TheWhitePaper*

Designing Your Company’s Social Architecture:Five Steps to Build a Culture of Appreciation across Borders

ISSUE 5 FEBRUARY 2008

TheWhitePaper*

In their groundbreaking people manage-

ment book First, Break All the Rules, Marcus

Buckingham and Curt Coffman of the Gallup

Organization discussed human nature as the

last reserve of value to remain untapped by

the vast majority of companies today. How-

ever, the power of human nature is unlike

any other force of nature because “…each

human’s nature is different. If companies

want to use this power, they must first find a

mechanism to unleash each human’s nature,

not constrain it.”

The mechanism to unleashing each per-

son’s best lies within your company’s cul-

ture – the outward manifestation of your

social architecture, which is the method by

which companies enable collaboration, build

relationships and coordinate communica-

tion between people, across teams and even

around the world.

So, how do you design your company’s social

architecture to foster a culture in which your

employees will accomplish what you need

while avoiding the pitfalls that are so com-

mon in a global workforce of multiple cultures

and social standards that now also spans six

generations? In working with the world’s larg-

est and most complex companies, we have

discovered there are five critical steps to build

a culture leading to success every time.

In today’s work environment where people spend more time with their work

colleagues than with friends and family, the organization they work for is a

significant part of their social fabric. In any situation where people are grouped

together to achieve a purpose, individuals want to know they belong. Further,

they want to know they belong to a “winning team” – a group that has either

proven their success in the past or has clearly defined strategies to do so in the

future. On an individual level, employees need an understanding of the value

they personally bring to the organization and they need to know they are making

a valuable contribution to the team, the company, and its customers.

How to Build a Culture of Appreciation1. Determine what your culture is today

2. Cultivate a global culture of appreciation

3. Evolve your social architecture

4. Communicate consistently and constantly

5. Eliminate borders through a culture of appreciation

TheWhitePaper*

DETERMINE WHAT YOUR CULTURE IS TODAY

As in any social group, a company’s culture

is defined by the people in it. The culture

is the shared ways employees think and

act, often learned over time and heavily

influenced by their peers and managers.

Yet organizational culture is a significant

driver of employee engagement, which in

turn determines how productive a person

or working group is – all of which impact

bottom-line results.

What is your company’s culture today? After

spending so much time and effort developing a

strategy, mission and values, company leaders

hope those values become the basis for the

company culture, but that is not always the

case. Unless the values are visibly and quanti-

fiably reinforced on a daily basis, they become

nothing more than an engraved plaque hanging

on the wall. Instead, the culture derives from

perceptions and attitudes – the human nature

– of highly differentiated individuals.

1

Social Architecture

Culture of Appreciation

Employee Engagement

Productivity

IncreasedBottom Line

The Results of a Solid Foundation

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A Global or Imperialist Culture?Is your culture truly global or imperialistic

and imposed from the country where your

headquarters are located? We have repeat-

edly heard from our clients about the pain

of past “global” initiatives in the company,

whether they were HR programs intended to

inspire or software systems intended to sim-

plify and streamline production. In nearly ev-

ery case companies have first deployed in the

headquarter’s country with eventual roll-out

to outlying divisions with little consideration

given to local languages, cultural norms, or

work processes.

In a truly global culture all divisions in all

areas of the world believe themselves to be

equally valuable to delivering on the com-

pany’s stated mission. In this culture, all

employees perceive their contributions to be

critical to meeting and exceeding customer

needs, thereby growing the customer base

and increasing the bottom line.

“If done well, effective recognition can develop

an international cadre of engaged employees

who help drive the company’s long-term goals.”

Workforce Management, Sept. 2007

A Culture of Intimidation or Appreciation?Is your culture based on intimidation or on

recognition? The unintentional consequence

of many productivity or quality improve-

ment initiatives is the creation of a culture

of intimidation to achieve goals – or else.

In such an environment, employees tend

to disengage from the company and their

work, negatively affecting productivity and

performance in a potentially devastating way.

Gallup conducted a study in 2004 finding if

a manager ignores an employee, the chances

of employee disengagement are 40%. If the

manager focuses on employee weaknesses,

the chances of disengagement are 22%. And

if the manager focuses on an employee’s

strengths, the chances of the employee being

disengaged drops to just 1%. In a subse-

quent study in 2007, Gallup found it to be

not uncommon for between one-fifth and

one-third of employees to say, “Not only have

I not received any praise recently, my best

efforts are routinely ignored.”

