we have been able to identify some of the tried and tested ways to get started with employee recognition, in a way that is efficient, cost effective and bears incremental results

Here is a detailed guide to help accelerate your rewards and recognition journey. 

Create a culture of recognition and appreciation

The first major question or thought that is likely to strike you is how to create a culture of recognition and appreciation. It goes without saying that if you simply recognize the work of your employees on an ad-hoc basis, there will be no sustained efforts or results. 

It will be a one-off event, leading to no impact on performance, retention or motivation. Therefore, it is important to create a culture of recognition and here are a few steps to achieve the same:

1. Recognize early and regularly

First, your employee recognition efforts need to be in real time and regular in nature. There are two aspects at play here. On one hand, you need to ensure that you recognize and appreciate the performance or efforts of your employees when it is due and not months after, when the cause of appreciation is out of mind. Therefore, you need to ensure early employee recognition. 

On the other hand, you need to be regular in your recognition efforts. Appreciating your employees once every six month is not enough to create a culture of recognition. You need to make recognition a habit, across all levels of the organization.

Pro-tip: Having regular 1:1 check-ins with team members is a quick, easy and cost-effective way to induce a culture of regular recognition. Check out our short guide on how to take your next 1:1 check-in to the next level

2. Be specific 

A culture of recognition and appreciation thrives when you are specific. Simply telling your employees that they did a good job is not enough. Be specific and clear on what they are receiving appreciation and recognition for. 

Whether it is for closing a deal or for improving customer satisfaction, you need to be clear when recognizing efforts and performance. This will help them understand what they are being recognized for, and will further enable them to work towards the same with greater motivation. 

Being specific will also give cue to others on how recognition works best, and, thereby, encourage them to emulate the same.

3. Celebrate effort and intention

If you wish to truly create a culture of recognition and appreciation, you need to recognize every aspect of an employee's work and not focus merely on the results. This includes appreciating the efforts and intention, even if they were unable to achieve the desired results. Creating a culture is all about encouraging others to follow the same, and when you appreciate efforts and intentions, others will too. 

Top 5 Best Practices for Employee Recognition

An idea closely linked to creating a culture of recognition revolves around the best practices. These best practices can help you ensure that your recognition culture grows and thrives effectively. 

1. Have a clear recognition program

As one of the best practices for employee recognition, it is important to have a very clear recognition program. There are several aspects to this. 

First, you need to align on what the objectives of your recognition program are or what you seek to achieve by focusing on employee recognition. It could be a combination of results like increased sense of belongingness, better performance, greater satisfaction, higher engagement etc. 

Second, you need to be clear on what kind of behaviors will be rewarded and recognized. You can define these behaviors based on the culture or practices that you seek to establish in the organization. For instance, if you feel that your employees are not as responsible as you would like them to be, recognize accountability. 

Other factors that you need to decide on include the frequency of recognition as well as who should recognize, leaders vs peers. Having these bases covered will ensure that you have a robust employee recognition program. 

2. Experiment with different types of rewards

Next, you must ensure that your employee recognition efforts are actually bearing fruits, you need to experiment with different types of rewards and ways of appreciation. While in some situations a pat on the back can go a long way, others might require public appreciation or a combination of incentives and rewards along with recognition. 

However, don’t be afraid of using recognition and reward ideas like a day off, or a gift voucher. They can be as effective as any other form of recognition. It is important to play along with a bit of variety to make the experience of being recognized fun and exciting. 

3. Make it personal

One of the best practices that has had a high success rate for almost all organizations has been the ability to make recognition personal. You need to understand that you are recognizing a human being for their efforts and that requires personalization. 

Instead of sending out the same gratitude message to all, make each message personal and highlight how you appreciate their individual contribution and performance alongside team effort. 

Having a standard template for recognition looks more of a tick in the box and does not express any genuine or authentic effort for employee recognition. Invariably, you will be unable to achieve your desired result. Therefore, make each instance of recognition personal and customized to employee performance. 

4. Recognize everyday

When you seek to learn about the best practices for employee recognition, you need to understand that confining recognition to celebrate only the big wins is not enough. You need to recognize the everyday small wins for your employees and make them feel motivated at all times. 

The idea is to celebrate small wins like checking all points in a task list. All great leaders know that recognizing efforts everyday will act as a motivator for employees to outperform themselves everyday and give in their best, because they know their efforts and contribution are always appreciated. 

5. Recognize even when times are slow

Finally, don’t save recognition only for the good and happy days. To make the most of your employee recognition program, it is crucial to appreciate efforts even when times are slow. For instance, if your team has been putting 12 hour long days for a deal and the deal doesn’t come through, you still need to appreciate the effort that went into the preparation. 

The idea here is not to completely dismiss what happened and celebrate despite being in a backstep when it comes to organizational success. But, it is important to motivate the team to perform better when the next opportunity comes along and avoid the fear of failure as well as prevent self doubt. 

Role of qualitative vs. quantitative recognition

A key component for employee recognition is to gauge performance review and evaluation effectively. That is what forms the basis for quantitative vs qualitative evaluation and consequently recognition. 

