2016 Buyer’s Guide for Social Recognition Systems

Table of Contents PICKING A PARTNER

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CHOOSING THE RIGHT PLATFORM FOR YOU

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DESIGNING YOUR UNIQUE PROGRAM TO GET EVERYTHING YOU NEED

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WILL YOUR EMPLOYEES LOVE IT?

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REALIZE POTENTIAL: THE FUTURE IS NOW

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Employee recognition — done right — is today’s must-have for business. From major reductions in voluntary turnover, to dramatic increases in business results, to leaps forward in employee engagement and customer satisfaction, employee recognition enables the organization to “have it all.” The case is clear: Employee recognition can drive business outcomes, both directly by targeting specific behaviors that achieve business objectives, as well as indirectly by fueling employee engagement, improving outcomes across the board. But it’s not a sure thing. To see the return, frequency and high employee adoption are required. Many vendors will explain this fact. Not many can deliver it. Social recognition systems appear on Gartner’s Hype Cycle, climbing the curve to become a standard business system. But how do you choose the right system? It’s a choice that comes with very high stakes. Pick the wrong partner and you not only risk throwing your money to the wind; you could also alienate your entire workforce. Ouch.

Use this guide to understand the factors to consider in evaluating and selecting the right partner for your employee recognition solution.

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2016 BUYER’S GUIDE FOR SOCIAL RECOGNITION SYSTEMS

Despite the fact that recognizing tenure is known to have no impact on improving employee or business outcomes (Garr, Stacia Sherman. “The State of Employee Recognition in 2012.” Bersin & Associates. June 2012.), it remains the most popular approach, with 87 percent of organizations focusing recognition efforts on length of service. At the same time, the vast majority of companies admit they’re seeking to reinforce desired behaviors and motivate high performance (WorldatWork. “Trends in Employee Recognition.” May 2015). The gap is clear: Most organizations are unsure how to use recognition to achieve results.

Picking a partner A platform is only as good as the people who bring it to life. The success of your employee recognition program hinges on the support and expertise your vendor provides. That expertise should be demonstrated by tailoring your program to match your unique business culture and objectives, and evolving it over time as your needs change.

A key question to ask: NPS Without direct personal connection to a company or its customers, how can you evaluate the potential for a fruitful partnership? Vendors will always harp on good customer satisfaction scores. But while it’s comforting to see a fantastic CSAT rating, how it was calculated is a black box. Now, there’s something else to look for. Every good partner makes customer happiness a top priority and gathers feedback in multiple ways. But a recent development in scoring customer satisfaction provides a crystal-clear picture of how well a company is serving its clients. Net Promoter Score® (NPS), created by Fred Reichheld, Bain and Company, and Satmetrix, has become a popular metric for identifying companies offering the best customer experience. It provides a quick, standardized way to access existing customer opinions. The first question is whether a potential vendor is using NPS. If they aren’t, they might not be as committed to customer success as they could be.

Services: You’re not buying a car Buying a recognition system isn’t like buying a car. Advertising helps car buyers picture themselves going beautiful places with beautiful people once they’ve purchased the right vehicle. After the purchase, though, they’re on their own. The buyer uses the car to get places they want to go. If something goes wrong, they pay a visit to the mechanic; they don’t come back and ask for a new set of driving instructions. An employee recognition platform that influences behavior and business outcomes is simply not that type of product. A vendor that invests heavily in a slick sales experience, while promising that the software will work its magic all on its own once you buy, is setting you up for failure. Defining, launching, and maintaining an effective recognition program takes a village. That doesn’t mean it takes a long time to get started, or costs an exorbitant amount to manage and maintain. What it does mean is that driving human behavior in a unique business context requires human

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NET PROMOTER SCORE: HOW DOES IT WORK? NPS measures the difference between a company’s promoters and detractors, with passive customers not counted to avoid artificially inflating the numbers. • Customers respond to a single question: How likely is it that you would recommend Company X to a friend or colleague? Responses are rated on a 0–10 scale. • Responses of 9 or 10 are defined as promoters. 7 and 8 are passives. And 0–6 are detractors. • NPS equals the percentage of promoters minus the percentage of detractors. • Generally speaking, scores above 30 are good, above 50 are great and above 70 are excellent.