Focusing on their weaknesses or ignor-

ing employees altogether will only serve

to foster a culture of intimidation. Giving

them work that draws on their strengths and

then encouraging them builds a far more

productive environment. In the same 2007

study, Gallup found the average benefit of

a 10% increase in recognition to be 6.5%

greater productivity and 2% higher customer

engagement where each percentage point

equates to hundreds of millions of dollars in

sales for a Fortune 500 company.

TheWhitePaper*

CULTIVATE A GLOBAL CULTURE OF APPRECIATION

Many studies have been conducted to try to categorize what type of culture a

company has and which is the most effective at accomplishing that company’s

priorities. Pundits seem to think that some combination of competition, coop-

eration and even aggression helps companies deliver the goods.

“Companies are realizing that culture is as im-

portant as strategy and that they can’t just look

at the short term anymore.”

– Barbara Bilodeau Director of Market Research and Analysis, Bain & Co.

Our global clients have proven differently,

repeatedly realizing that a culture of appre-

ciation that reinforces the company’s stated

values is the best strategy to achieve the

company’s mission. A culture of apprecia-

tion allows for individualism in approach to

accomplishing tasks, but unites employees

across geographical and divisional boundaries

through a common attitude of recognition for

tasks well done and goals achieved. It creates

opportunities and a desire to say “thank you”

throughout the day, month and year.

The leaders of globally influential compa-

nies are now feeling an urgency to develop

a company culture appealing to employees’

need for a sense of belonging and value, a

2

need for community in their workplace and

positive relationships with high-performing

peers and managers, a need to be recognized

as individuals and to gain prestige for their

contributions. In a study of more than 1,000

international executives conducted in 2007,

Bain & Co. found nine out of 10 executives

believe corporate culture is important today

as a strategy for success.

This executive buy-in is critical for the success

of a strategic recognition program that fosters

a culture of appreciation. To perpetuate an ef-

fective culture of appreciation, employees need

to receive relevant and valuable rewards that

meet their need for psychic income – social ac-

ceptance, increased self-esteem and self real-

ization. And such a recognition program should

be driven by a core, in house program manage-

ment team that encourages employees to make

recognition part of their daily work. Senior-level

validation of the recognition program and the

program management team is essential, prefer-

ably through an executive champion respon-

sible for driving global program awareness.

Dow’s Culture of Appreciation

*Recognition is a strategic project.

*200,000 “Thank You” moments

*90% of all global employees recognized

someone in first year.

*87% of employees agree the culture of ap-

preciation has improved.

*Employee satisfaction scores rose from ap-

proximately 65% to approximately 85%

TheWhitePaper*

EVOLVE YOUR SOCIAL ARCHITECTURE

Bring Your Company Values to LifeOnce a culture of appreciation has been estab-

lished through the use of a strategic recognition

program, it becomes possible to bring your

company values to life. An absolutely critical

step in taking the values off the wall plaque

and instilling them in the every day actions

of the employees is to ensure all actions or

behaviors nominated for recognition are tied to

a corporate value. In many companies, recogni-

tion happens on a one-on-one basis between

a manager and an employee with no clear

rationale behind the reward. For example, if a

manager chose to reward a staff member for

organizing a team morale boosting activity, then

other team members may assume that making

work more fun is a value to be rewarded when

in fact that has nothing to do with the firm’s

stated values.

When all nominated activities or behaviors are

tied to a company value, then at least two peo-

ple – the nominator and the recipient – must

think about the values during the process. If

such nominations require approval, then even

more people are reminded of the values. And

if all recognitions within a set time period are

then announced in a monthly team meeting,

then entire teams or divisions will be reminded

of the values and how to demonstrate and

achieve them in every day tasks. In large, glob-

ally distributed companies this is virtually the

only way to make the company values come

alive for every employee at all levels.

“Effective recognition initiatives are operated as

part of a larger system designed to reinforce the

key values of the organization.” – The Corporate Leadership Council:

What Do World-Class Companies Do?

The Economics of Strategic RecognitionOnce rewarded actions and behaviors are tied

to values, it becomes possible to report on the

traction specific values have in the organiza-

tion. Much like lagging indicators show where

trouble lies ahead for economists, values not

frequently rewarded become an indicator of

where management may need to intervene.

Our global clients use dashboards and value-

adoption charts not only to track rewards

system usage, but to target values adoption

company-wide or even at the division or unit

level. By targeting lagging values, managers

can work with specific employee groups or

divisions to bring everyone to the same level

of understanding and acceptance of all of

the values.

“I believe that we need to become a much

more competitive company, a more efficient

company, a more service-oriented company,

and a more aggressive company. However, it is

much more than just changing our products or

changing the architecture: it means changing

the Reuters culture as well.”