  • Quantitative evaluation refers to gauging the level of performance numerically in terms of deals closed or targets achieved. They have a clear goal, achievement of which turns to recognition. 
  • Whereas, qualitative evaluation is ideal for roles which have a more abstract outlook, especially the ones which come from a creative side. Qualitative employee evaluation is also useful to gauge employee behaviors.

Based on the type of evaluation, you can leverage different ways of recognizing your employees. These can include bonuses, praises, written notes, etc. You can leverage quantitative recognition when you wish to appreciate their achievements from a quantity or volume of work lens. However, leverage qualitative recognition when you are truly impressed by the quality of work your employees have been able to turn around or the kind of energy and enthusiasm they bring to the team.

What is the difference between recognition and rewards?

Many hyper growth organizations face a lot of confusion when it comes to understanding the relationship between rewards and recognition. There is often a question if there is a connection between the two and if one should take precedence over the other. 

For a simple understanding, you must look at recognition and rewards and intrinsically linked. If you look closely, recognition is relational in nature, while rewards are transactional. While rewards are tangible and constitute gifts, bonuses, vouchers etc., recognition is an intangible form where the work of an employee is appreciated by calling out their accomplishments and the like.

If you are wondering if you can replace one for the other, you need to think again. Both of them play a different and equally important role in advancing the cause of employee retention and satisfaction. 

While rewards are materially driven and become an important incentive and source of motivation for employees, recognition helps in employees believing that their efforts and contribution are being valued, even if it doesn’t translate to tangible rewards every time. 

For a more comprehensive understanding, you may want to see rewards as a way of recognizing employee performance which is less frequent and comes with an attached cost of realization. 

Whereas, recognition can be more frequent and does not necessarily require resources and investments. All that is needed are words of gratitude and a genuine willingness to appreciate efforts. 

Top 7 career milestones for employee recognition

As a fast growing organization, you will have many employees who will be celebrating key milestones in their professional life for the first time when working with you. It is extremely important to celebrate such career milestones from an employee recognition lens to create a greater sense of belongingness. 

We believe that the top 7 milestones can be divided into two major segments. The first ones include those which are more common and are generally considered to be more important, like:

1. Work anniversary

Celebrating the day when employees complete a tenure or a year and more with your organization to recognize their efforts and contribution. 

2. Landing first big deal

Recognizing the hard work and commitment of your team members when they accomplish a major target in their functional area which has large scale positive impact for the organization.

3. Promotion and appraisal

Celebrating promotion and appraisal for your team members. Here employee recognition comes in the form of appreciating their performance and congratulating them as they move up in the professional ladder of success. 

4. Retirement

Finally, the last of the most common career milestones for employee recognition is retirement. Here you can express gratitude and appreciate your employees for all they have done for the organization throughout their journey. 

While these are some of the common career milestones that you take into consideration as a part of your employee recognition framework, there are a few others too which may not be as prominent, but are equally important. These milestones deserve equal recognition and celebration to boost employee morale and encourage efforts and perseverance.

5. Meeting goals

Celebrate and practice employee recognition when your team members are able to meet their weekly or daily goals. A simple email or words of appreciation can go a long way to help employees strive harder for their goals. 

6. Sharing insights and knowledge

You must focus on employee recognition when your team members go out of their way to share insights and knowledge with others in the team. This will help expand the overall capabilities and competencies of the team and encourage others to contribute towards collective growth.

7. Mentoring peers

This is an important career milestone that you must recognize. Your employees deserve due credit if they make a genuine effort to mentor their peers and those who are new to the organization. If they are trying hard to help others navigate through the challenges they faced, they definitely deserve recognition and celebration of an important milestone. 

How to implement an effective employee recognition program?

Many growth stage organizations today struggle with getting started with the whole employee recognition journey. While we have talked at length about how to create a culture of recognition and the best practices you can follow, we have also captured here a few tips to commence your journey in a way that is destined for success. 

1. Get leadership buy-in

You need to start your employee recognition journey by ensuring leadership buy-in. This involves creating a business case for employee recognition and convincing those on top about how it has the potential to make a business impact. 

Back your pitch with evidence and data points and make a clear pitch around the return on investment. Leverage metrics like greater retention, increased productivity, etc. and how each one impacts the bottom line. 

2. Have a clear criteria

Once your leadership is aligned on the entire employee recognition agenda, you need to be clear on what recognition means to you. Furthermore, other factors like on what basis and how will recognize employee efforts need to be brainstormed and documented for effective implementation. 

3. Explore different ways of recognition that fall in your budget

There may be several ways to facilitate employee recognition including some of the most extravagant ones like a foreign trip. However, you need to identify ways of recognition that best suit your budget. Dig deep and you will be able to find many ways to recognize employee efforts which come with no attached cost and have the potential to create large scale impact. 

4. Include employee voices

As a fast growing organization, while setting up the employee recognition program, you have the golden opportunity to include the voices of your employees. You can ask your employees what ideal recognition looks to them and incorporate those ideas when devising your program. This will ensure that your employee recognition efforts are accepted and appreciated by the employees and they will actually be able to drive performance and results. 