Average Net Promoter Score for HR Technology is -31. — Sierra-Cedar. Citation: Martin, Lexy. “CederCrestone 2013–2014 HR Systems Survey Highlights.” Sierra-Cedar. 2013. Web.

involvement to select the right suite of tools, bring the brand to life, and continually evolve and innovate to reflect the changing needs of the culture and business. Evaluating services comes down to approach. As the title of this section suggests, what you want is a partner for the long term. If you select correctly, you’ll see an attitude of openness and collaboration from the outset. From the first interaction, and supported through every subsequent interaction, the team should feel like a group of colleagues, more interested in your success than in your checkbook. Ultimately, your services experience will greatly depend on the performance metrics and compensation models for the people you’ll be working with. How are they evaluated, beyond the billable hours or sales numbers? Customer satisfaction should be at the top of the list.

Recognition plus rewards Back to the beginning — employee recognition is a powerful tool for business. It’s the single greatest lever to drive employee engagement. Therefore, any recognition and rewards vendor should be most interested in ensuring very high adoption and usage. And if that isn’t the aim of a recognition company, they’re in the wrong business without knowing it. Software success is defined by usage: the activity of the users doing the things the software is intended for. For a recognition software company, that’s recognizing. And every additional feature of the software should dovetail with that goal. Although recognition is a focus, employees often appreciate rewards, too. Ideally, your vendor would have a catalog that offers a wide array of employee-pleasing options.

Innovating for tomorrow Your workforce is not static. Neither is your business. Recognition solutions that impact business outcomes and employee engagement for the long term are constantly evolving, anticipating business needs, and responding to changing trends. It’s not just a history of happy customers that defines a good partner. It’s their approach to innovating and their commitment to thought leadership that will carry the solution into the future and deliver the results you need.

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2016 BUYER’S GUIDE FOR SOCIAL RECOGNITION SYSTEMS

IT’S ALL ABOUT YOU There’s no such thing as too many questions. Vendors that know your success is determined by how well they tailor the software and strategy to your specific business context are motivated to answer all of your questions and will ask many of their own.

Your opinion matters. You’re the expert on your business needs and what makes your workforce unique. Leading vendors have rich experience and benchmarks to bring to the table — but recognize that it’s your table.

Choosing the right platform for you Why do you need a platform? Why not just a mobile app? Because most single-purpose applications struggle to drive behavior and engage employees over the long term. Initial interest typically cools off, with few ways to rekindle engagement. And your business misses out on the administrative and program synergies that a platform offers.

Single- or multi-tenant? Single-tenant platforms deploy a version of the software specific to the time and context of your contract. Automatic updates and new tools aren’t part of the picture. Multi-tenant platforms that have every customer on one version of the software are going “all in.” Providing software as a service to hundreds or thousands of customers at the same time (and millions of users around the world) requires high standards in design, development, security, and data management. A multi-tenant approach is like choosing to make every seat on the plane first class. Everyone gets the newest, best version of the software. There’s no curtain to ensure some customers don’t notice the better seats up front. Innovations — or even just small improvements — driven by one customer, segment, or market trend are shared across the entire customer base. The speed of innovation is increased, and customers collectively benefit each time the software evolves.

Security: Certification required In our social, global, 24/7 world, company data represents the body of knowledge that defines an organization’s competitive advantage. If you’ve ever worked with an IT security department, you know how deadly seriously they take this point. And for good reason. Currently, the highest security standard for software providers is ISO 27001. As of October 2015, it’s the only internationally accepted standard that requires an annual three-stage audit. ISO 27001 certification is the hallmark that most IT security teams prefer. Ensuring your selected vendor is ISO-certified will go a long way toward building buy-in from IT security stakeholders, as well as help ease the implementation process — not to mention ensure your company and employee data is completely safe, of course.

