Combine two years of manager-driven performance review data with two years of cloud-based employee-to-employee recognition data and you have some unrealized big data. Bring in organizational behavior scientists from San Francisco State University’s I/O Psychology department to analyze the data and you’ve got the makings of a compelling study that provides a glimpse into the future of performance management.
In partnership with Rockfish Digital and San Francisco State University, YouEarnedIt conducted a two-year study to test the relationship between manager-driven annual performance reviews and peer-to-peer recognition data. The goal: determine if real-time, peer-to-peer ratings could possibly be a better predictor of engagement and performance rather than traditional, point-in-time performance reviews.
“We had a theory that the annual performance review might not be necessary if employees had greater ownership of the process. By way of YouEarnedIt’s employee recognition software, we believed that the same employees receiving lots of positive recognition from their peers would also be the ones given top ratings from their managers,” says YouEarnedIt’s Tim Ryan, Director of Marketing.
The hope was to reveal potential predictors of future job performance as well as indicators of employee engagement. The initial results are promising and serve as the foundation for further studies on employee-driven, real-time performance management.
Research Psychologist Daniel Maurath served as the project catalyst and introduced YouEarnedIt to a team of researchers from his alma mater, San Francisco State University, to analyze the data.
“I contacted YouEarnedIt out of a curiosity to discover if a real-time recognition software could be an efficient driver of employee engagement and motivation. First, I thought YouEarnedIt’s service could be especially useful for organizations too small to justify expensive consulting contracts. Second, the use of a points system already solved the difficult problem of quantifying recognition. Together, these made it a great opportunity for interesting research,” said Maurath.
Maurath’s first introduction? Dr. Christopher Wright who runs the Employee Selection and Retention lab at San Francisco State University. The work in his lab seeks to answer the question, “How do we select the best employees and then retain them in the organization?” Employee retention projects have examined the personality correlates of job embeddedness and longitudinal predictors of job embeddedness in employees.
“One of the core principles of psychology is that recognition is a powerful driver of behavior. For recognition to be most effective it should be given immediately. That’s a challenge for most employees that peer-to-peer recognition software solves. It allows employees to send and receive feedback in real time. The results of this initial study are exciting because they show a link between the use of this innovative recognition tool and job performance,” says Dr. Wright, Associate Professor, San Francisco State University.
- 25% of all the employees saw a 1-2 point increase in their overall manager performance rating from year one to year two after using the YouEarnedIt platform.
- 77% of the lowest performing employees jumped 1-2 points in manager performance rating from year one to year two after using YouEarnedIt.
- The data showed a statistical link between the amounts of employee-to-employee recognition points received and overall manager performance ratings. As recognition goes up, performance ratings in the formal process go up.
- Turnover rates dropped 29% while using YouEarnedIt’s employee recognition software. The costs associated with replacing lost employees are significant and in the case of this study equate to a savings of an estimated $130,000 in one year.
Rockfish Digital experienced a companywide performance increase while using YouEarnedIt with both low and top performing employees receiving increased manager performance ratings. Moreover, the company experienced a decrease in turnover. Finally, the study builds on a compelling hypothesis that employee-to-employee recognition is clearly associated with manager-driven performance evaluation scores.
- Implementation of an employee-to-employee recognition platform may lead to an overall increase in employee performance.
- Many organizations struggle to “justify” the cost of a program aimed at providing more real-time recognition because the “soft-side” of HR is traditionally hard to quantify. This study confirms the very real and strong ROI within year 1 on the YouEarnedIt platform.
- Higher retention (lower turnover) may be associated with a workforce focused on a culture of employee-to-employee recognition and reward.
- Real-time, employee-driven recognition data may be a viable predictor of future employee success for organizations.