PRO-TIP — Conduct a quick survey to get insights into how your employees want to be recognized. Click here

5. Collaborate with external partners

Finally, as you may have multiple priorities to take care of and limited expertise in the area, it might be a good idea to collaborate with partners like SuperBeings. 

What features to look for in an employee recognition platform?

Taking cue from the point above, to accelerate your employee recognition efforts, you can collaborate with external platforms, especially if you have limited time and resources at hand. 

Most high-performing organizations believe that leveraging the services of employee recognition platforms has enabled them to create a culture of recognition effectively. However, if you plan to go with a platform, you need to check for the following features:

  • Does it offer real time employee insights for recognition?
  • Does it align OKRs with recognition based on performance?
  • Does it enable your managers to have 1:1 recognition conversations effectively?
  • Does it provide you with industry insights and best practices for recognition?
  • Does it help you gauge employee pulse to refine your recognition efforts?

If you are looking for an employee recognition platform that takes care of all these and much more, you need to collaborate with SuperBeings. It can help you ensure a consistent and regular approach to employee recognition coupled with OKR alignment and guided templates for your managers for effective 1:1 conversations. Click here to book a free demo.

How to align your DEI initiatives with recognition for workplace success?

In recent times, organizations have seen a lot of focus being diverted towards fairness and inclusivity in the workplace, which takes into account recognition as well. Here are a few ways to ensure that all your recognition efforts promote inclusivity: 

1. Have a diverse criteria

Don’t have a narrow or a single criteria for recognition. Be open to recognizing different efforts and achievements. Have unique criteria for each team to ensure that you are recognizing employees based on what they bring to the table and not on the basis of a standardized approach. 

2. Emphasize on inclusive rewards

While your criteria needs to be diverse, your rewards and ways of recognition need to be inclusive. Ensure that the way your recognition messages are worded do not exclude anyone in the team. Similarly, your rewards should be such that can be utilized or enjoyed by everyone and not limited to a particular group. 

3. Leverage technology for performance review

To promote inclusivity, you need to ensure that your review is fair and unbiased. Here, you can use performance management tools like SuperBeings to get a real time picture of performance which can help you eliminate recency bias or horns/halo effect and recognize and reward holistic performance based on continuous review and feedback. 

PRO-TIP — Are you looking for the perfect performance review tool that suits your needs? This quick guide will help you to find one.

What role does technology play in effective and fair recognition?

As mentioned in the point above, technology can play an integral role in ensuring that employee recognition is effective and fair. 

If we look closely, recognition is based on performance reviews and feedback. However, these reviews can be vulnerable to recency effects in which only the events closest to the review are taken into consideration. Similarly, reviews can be clouded by the halo or horns bias where one positive or negative feedback becomes the base on which the employee is reviewed. Invariably, these biases prevent fair recognition. 

Fortunately, technology can play a major role in preventing the same. On one hand, technology is unbiased and can help provide a true picture of the employee’s performance. On the other hand, it can help you capture performance and effort in real time with a continuous lens to ensure that single instances or events don’t cloud recognition in the long run.

Efforts vs Results: The Best Approach for Recognition

If you feel confused whether you should be recognizing efforts or results, you are not alone. However, replacing one at the cost of the other can be detrimental. Undoubtedly, you need to recognize results, but recognizing and appreciating efforts is equally important because of the following reasons:

1. Motivates employees

It encourages them to keep trying and striving for excellence and enables them to believe that their contribution is being valued. 

2. Promotes innovation and risk taking

Employee recognition of efforts encourages them to take risks and unlock innovation rather than follow the same path for results every time, which will eventually lead to growth stagnation.

3. Facilitates engagement and a positive experience

Finally, it will create a positive experience for employees where they see recognition of efforts as an empowering environment for growth and development, reducing voluntary attrition. 

3 common problems with employee recognition programs

It would be an overstatement to say that the path to building a culture of employee recognition is one without challenges and struggles. Here are a few challenges that you might face along the way:

1. Inconsistency

Due to other pressing priorities, you might find yourself unable to maintain consistency in recognizing employee efforts. This will lead to an ad-hoc mechanism, which will not reap sustained and scalable impact. 

To facilitate consistency, you can collaborate with a platform like SuperBeings which will help you recognize employee efforts on time and ensure that you don’t miss any accomplishment that deserves celebration. 

2. Lack of authenticity

Sometimes, your managers or leaders might recognize employee efforts just for the sake of it, devoid of any authenticity. Employees are generally able to recognize the lack of authenticity and such recognition will backfire as a simple tick in the box. The best way to navigate through this challenge is to invest in the training of your managers on key leadership competencies to enable them to lead and recognize authentically. 

3. Inability to communicate effectively

At times, you might have the right motivation, but the inability to communicate your recognition and appreciation effectively can impact the whole situation adversely. Here, you need the right guidance and templates to sail through the conversations in an effective manner.

If you want to avoid these challenges and effectively implement the best practices for employee recognition, book a free demo with SuperBeings today. As a one stop platform for all people management needs, we can help you take your recognition game to the next level.  