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2016 BUYER’S GUIDE FOR SOCIAL RECOGNITION SYSTEMS

Integrations: The flow of data and the flow of work The average company manages seven different HR systems1, plus a growing collection of job-specific software systems. A recognition and rewards platform will be most effective when it communicates easily with both HR data systems and connects with existing employee applications. ANY HRIS Employee data must flow to the platform to maintain accurate workforce and employee profile information, from name and employee ID to service date and job level attributes. Human resources information system (HRIS) employee data is required to set up and maintain correct employee access to the platform. The level of integrity and detail of the HRIS data flowing to the platform defines the depth of reporting and analysis possible with your program’s data. Your specific HRIS should not pose a problem, because most enterprise recognition vendors are HRIS-agnostic, and can even work with proprietary systems if a customized HRIS system is in place. DATA WHERE YOU WANT IT Data flowing from the platform has endless possible uses. Basic requirements, such as employee benefit reporting to payroll, should be automated and configurable to match exact payroll requirements for your company. Beyond administrative use, data can flow into performance evaluation, succession planning, and workforce analytics software. On the front end, platform activity can also be broadcast to visual displays or intranets. KEEP EMPLOYEES IN THE FLOW OF WORK What about the flow of work? Single sign-on (SSO) is extremely valuable for the employee experience and implementing SSO for launch should be standard for any vendor. But there’s more that can be done to keep employees in the flow of work. Recognition can be accessible and integrated within everyday employee applications. For example, email recognition can enable employees to simply “cc:” the platform and send recognition to their colleagues, requiring little or no integration work. Recognition can also be integrated within existing application workflows, such as upon completion of learning modules. Look for a vendor with an open API. It’s the standard format for cross-application integrations and means everyone has the opportunity to create connections based on their specific workflows and business needs. Push out or pull in information to any work application, using performance management systems such as Workday®, or social collaboration tools, including Yammer, Jive, and SharePoint. Integrating recognition with core workplace systems enables you to get more value out of your investment in multiple enterprise software applications.

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1. Bersin, Josh. “HR and Talent Software Vendors Get Into.... Data Management.” September 23 2013. Web

THE FUTURE IS OPEN API stands for “application programming interface.” In everyday terms, an open API can be thought of as the glue that binds enterprise applications together, enabling exchange of information and ondemand access to valuable data and functions. “APIs have been around for many years, but until now have remained a niche interest to programmers. The smartest businesses have worked out that APIs — which used to be technical artifacts — are now hugely valuable strategic business tools. Not only do they enable an organization to make its underlying data and functions available for general use, driving efficiency and agility across the enterprise and partner ecosystem, but they can also be open to developers, both internal and external, who can harness this familiar web-based technology to build new and innovative business uses. “As APIs standardize functionality, they accelerate development — particularly as business moves into cloud, mobile and social. “In other words, an API offers a way to unlock the value of a business’s digital assets and to extend its reach through leveraging the integrations and development across the enterprise, from partners to independent developers. The business can then leverage these relationships to create more and more value from augmenting its key assets. It represents an opportunity to innovate and even to develop brand new business models.” Tung, Teresa; Michael J. Biltz. “APIs can be strategic tools to unlock business value.” Computer Weekly. July 2013. Web. http://www. computerweekly.com/feature/APIs-can-be-strategic-tools-to-unlock-business-value

Mobile: One platform or disparate experiences? It’s not unusual for a recognition product to be entirely mobile with no desktop component. However, access is important. Mobile-only may work in a limited context, but across the organization employees need to be able to seamlessly access the same platform regardless of their device — especially in today’s bring-your-own-device workplace. Mobile is an extension of the experience of the recognition platform, not the platform itself, and any mobile offering should be 100 percent connected to the main system.

HOW DO YOU USE THE MOBILE INTERNET ON YOUR SMARTPHONE?

37% FAVORITE APPS

30% FAVORITE MOBILE WEB

NATIVE APPS AND MOBILE SITES Ultimately, to provide the best possible employee experience, you want to offer the options of native applications for Apple and Android, as well as cross-device accessibility with an HTML5 mobile site. Why? Employees don’t necessarily all use the same technology, and may not want to have yet another app on their phone. They will, however, want to recognize their coworkers, and that should be just as seamless from a phone without an app as any other. HTML5 mobile websites offer employees full mobile-optimized access to their recognition program, regardless of device. And since access is via the internet, there’s no need to constantly update. It’s always up to date.