– Tom Glocer CEO, Reuters

3

TheWhitePaper*

Penetrate the Entire Organization to Gain KnowledgeThis level of insight into company culture is

not possible, however, in recognition pro-

grams where only the top 10% of employees

are involved. At least 80% of employees in

all locations must participate in the strategic

recognition program for enough knowledge

to be gathered on which values are not being

selected as a reason for recognition. It is

only when values adoption at every level of

an organization is fully understood that the

company culture can be manipulated by ad-

dressing those lagging values and influencing

employees to improve in those areas.

For the same reason, the frequency of awards

must also be significantly higher than is

typical to achieve the level of knowledge on

values penetration necessary to evolve a so-

cial architecture. Globoforce’s model encour-

ages a high frequency of low-value awards

to foster a culture of appreciation. Once a

high frequency of awards to at least 80% of

the employee base is reached, the strategic

recognition program will market itself. As the

Corporate Leadership Council recently noted,

“If someone doesn’t feel appreciated, they

can’t appreciate others.”

Elitist Recognition Program

No values adoption or manipulation companywide

Strategic Recognition Program

Social architecture evolvedCulture of appreciation established

Tactical Recognition Program

Little to no impacton company culture

Infrequent Recognition Program

Low Psychic Income value to participants

100 20 30 40 50 60 70 80 90 100

Ann

ual

Bi-

Ann

ual

Mon

thly

Wee

kly

Dai

ly

Freq

uenc

y of

Rew

ard

Percentage of Employees Recognized

TheWhitePaper*

COMMUNICATE CONSISTENTLY AND CONSTANTLY

Once your strategic recognition program has

at least 80% of employees nominating for and

receiving rewards, then the communication

begins to self-perpetuate. We have seen con-

sistently across clients who have the highest

employee satisfaction scores that when 5-8%

of employees are nominated for rewards every

“Getting employees to be part of the communication process is more than a one-way cascade of informa-

tion flowing from management. It’s about creating a culture where employees help lead the process.”

– Melcrum Report, October 2007

Communicating a Company’s CultureNorthwestern University’s Forum for People

Performance Management & Measure-

ment found in a recent study that achieving

a motivated workforce is only possible if

employees are satisfied, which can only be

accomplished through the development of an

effective communication environment, both

up and down the organization.

To effectively communicate, a common lan-

guage is needed. In the case of your company’s

culture, the common language should be

based on a brand consistent with your compa-

ny’s market brand, but unique to the strategic

recognition program. Then, as discussed above,

it should incorporate your company’s values

and strategy into every level of communication,

from recommendation, to award types, to ap-

proval process, to receipt and redemption – all

translated into the local languages of employ-

ees around the world. With this type of unifying

recognition language, the culture of apprecia-

tion will cascade throughout the organization.

Importance of Consistent Employee CommunicationSeveral research studies during the last

decade have shown the lack of effective

communication deep into an organization

is a major reason why people leave. This

is largely because people need a sense of

belonging and an understanding of how their

jobs fit into the company’s mission. In es-

sence, they need a social architecture.

A lack of consistency in communication can

lead to confusion about goals, priorities and

even company performance. A manager cannot

only inform an employee of their tasks, but also

must tie those tasks to the company’s strategy

and success. Then the manager must take it a

step further to show the employee how he will

too benefit from the success.

Only when employees can make this leap

from the personal benefit to the corporate

benefit will they become fully engaged,

allowing the organization to achieve a full re-

turn on the compensation, training and other

investments made in that employee.

4week, then the program needs no further inter-

nal marketing or communications “push.” And

companies do not need to invest additionally to

achieve these returns. Lower value awards will

generate the same sense of goodwill in a much

broader audience for the same budget as far

fewer high-value awards targeted to the elite.

TheWhitePaper*

ELIMINATE BORDERS THROUGH A CULTURE OF APPRECIATION

“No successful organization can have even one

spectator. Instead, there needs to be a culture

shift so that every leader and employee recog-

nizes that they have a responsibility to the pro-

cess. Engagement and collaboration must hap-

pen between departments and between levels

(i.e., horizontally as well as vertically).”

– Melcrum Report, October 2007

Geographic BordersA culture of appreciation can break down

the boundaries of country, continent, and

language. In today’s multi-national corpora-

tions where a functional team or a division

includes team members spread across mul-

tiple countries, it is critical to give employ-

ees the ability to interact with the system in

their own language to ensure the spread of

a culture of appreciation doesn’t stop at the

border. With more than a dozen language

options in a Globoforce strategic recognition

program it is possible, for example, for an

employee in Beijing to view the portal in Chi-

nese, but nominate a team member in Tokyo

such that the recipient receives the reward

in Japanese, while the manager located in

Paris receives and approves the nomination

in French, the reward is issued in Japanese

yen, and the client is invoiced in pesos at

company headquarters in Mexico City.