Sudeshna Roy

Marketing, SuperBeings

Hi There! I am Sudeshna. At SuperBeings, I lead our content strategy to bring you the best and latest on everything related to people management

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How to strategically align compensation and performance management?

The right compensation management practices and policies can make or break your employee experience. Of course, there is merit in linking compensation and performance to drive organizational success, it can lead to several questions and implementation problems as well. 

Read on to get all your compensation management related questions answered.

Why is fair compensation important?

Let’s start with the very basic question of why fair compensation is important and the merits it brings along. It is no surprise that if you are paid more and are compensated according to your efforts, you are likely to give in your 100% and stay with an organization longer. However, there are other factors that support fair compensation:

  • Reduce the risk of turnover: 50% employees are more likely to leave if they believe they are paid below market
  • Retain high-potential performers: High-potential talent brings 91% more value to an organization
  • Increase job satisfaction: Compensation/pay and benefits are 2 of the top 3 drivers of job satisfaction 

Thus, fair compensation as a part of compensation linked performance management has the potential to facilitate better employee outcomes such as engagement, experience and performance. 

Should compensation be tied to performance reviews?

To make compensation fair and inclusive in all aspects, it needs to have a clear foundation. Most organizations have relied on performance reviews as a way of reflecting on performance as a means of compensation decisions. However, there are several competing views both for and against tying compensation to performance reviews. 

Benefits of tying compensation and performance reviews

  • Compensation can act as a great motivator for employees to perform well, which can be reflected in their performance reviews
  • Enable employees to get a clear understanding of what rewards or recognition they get with an increasing level of performance
  • Give employees the opportunity to see the direct value of their performance in tangible ways
  • At an organizational level, it helps to align inputs (compensation) with outputs (performance), enabling efficient resource allocation
  • Ensure that compensation hikes and appraisals are seen as transparent and not arbitrary

Pitfalls of tying compensation and performance reviews

  • It focuses on only those aspects of performance which are under review and not the overall and subtler forms of organizational contribution for employees
  • Performance linked compensation system leads to employees giving themselves  more lenient ratings during self reflection during 360 performance review. Thus, driving the focus away from self reflection as a development practice
  • Biased peer review can also prevent fair compensation, especially when the departmental budgets are limited
  • Sometimes, it creates a blame oriented workplace culture and discourages collaborative problem resolution

Clearly, there are both sides to the story.

The most favorable outcome will be to keep performance as one of the parameters for compensation, but not the sole foundation.

Additionally, as one of the best practices, performance reviews can be conducted on a regular basis, where some are only developmental in nature and others can be tied to compensation management. 

5 compensation best practices today

As discussed, focusing only on performance reviews for compensation management needs a relook. Working with growing organizations, we have curated a list of the top five performance and compensation management practices you can leverage:

1. Keep up with market trends

Ensure that your compensation structure aligns with the market trends so your employees don’t feel underpaid and leave.

  • Conduct a dipstick survey to understand appropriate pay scales
  • Keep your pay structures updated based on market corrections
  • Leverage custom employee pulse surveys to regularly to check their perception on compensation according to market trends

2. Be clear about relationship between performance and compensation

Provide complete transparency and clarity to your employees on what constitutes high levels of performance and what it will take to earn a raise or appraisal.

  • Highlight specific job competencies that link compensation and performance management
  • Don’t rely completely on performance reviews as a means to determine compensation, let them be developmental in nature
  • Gauge performance against pre defined competencies over time

3. Have well defined criteria

Have specific, well defined and measurable criteria for the compensation strategy to ensure that there is complete transparency. 

  • Develop or choose metrics which are easy to comprehend
  • Try to quantify the value for each criteria, including years of experience, education, etc.
  • Account for difference in compensation based on skills, performance levels, among others

4. Communicate benefits effectively

Salary in hand or the pay check your employees receive is accompanied by a range of benefits that are a part of the compensation structure and cost to the company, but are often overlooked by employees. Make sure they are widely communicated.

  • Create a list of all benefits offered to employees and communicate to them via different ways, email, discussion sessions, etc.
  • Be vocal about the value these benefits are able to add over and above their monetary value
  • Illustrate how these benefits also act as tax saving options at times, leading to a more efficient compensation structure

5. Have a standard pay range

Ensure that there is a base pay range for every role and profile with variable additions based on candidate competencies.

  • Have clear guidelines and pay range for each position to set the right expectations
  • Illustrate the competencies/parameters based on which deviation from standard pay range will be acceptable
  • Have a well defined strategy to evolve the pay range and support employee transition from one range to another

How to ensure distributive justice?

The idea of fair compensation and linking compensation and performance management, leads to a very interesting concept of distributive justice. On a broad level, distributive justice essentially focuses on ensuring that the compensation received by employees is fair and equitable and is based on objective and rational grounds which are uniform for all. Here are a few ways to ensure distributive justice:

  • Be transparent about the criteria for compensation and what constitutes as parameters for raise
  • Ensure that measuring of performance/ other criteria for performance is bias free and doesn’t fall prey to halo, horns or recency effect
Measure potential and market value of the employee in addition to experience and expertise to ensure distributive justice for high potential employees 
  • Be fair in your compensation and appraisal assessment

Pay transparency: Merits and demerits

Another interesting component of compensation and performance management that you must acquaint yourself with is pay transparency. Essentially pay transparency refers to how openly or freely employees within an organization can discuss their compensation with others. 