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2016 BUYER’S GUIDE FOR SOCIAL RECOGNITION SYSTEMS

33% BOTH APPS & WEB

Source: IAB 2014 Apps and Mobile Web Consumer Survey

Be in control: Reporting, budget planning and spend visibility You’ll also need line of sight to see how your reward spend is tracking against your budget targets in real time. Looking back every year (or quarter) provides only a lagging report on how your employee recognition budget was spent. Programs risk going over budget or being under-utilized, leaving investment languishing, instead of making a difference in employee recognition and engagement. Making program investment decisions requires the right data, right away. A complete financial picture would include real-time access to reporting on all program financial activity, including points liability, utilization, and spend. Budget owners should be enabled to take control of program spend and budget targets with self-service access. Full reporting would include filters to analyze spend by program groups, such as organizational unit, location, department, people leaders, and recognition modules. And administration can be easy with features enabling reports to be scheduled, shared, customized, and saved. INTELLIGENT RECOGNITION BUDGETS Approach (and supporting functionality) to recognition program design plays a significant role here. Programs based on driving recognition within a software model have aligned interests with customer goals and respect budgetary constraints from the get-go. These platforms allow the organization to define recognition spend budgets for every employee level. Even front-line employees can be empowered to recognize right away, without any concern that spend will fly out of control. At “worst,” budget would be utilized 100 percent. Managers, in turn, can cascade budget to team leaders who report to them, as well as reassign budget when necessary. In essence, the organization gets to optimize the expected distribution of program budget across the company from the start. All of these individual budget assignments can roll up to global program investment targets, so you can see how your program investment is being actualized in real time. The customer is enabled to define investment categories (such as Peer Recognition), set which types of spend within the program tie back to the category, and set budget targets specific to the category or more granularly by cost center. This data provides ongoing oversight automatically aligned with your program financial reporting and cost centers. You know what’s going on. It’s your system.

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2016 BUYER’S GUIDE FOR SOCIAL RECOGNITION SYSTEMS

EMPOWERING EMPLOYEES WITHOUT THE RISK Fast Company said it well: Empowering with permission but without action isn’t empowering. At least not when people must still obtain an unreasonable number of approvals and sign-offs to get anything done. This process signals a lack of trust. And employees can smell that lack of real trust from miles away: It’s perhaps the biggest thing that will snuff out grassroots momentum for employee recognition. Freeing employees to recognize means trusting them to identify things that are working well and the people that are contributing to success, no strings attached. And giving front-line managers access to recognition budgets to award points without requiring approval reviews is a powerful signal of trust. At the same time, platform controls mean budgets aren’t able to be blown. It’s a true win-win. Bodell, Lisa. “5 ways process is killing your productivity.” Fast Company. May 2012. http://www.fastcompany. com/1837301/5-ways-process-killingyour-productivity

Designing your unique program to get everything you need The core value of a social recognition platform is the consolidation of all recognition initiatives and related employee programs into one unified solution. Manual processes and tracking are completely automated, saving HR time, money, and effort. At the same time, consolidating spend from diverse programs enables budgetary synergies and increased employee value across all programs. And usage and spend are tracked and visible to program owners, so they can control where money is going and strategically allocate budget. A single platform for all programs provides the basis for alignment, from the team level all the way up to the brand. When the successes of the workforce are visible, teams learn to share and celebrate daily achievements. Visibility also offers a powerful incentive for everyone to collaborate and be departmentally agnostic.

How it works: Recognition features and functions A recognition platform enables recognition to continuously align with the company’s values and business goals, even as they change over time. To drive key strategic behaviors, recognition must be frequent. A platform that combines non-monetary everyday recognition with a variety of more formal options enables all kinds of recognition to flourish, reflecting accomplishments small and large. When every employee can recognize shared successes in real time, the foundation for a culture of recognition is established. Many platforms limit recognition access or slow the process with layers of approval. This approach is primarily due to outdated business models that rely on infrequent high-monetary-value awards, such as service awards. Look for a platform that enables the free flow of frequent recognition. These platforms are intuitive, engaging, and drive employee behavior, and that’s what makes their software worth paying for. The hallmark of their success is ongoing adoption and usage rates above 80 percent. That usage is driven by 360-degree access to frequent non-monetary recognition, creating grassroots momentum that permeates the entire organization, rather than relying on top-down approval-based awards disconnected in time and context from the moment of inspiration.