Division BordersWithin global organizations, it is not uncom-

mon for divisions to share best practices,

research, or even team members. An orga-

nization-wide recognition program branded

with the company’s values and delivering a

single consistent message on the company’s

strategy and vision acts as the bridge be-

tween divisions. All employees everywhere,

regardless of divisional reporting structure,

share a common language of recognition,

and a common culture of appreciation.

In today’s hyper-active mergers and acquisi-

tions environment, companies also need

a way to excite newly acquired employees

about the company’s values and strategy, to

involve them in their new company’s culture,

and to integrate them fully into the social

architecture. A strategic recognition program

that employees want to participate in, that

recognizes employees – new and old – fre-

quently and consistently, and that embeds

the brand and the values into every day

activities is a powerful tool to increase the

momentum of the integration process.

5When borders exist in an organization, whether they be geographic, divisional

or because of position, progress slows. Nothing should impede the sharing of

ideas or the flow of talent. Most importantly, however, nothing should stand in

the way of well-deserved recognition.

TheWhitePaper*

ELIMINATE BORDERS THROUGH A CULTURE OF APPRECIATION

Employee BordersAs recognition evolves a company’s social

architecture, a global culture of apprecia-

tion becomes woven in the very fabric of

a company. Manager-to-peer, peer-to-peer,

team-to-team – all are powerful recognition

options, but too often companies limit their

programs to the classic manager-to-peer

model. While recognition from the manager

is always valuable, a 2007 Gallup survey

found positive words from any source acti-

vate regions of the brain related to reward,

“Creating an internal reward system that

makes employees want to repeat behavior

that the company needs, if doing the right

thing earns them recognition.”

Peer-to-peer recognition is one of the most

powerful methods for driving strategic rec-

ognition program penetration and accep-

tance, employee engagement, and bottom

line results. When employees are given the

power to thank their colleagues regularly and

frequently – in the local language and cur-

rency – it unleashes a company’s latent power

in its people to unite the workforce, energize

a recognition program and drive productivity

across the organization.

Gallup found in their 2007 study that recog-

nition activates regions of the brain related

to reward. One employee Gallup interviewed

explained: “For me, receiving praise and

recognition kind of sets off a little explo-

sion inside. It’s kind of like, ‘Oh, that was

good, but you know what? I can do better.’ It

helps give you that drive to want to continue

achieving, doing yourself one better.”

Are you in need of a social architecture that inspires your employees

to be more productive? Are you prepared for the growth a culture of

appreciation can bring to your employees? Our consultants are ready

to help you build a strategic recognition program that fosters a cul-

ture of appreciation based on your company’s mission and values.

Visit us on the web at www.globoforce.com or email us at

corporate@globoforce.com. To speak to one of our global consultants

immediately, please call: +1 888-7-GFORCE.

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Globoforce (North America)Reservoir Corporate Center

144 Turnpike Road, Suite 310, Southborough, MA 01772 USA

Phone: +1 (888) 7-GFORCE (436723) Fax: +1 (508) 357 8964 Email: corporate@globoforce.com

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Phone: +353 1 625 8800 Fax: +353 1 625 8880 Email: corporate@globoforce.com

Private Limited Company

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© 2008, Globoforce Limited. All rights reserved.

About Globoforce

Globoforce is the leading worldwide provider of on-demand strategic reward and recognition

solutions for Global 2000 companies. Globoforce’s flexible and efficient recognition tool can

scale from one user to millions of users with ease, offering global companies a powerful and

secure solution to implement and manage their companywide or divisional employee recognition

programs. Through a dynamic, easy-to-use, on-demand technology platform, Globoforce trans-

forms the way companies engage, motivate and empower their workforces across the world. Co-

headquartered in Southborough, Mass., and Dublin, Ireland, Globoforce was recently selected by

the Great Place to Work® Institute as one of the “50 Best Companies to Work For.” Globoforce

won a 2007 Process Innovation Award for the creative deployment of Dow Chemical’s global,

on-demand employee recognition program. Globoforce also won Human Resource Executive

magazine’s coveted “Top HR Product of the Year” award in 2004 for its revolutionary on-demand

software solution. Some of Globoforce’s world-class customers utilizing this enterprise-class solu-

tion include Amgen, Avnet, Dow Chemical, Intuit, Procter & Gamble and Reuters.