This is not only limited to the check they take home but other perks and benefits they are entitled to. Invariably, many platforms today also enable individuals to anonymously share their salaries online and get insights from others doing the same. However, there are diverse views on when it comes to pay transparency for an organization. 

Merits of pay transparency

Those who advocate for pay transparency believe that it can enable large scale impact for the organization across performance management.

  • Meet employee expectations, build greater trust and augment engagement and overall experience
  • Attract the best talent by showcasing competitive compensation at market standards
  • Reduce chances of biases in salary negotiations and increments
  • Ensure fair compensation and distributive justice among employees
  • Greater employee motivation leading to better organizational outcomes
  • Fewer negotiations allowing employees to focus on adding value to their work

Demerits of pay transparency

However, there is a flip side to pay transparency too with some common pitfalls that need to be addressed proactively.

  • Risk of resentment and conflict if pay scale is not uniform and balanced
  • May lead to comparison of pay scales among peers in the organization with possible backfire
  • Requires strategic planning and meticulous implementation
  • May lead to high levels of turnover in case employees feel they are paid less than what they deserve, in comparison to others
  • Employees might have privacy concerns about their salary being shared with others

How to guide managers to have better compensation conversations?

In the last section of this article, we will focus on how managers play an integral role in compensation and performance management and the best practices to guide managers to have effective compensation conversations with their team members.

Almost 58% organizations do not train managers on pay communications 

This startling statistic clearly highlights how despite the apparent importance of compensation management, the focus on ensuring a seamless process is rather limited. However, organizations today can play a leading role in enabling their managers to have better pay communication and conversations by following these tips:

  • Create a communication toolkit with all the resources including compensation structure, criteria, performance linkage, etc. and share it with all the managers 
  • Conduct regular surveys to gauge employee pulse and data from employees on their compensation and share insights with managers to help create a conversation flow
  • Leverage tools for NLP led sentiment analysis of open ended responses and share guided 1:1 conversation templates for effective compensation conversations
  • Encourage managers to keep compensation conversations and performance reviews as separate
  • Give proper context, especially during an appraisal or raise, with both internal and external factors that led to the compensation decision
  • Communicate the value and importance of the employee to the organization, don’t rely on numbers and monetary increase do all the talking
  • Prepare for the conversation and be prepared for response, be an active listener and patiently address grievances, if any

Final Thoughts

It is quite evident that compensation and performance management are intrinsically interlinked and if leveraged well, compensation has great potential to not only drive performance, but also facilitate engagement, retention and much more.

However, to ensure the same, you need to have a very structured, transparent and fair compensation strategy and policy. Furthermore, you must, don’t forget to invest in training your managers to bridge any gaps and constantly gauge and address employee pulse — to ensure fair compensation for all.

Suggested Reading

10 tips for managers to effectively conduct performance reviews

How often should you conduct performance reviews?

How to use competency framework as a talent management strategy

min read

How to Use Competency Framework for Talent Development

Talent development is critical for growing organizations which see the workforce as their biggest asset. Focus on developing their talent stack not only leads to a pleasant employee experience, it also augments the overall performance and productivity for an organization. 

While you may come across many ways to facilitate talent development, leveraging the competency framework can help you move the needle very quickly. 

Let's see how.

5 Stages in talent development

Before moving directly to how you can implement the competency framework, let’s quickly understand the 5 stages of talent development.

1. Planning

The first stage involves planning for your talent needs based on your organizational priorities and creating the position profile based on the skills, attitudes and other competencies. 

2. Identifying

Based on the position profile, you need to start attracting talent for the position. You can do so by spreading the word in the right networks, through job portal platforms, etc. The objective is to ensure that you are reaching out to the right network. You can also explore the right candidate for the position internally to considerably save hiring and training costs. 

3. Onboarding

Once you have identified the right person, the next stage of talent development is extending the offer to the person after a thorough background check as well as a competency and expectation match. It also requires creating personalized onboarding plans for the first 30-60-90 days of the candidate’s journey within the organization. Read our guide to employee onboarding to learn more about onboarding do’s and don’ts.

4. Developing

The main focus of talent development starts with providing the right development and learning opportunities to your workforce. This can involve upskilling for both technical and soft skills, leadership building or any development intervention based on the need of the role and position. 

Read: How to create employee development plan based on performance history

5. Retaining

Finally, talent development involves undertaking initiatives to retain your talent. While learning opportunities are important, facilitating engagement, wellness, motivation, etc. all contribute to employee retention. 

What is the competency framework?

If you are wondering how the competency framework aligns with talent development, you need to start by decoding what the framework actually stands for. 

Put simply, a competency framework is a set of behaviors, skills, abilities and attributes that an organization considers imperative for creating a high performance culture. 

The competency framework can be implemented at all stages of the talent development or the employee lifecycle within an organization. The idea is to ensure that certain core competencies are kept at the heart of the decision making that in any way impact the workforce. 