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A single platform for all programs provides the basis for alignment, from the team level all the way up to the brand. The average organization administers more than four separate recognition programs — WorldatWork Citation: WorldatWork. “Trends in Employee Recognition.” May 2015.

RECOGNITION TOOLS TO LOOK FOR FEATURE

PURPOSE

Non-monetary (social) recognition

Enable every employee to recognize anyone, anytime.

Points-based recognition

Underscore the value employees create with the right behaviors.

One-click recognition

Enable managers and executives to reinforce key behaviors instantly.

Email recognition

Make it even easier for employees to recognize, right from their email application.

Audio/video recognition

Personalize the experience and make recognition more meaningful.

Awards

Celebrate major contributions with nomination-based recognition.

Service anniversaries

Amplify career milestones and simplify the reward process by celebrating within the same social recognition system.

Recognition budgets

Empower everyone to recognize right away and never go over budget.

Intelligent manager notifications

Make sure the right people automatically know when success is shared.

Team recognition

Find and recognize teams without searching for members individually and risk missing someone.

Value of ad-hoc program tools Calling best-in-class platforms “social recognition systems” may be too limited. Considering the value to the employee and the business when programs are consolidated and aligned within a single platform, enterprise systems are offering complementary tools that connect related initiatives, as well as enable grassroots and spontaneous programs. Empowering budget owners to set up and run specific programs within the platform, such as wellness or sales incentives, helps to ensure ongoing effectiveness, relevance, and adoption of the entire system.

Set up for success: Configuration flexibility One size does not fit all. If every business context were the same, there would be a simple formula for fostering culture, influencing key behaviors, and aligning employees to business objectives. In reality, it’s precisely the uniqueness of each organization that can lead to the greatest competitive advantages. An effective recognition program will be tailored to the specifics of your company, from the overarching values and goals to the employee attributes and workflows that reflect how you do business, possibly in multiple different ways, all around the world. Tailoring a recognition program requires an enterprise-level solution. While benchmarks and best practices will be a valuable starting point, enterprise vendors know the secret to your success is in setting everything up — and evolving it over time — to support your unique culture and business context. Their software will be flexible, and their service model will assume deep ongoing consultation to remain in tune with your unique needs.

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Program lifecycle: Evolve, adapt, grow In combination with extensive configurability, ongoing adjustments to your platform setup should be easy. An enterprise vendor aligned with your success will be dedicated to keeping the program fresh and relevant. Ongoing partnership and consultation should be a given, both to innovate and grow the program and to evaluate and analyze progress to ensure outcomes continue to address your goals. Speak with existing customers to get a clear picture of how the vendor works with them on a day-to-day basis after the program has launched. There are some vendors that have a low-touch approach, only re-engaging with the client when a problem arises. Even before business and workforce changes come about, your recognition program can be evolving and adapting to anticipate your changing needs.

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Will your employees love it? Today’s workforce is used to great consumer user experiences that are so intuitive and behavior-driving, they’ve reshaped how we think. These applications have redefined — and continue to redefine — our expectations for an intuitive and engaging user experience. Enterprise platforms are not known for being attractive to employees. While employees have no trouble finding time to use Facebook, organizations struggle to get employees to adopt business systems. Most employee recognition platforms suffer from the same problems. How will you know you’ve found one that employees will love?

Adoption metrics and recognition frequency rates According to Gallup, the rule of thumb for effective recognition is at least one recognition per week, per employee. Gallup’s core engagement questions specifically address this metric: “In the last seven days, I have received recognition or praise for doing good work.” Their research has found that variation in responses to this question accounts for a 10 to 20 percent difference in revenue and productivity.1 Obviously, it’s only possible to attain recognition frequency at this level if employees are eagerly using the platform. Vendors should show strong, consistent adoption rates for their programs, with at least an 80 percent average across all programs.2 Recognition frequency follows from that level of adoption. While recognition every week is the goal, top vendors should show frequency of recognition across their customer base of at least once per month, per employee.

Gaining traction: Intuitive tools, beautiful UI High adoption and ongoing use is in large part a reflection of how much employees enjoy using their recognition program. Much, if not all, of today’s consumer application marketplace is driven by user experience. Applications are evaluated not by function but by beauty, because function is a given. Instead, consumers will try out a new tool for a few moments and decide immediately whether it’s a joy to use. Employees are consumers, and business systems need to compete in the same arena for employees’ interest and attention. Employee recognition platforms that drive behavior should look, feel, and act like the best social sites and applications available today. Everything should be easy to use and intuitive, making action within the platform straightforward and appealing. Plus, the interface should be configurable to align with your specific brand appearance.

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1. http://www.gallup.com/ businessjournal/25369/praise-praising-youremployees.aspx 2. Average employee activation rate across all Achievers customer programs is 82% (2014).

Building culture with communication A unified employee recognition program brand builds the employer brand. Not only does the program showcase the look and feel of your brand to your workforce every day, but given the right tools it can become the communication channel for building an ongoing relationship between employees and the company culture you’re creating. Imagine being able to communicate to your workforce whenever you want. Enterprise recognition solutions offer in-platform push communication tools for administrator use. That means HR has a direct communication channel that reaches every employee, in a context that commands attention because it’s meaningful to them.

Global experience Connecting the employee experience across regions is not straightforward. Companies must be sensitive to local context, but also ensure that international collaboration and alignment can flourish. MORE THAN WORDS A fully localized user experience means much more than translating text. Adjustments for tone, content, style, and usability across all local contexts must be factored into the design in order to offer a consistent employee experience. Many nascent global solutions try to get away with simple text translation. That’s not the best solution. Imagine your user experience when English is translated to Swedish without an expert’s eye. That user experience is going to be far from satisfying. True localization requires a commitment in skilled resources for the long term; it’s something few vendors are willing to do. LOCAL REWARDS Easier said than done, but in-country reward offerings are the gold standard. That means a partnership with a global vendor to deliver a catalog of meaningful rewards. Implicit in this approach is a reward offering that has fully considered local context and goes beyond a few generic items. In addition, employees should be able to explore the rewards catalog for their own locality. A Mexican employee viewing the options available to an employee in the UK is irrelevant (at best) and potentially leads to crossregional animosity — the opposite goal of a global recognition program! As with translation of text, there can be a wide variation in the perceived value of reward offerings, unless the vendor invests resources to guide and confirm the appropriate reward selection by country.

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2016 BUYER’S GUIDE FOR SOCIAL RECOGNITION SYSTEMS

FOREIGN EXCHANGE A core component of a globally consistent recognition experience is the delivery of relevant and relative recognition value for cross-regional transactions. Specifically, recognizing someone with monetary value should be processed seamlessly by the platform, converting the value in the giving location to value in the receiving location. Properly converting recognition value between regions should follow the best practice formula, including a price level index and instantaneous foreign exchange rate drawn at the time of the transaction. The price level index reflects purchasing power comparison between countries, adjusted for market exchange rates. Using an index and floating market exchange rates is more accurate than a static purchasing power parity multiplier, which is calculated using currency exchange rates from just one point in time. It’s important, too, that price level indices can be customized per program to reflect specific operational contexts.

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Realize potential: The future is now Employee recognition done right can drive incredible results. Getting to those results requires recognition to be a regular part of company culture — literally an everyday thing. Many vendors understand the potential of recognition and are happy to sell based on the concept. However, their tools and approach don’t always actualize the potential. It’s one thing to automate a process by providing an online form to nominate a colleague for recognition and allow that nomination to meander through review, approval, and award delivery. It’s another thing entirely to reinvent the end-to-end experience so that recognizing becomes integrated into the day-to-day fabric of work. Take the necessary time and effort to seek out the latter, so you have the opportunity to realize the potential and harness the power of employee recognition.

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Achievers delivers an Employee Success Platform™ that enables social recognition, which dramatically increases employee engagement and drives business success.

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Countries Serviced

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Achievers customer base retention for 12 month period ending May 2015 Average survey rating by Achievers customer program members, 2014 Average employee activation rate across all Achievers customer programs, 2014

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Languages Supported

www.achievers.com