Importance of talent development for employee retention

Competency framework based talent development is very important for employee retention. Talent development practices when undertaken effectively have the potential to encourage team members to stay with the organization for long and at the same time become ambassadors to help attract high quality peers. 

Here are the top reasons why competency framework based talent development matters:

  • Recruit the right person for the right job
  • Provide the right learning and development opportunities
  • Be an active participant in professional growth for employees
  • Train and develop employees for professional obstacles
  • Enable employees to navigate through challenges with mentoring support
  • Enable employees to see a clear career growth path within the organization

Implementing the competency framework: Process, steps and ownership

Now that we have covered the basics of talent development and competency framework, let’s understand how leveraging the latter to advance the former can create a far reaching impact for organizations. 

Step I: Create a competency framework

The first step is to create a competency framework which involves identifying the key competencies which will be instrumental in guiding all decisions around talent development. Depending on the nature of your organization, there can be categories within the competency framework that you seek to focus on. Your competency framework should focus on behaviors, skills and attributes which are critical for performance and overall success. The following steps can help you create a competency framework for talent development:

1. Identify key competencies

  • Establish core competencies that are required to be possessed by everyone in the organization, for instance, teamwork or collaboration
  • Highlight the functional competencies that are required for specific roles and positions, for instance, situational awareness and the ability to think on one’s feet for those in business development roles
  • Identify competencies that align with your core values and are non negotiable, for instance, if your core value revolves around innovation and experimentation, a key competency will be a risk taking attitude

2. Determine behaviors and attributes

  • Define the key parameters for each identified competency i.e. what are the factors that collectively contribute to presence or absence of that competency
  • Establish metrics to judge the level of competency alignment across the workforce and identify the gaps

3. Link to organizational goals

  • Create a business statement of how the competencies can advance overarching organizational goals
  • Focus on the value add they bring along for organizational success
The responsibility of creating the competency framework is collective. It starts with involving the executive leadership to ensure alignment with the vision, people managers to ensure they are ideal for the culture you are trying to build and functional managers to ensure inclusion of right competencies for each role and position. Furthermore, involving those on the ground can be fruitful as they have the best idea of what competencies are critical and others which are good to have. 

Step II: Align the competency framework with recruitment

Once the competency framework for talent development is ready, the next step is to align it with your recruitment process to ensure precise and effective hiring. There are a few steps along the way:

  • Mention the keywords from the competency framework in your position profile or job description
  • Specifically identify 5-7 key competencies for each role important for high level of performance
  • Identify behaviors for each competency to look out for during the selection process
  • Leverage psychometric assessments customized with your competency framework to test your candidates
  • Conduct competency based interviews and assignments for a comprehensive view
  • If there is a significant competency match, identify gaps if any for competency based development later
  • Document results to align performance management for selected candidates
The onus of implementing the competency framework during selection lies primarily with the HR team and recruiters who assess the candidates with different tests and assessments. Team managers and leaders also play a role in assessing functional competencies and fit. 

Step III: Facilitate competency based performance management and development opportunities

Irrespective of whether an employee is onboarded before or after you have implemented the competency framework for recruitment, you need to ensure competency based performance management and development opportunities. 

Performance management

  • Align OKRs and goals with competencies; focus on behaviors that can help drive the key results. For instance if a key result is expand to 5 new markets, a key competency can be adaptability
  • Conduct competency based 360 feedback review; encourage your managers to review performance not just on outcomes but presence or absence of competencies that made the outcomes possible
  • Encourage competency based self reflection for employees to assess their performance based on the competency framework
  • Identify development areas based on competency needs for particular roles as well as the next career path in the trajectory
  • Reward competency based performance and outcomes
  • Measure competencies on an ongoing basis and compare results with recruitment analysis

Talent development interventions

  • Define competency gaps for each position and identify talent development interventions to bridge the same. For instance, if communication is a key competency for a sales role, learning can be oriented towards better communication skills
  • Align developmental interventions with competency based OKRs
  • Identify learning objectives for each role and position and determine how they connect with the competency framework

From a talent development perspective, the focus of the competency framework should equally be on developing employees for their next or subsequent role based on the specific competencies for the same. 

The onus of aligning performance and development with the competency framework lies with team managers as they are best able to determine the performance gaps. Furthermore, employees with their managers can identify competency gaps for better performance and focus on the right learning and development interventions to bridge the same. 

Step IV: Leverage competency framework for succession planning

Finally, the competency framework must also impact the subsequent rungs of talent development where an employee moves up the ladder from one position to the next. Based on the organizational matrix and competencies for each level, you need to identify key attributes that differentiate one level from another and ensure the same is communicated to your employees. 

You should:

  • Help you employees create a career development plan based on your competency framework to help them understand which competencies will enable them to grow
  • Make succession planning a key organizational priority and focus on talent development from that lens

Final Thoughts

In a nutshell, it is quite evident that the competency framework can inform and advance every stage of talent development for fast growing organizations. If you implement such a framework across the employee lifecycle, you will significantly reduce your chances of a wrong hire and will be able to nurture a workforce that aligns on the vision, goals and overall organizational culture. 

A clear competency based talent development approach can help you achieve high levels of performance which is observable and measurable.

min read

Should Your Business Invest in OKR Software? See the ROI

While most people managers are able to create a business case for setting OKRs as well as for the adoption of an OKR software by leveraging industry benchmarks and best practices, there is a need to explicitly decode the return on investment of using an OKR tool as well.

Unless they are able to clearly illustrate how the return achieved using a goal management software is greater than the investment, it becomes difficult to sustain the adoption and get long-term leadership buy-in. 

Continue reading to strengthen your business case on the same.

What’s the ROI of Goal Management using OKRs?

Let’s quickly understand how the OKR framework is integral for an organization, especially high growth companies. Most fast growing organizations have competing priorities they need to focus on with limited resources at hand. 

Therefore, simply setting goals by adopting a top-down approach without supporting parameters can lead to confusion and incompetence. OKRs help drive away this ambiguity by linking measurable key results for each objective and facilitating a collaborative approach to achieving goals.  

Here are the top three benefits of implementing OKRs in an effective manner:

1. Better focus and more clarity

OKRs enable employees and leadership to have a very clear focus on what needs to be accomplished and what work is out of scope. The idea is to have complete clarity on — 

  • what each goal or objective means, 
  • its purpose for the overall success of the organization, and
  • what achieving it will look like. 

The last part is extremely important as it helps create a sharp focus and set priorities straight. 

93% of employees don’t really understand what their organization is trying to accomplish in order to align with their own work.

This illustrates that there is a big absence of clarity and focus amongst employees when it comes to what needs to be accomplished, which stands in the way of creating a high performance culture. Therefore, OKRs can help reduce such uncertainty and ambiguity, making it easy for the workforce to concentrate on what matters. 

2. Strategic alignment

Taking cue from the first point, the second benefit or purpose of implementing OKRs foris a need for clarity of expectations and overall team and organizational alignment. In case of fast growing organizations, there is an overlapping of roles and responsibilities and a lack of clarity on expectations from each employee. This leads to lower than average outcomes, productivity and revenue growth and data backs the same. 

97% of employees and executives believe lack of alignment within a team impacts the outcome of a task or project. Whereas, companies that regularly exceeded revenue goals were 2.3X more likely to report high levels of alignment.

By ensuring organization-wide goal visibility, OKRs help teams to decode what is expected out of each team member and their respective contribution towards achievement of the shared goals. Thus, increasing alignment and collaboration. 

3. Greater engagement

Finally, setting and implementing OKRs is often a collaborative process. Employees get involved in and participate during the entire OKR process and feel engaged in the same. This greater involvement and participation leads to deeper levels of engagement and ownership of key results which drive impact. 

OKRs also enable employees to also gauge their performance and measure their progress in an effective manner. This motivates them to get more involved in achieving the common weekly, quarterly and annual goals. This higher level of engagement directly impacts key organizational parameters such as retention, productivity, profitability, etc. 

How does an OKR software make a difference? 

The business case for OKRs is very clear. However, for companies that are scaling up, with limited bandwidth and competing priorities, often setting OKRs itself gets left behind due to other business priorities.

If an organization focuses on a manual approach to the OKR system, there are several steps which require a lot of time and effort including setting and writing, implementing, tracking, grading, evaluating and modifying OKRs.

Fortunately, today there are OKR tools in the market, which can help automate all of these aspects to help simplify the OKR journey. The right goal management software can help you maximize the realization of the return on investment for your OKRs. Following are the top five ways in which an OKR software makes a measurable difference on the bottomline — 

1. It allows you to document goals

First, an OKR tool can help organizations document or record the OKRs in a way that is visible and accessible to all. There is supporting evidence to show that what gets documented has a higher chance of being achieved, as what is out of sight is often out of mind. 

Individuals are 42% more likely to achieve goals when they are physically recorded.

Therefore, the OKR tool can enable organizations to clearly define the business and team OKRs in a written manner which can be reflected on, seen again and again to create instant recall for employees. 

2. It drives accountability and alignment

OKR tools are great for creating alignment and accountability. On the alignment front, the OKR software can help achieve high levels of strategic alignment on what is the responsibility of each team member across organizations towards the key business goal achievement. 

Highly aligned companies grow revenue 58% faster and are 72% more profitable than their misaligned counterparts.

The dashboard of a good OKR software can help you constantly gauge the level of goal achievement, ensure that team members are aligned on different phases as well as keep a track of when their responsibility is due. It creates high levels of transparency. 

Moreover, greater alignment leads to high levels of accountability. Generally, since there is a lack of alignment on responsibilities, there is an accompanying lack of ownership and accountability, and most employees shirk away from taking accountability. 

84% of the workforce describes itself as “trying but failing” or “avoiding” accountability, even when employees know what to fix.

A goal management software like SuperBeings allows you to integrate OKRs with regular meetings and check-ins to keep track of progress. Thus, driving a culture of accountability.

3. It enables real-time OKR progress and goal tracking

It is very common for companies to set OKRs and then evaluate them only at the end of the quarter/year. There is a lack of mid-term tracking which makes it difficult to gauge whether the progress is aligned with the key results or not. 

40% of people that write down goals don’t check whether they’ve achieved them. Moreover, only 5.9% of companies communicate goals daily. 

An OKR software can help you address this concern by facilitating day-to-day OKR progress tracking. A daily dashboard and history of 1:1 and team check-ins on OKRs, can help organizations track developments over time. 

ROI of OKR software
SuperBeings OKR dashboard helps you get a quick overview on all primary goals

It can also help identify and resolve any performance issues that stand in the way of goal achievement preemptively. At the same time, even if organizations are tracking and monitoring OKR progress, doing so with a manual process is inefficient. An OKR tool can automate most of these processes to enable HR and people managers to spend more time on driving results. 

4. An effective software offers OKR training for success

Another major concern that organizations face when it comes to OKRs is being prepared and ready for the same. Many line managers and others struggle with writing effective OKRs. Many organizations believe setting OKRs once is enough. However, that is far from the truth. 

Research says, companies that set performance goals quarterly can generate 31% more returns than those reassessing annually.

Using an OKR software can help eliminate all these challenges. 

  • First, the right tool will offer OKR coaching and onboarding support to train managers to write OKRs which are effective and result oriented.
  • Second, it can help reflect on OKRs at regular intervals to realign on them and adjust according to changing market conditions. 
  • Third, the OKR tool can help managers have meaningful 1:1 conversations with team members to link OKR with performance and facilitate high levels of goal achievement. This is a direct return on investment which can create value across the organizational verticals.  

5. It facilitates greater collaboration

Finally, an OKR software can promote high levels of collaboration for goal achievement. For many organizations, the inability to collaborate leads to low levels of results, diminishing the ROI for OKRs.

86% of employees and executives cite lack of collaboration or ineffective communication for workplace failures.

Using a good OKR software makes collaboration seamless by aligning cross-functional projects and tracking cumulative progress. Invariably, an increase in degree of collaboration is a direct ROI of an OKR tool which can create far reaching impact.

How to calculate the ROI of an OKR software?

In this final section of the article, we will talk about the key parameters that can help you gauge the ROI of an OKR software. While the above mentioned are primary impact areas, most of them have a qualitative aspect to them. 

Gauging the ROI requires backing of data points from employee experience and business results, which the following parameters can help explain.

1. Level of transparency

Organizations should start by gauging whether or not transparency and alignment on goals has increased. This can be measured using employee pulse surveys to understand their opinion on how well they have visibility of goals and clarity on what they need to work towards. Therefore, the first ROI parameter for an OKR software is to identify the increase in level of transparency to ensure everyone is working in the same direction and there are no gaps or overlap in efforts. 

2. Degree and time period of goal achievement

The main purpose of an OKR tool is to facilitate the effective and efficient achievement of the goals set by an organization. Thus, the next parameter to measure ROI should revolve around the degree and time period of goal achievement. 

You can start by comparing the degree of goal achievement by leveraging OKR grading to see if there is a significant improvement in percentage terms as compared to pre-OKR tool period. Second, it is important to gauge whether or not the goals/key results have been achieved in a shorter period of time or not. Since the OKR platform facilitates better alignment, collaboration, tracking, etc., it can help organizations achieve or realize the goals faster. 

3. Reduced administrative overheads

Third, there are several administrative overheads that accompany the setting and implementation of goals/OKRs. These include tracking, grading, etc. for managers and providing inputs on the part of employees. The ROI of an OKR software can be gauged by mapping whether or not these overheads come down. 

  • For the managers, ROI can be calculated in terms of time saved which can be invested in other value add tasks. 
  • For employees, the ROI comes in the form of reduced time and effort spent in juggling between platforms to work on goals and projects. The right tool will provide organizations with integrations across top productivity tools like Slack, Jira, etc. which reduce administrative overheads for all organizational stakeholders. 

4. Increased revenue

The next parameter for ROI calculation is to measure the change or increase in revenue after the adoption of an OKR software. Since an OKR tool seeks to enable organizations to achieve their goals faster, cost effectively and to a greater extent, there should be an increase in the revenue realized. 

According to Larry Page, co-founder, Google claims that “OKRs have helped lead us to 10X growth, many times over.” 

5. Better employee experience

Finally, gauging the value of employee parameters like retention/turnover, productivity, engagement, etc, can cumulatively be leveraged to capture the ROI of an OKR tool. There are several ways to gauge these workforce parameters, along with factors like eNPS, etc. which have a direct business impact. Calculating them can help measure the ROI of the OKR tool for an organization. 

Final Thoughts

It is evident that adoption of an intelligent OKR software is not only good to have, but integral for organizational success. Using the right tool has a direct business impact which can be measured in numbers using the ROI parameters mentioned in this article. 

There are both qualitative and quantitative aspects to measuring the ROI and a balanced approach to both can empower organizations to align individual performance with business goals.

If you are considering implementing the right OKR software in your business, try out SuperBeings free 21 day trial. Book today. (No credit card or commitment required)

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