ONE O . C . T A N N E R R E C O G N I T I O N C O by chad johnson

ONE O . C .

T A N N E R

R E C O G N I T I O N

C O M P A N Y

❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘

u s O Kd Ideas and Information from your Recognition Resource

Vo l u m e 3 . N u m b e r 3

THE BUCK

N e w Y o r k – Money makes the world go around. And nowhere is it more apparent than on Wall Street, the financial center of North America and much of the world. But when it comes to awarding your employees, does it make sense to give them a mark, a yen, a buck, or a pound? American International Group Inc. (AIG) is headquartered in the middle of New York’s high-powered financial district. Eighteen-year AIG veteran data entry operator Dorothy Freeman laughs that her friends say, “You work down there in the big money!” AIG’s presence extends far beyond Wall Street, operating in approximately 130 countries and jurisdictions and employing 48,000 people worldwide. AIG is the leading US based international insurance organization and the largest underwriter of commercial and industrial coverages in the United States. Additionally, AIG engages in a range of financial services and investment management businesses. At one time, AIG offered cash as a service award option instead of a gift. The theory was that if someone didn’t see a gift choice they liked, they could take the cash and purchase their own gift. Dorothy Freeman comments, “My grandson used to say ‘Take the cash, Grandma!’ But I didn’t feel you got as much cash as you got [value] in the gift.” John Paul, HR assistant at AIG, administers the company’s service award program. He “I chose the gift ... explains that with the former program, the gift I felt it was nicer and choices were substantially more popular than had a more personal the cash option. touch. I wanted And then there’s the issue of taxes. something to In 1986, Congress and the show my President signed legislation which makes nonservice here...” cash service and safety awards tax-free below an Lillian Alberio average company-wide cost of $400. Thus they AIG, HR department are excludable from the income of individual award recipients. Cash awards, on the other hand, are taxed as income, diminishing the value of the money. The law allowing service and safety awards tax-free (continued on page 2)

STOPS HERE

TAXES

Recognizing the Recognition Company O.C. Tanner has always focused on helping others recognize people. We’ve seen time and time again the impact of positive recognition. Since we know the power of recognition, the employees of O.C. Tanner are delighted to have our accomplishments noticed. O.C. Tanner has been awarded the 1999 Shingo Prize for Excellence in Manufacturing. The Shingo prize promotes world-class manufacturing and recognizes companies that excel in productivity and process improvement, quality enhancement, and customer satisfaction. It recognizes a company’s legacy, current world-class performance, and vision for the future. The Shingo Prize is internationally known alongside the presti- Harold Simons (left), O.C. Tanner’s VP of Manufacturing, gious Baldridge National Quality Award and the Deming Prize. O.C. and Clark Campbell, (center), VP Tanner management received the prize during a ceremony in Columbus, of Quality, accept the Prize from Shingo Chairman Ross Robson. Ohio, on June 10, 1999. “The Shingo Prize represents the best of what we strive for,” says Kent Murdock, (cont. on page 3)

THE THRILL OF

VICTORY

It’s the pinnacle of the thrill of victory. Three athletes take the winners’ stand, and gently bow while the Olympic official places the victors’ medals around their necks. Anthem plays; crowd cheers. At the XIX Olympic Winter Games in Salt Lake City, the medals will be of the same exceptional quality and craftsmanship as the awards in your recognition program. O.C. Tanner has become the official supplier for all 2002 Olympic Winter Games medals – including gold, silver, and bronze victory medals for winning athletes, and commemorative medals Mitt Romney, President given to all participants. and CEO of SLOC, O.C. Tanner will also displays an O.C. Tanner medal design. supply similar medals for the VIII Paralympic Winter Games in 2002. The O.C. Tanner Company’s single focus is helping people recognize people with symbolic awards. In 2002, extraordinary athletes from around the globe will step forward to receive the world’s best-known recognition symbol: an Olympic medal. It is a perfect fit for the premier recognition company to provide the world’s best athletes with the ultimate recognition. “O.C. Tanner is a perfect example of the Utah ‘heroes’ we need to help us in staging a successful Olympic and Paralympic Winter Games in 2002,” notes Mitt Romney,

President and CEO of the Salt Lake Organizing Committee. “We are thrilled that O.C. Tanner has stepped up to provide the victory and commemorative medals for athletes coming from around the world to compete in these Games. An Olympic medal epitomizes achievement in sport, and O.C. Tanner is certainly worthy of producing (continued on page 2)

TWO BUCK STOPS (continued from page 1)

status was pushed by a coalition of award manufacturers and the American Watch Association, along with hundreds of employers who helped US lawmakers appreciate the everincreasing need for employee recognition. With the knowledge that most people were selecting gifts over cash, AIG human resources director, Edythe Childs, didn’t want any employees losing award money to taxes, so the company decided to redesign their program and eliminate the cash option. “I thought some employees might dislike losing the cash option,” she notes, “but it’s actually been very well received.”

TROPHY VALUE Lillian Alberio works in AIG’s HR department. Cash was still an option when she selected her five-year service award, but she says it hardly crossed her mind. “I chose the gift – champagne glasses. I felt it was nicer, and had a more personal touch. I wanted something to show my service here, and I display the award in my living room.” When designing an award program, it is important to determine what long-term purpose the award will serve. Should it be something that will vanish quickly? With cash, that’s almost always the case. Results of a recent survey conducted by Wirthlin Worldwide on behalf of American Express Incentive Services show that 18% of cash award recipients cannot even remember where the cash was spent. A further 29% used the money to pay bills. Other survey respondents recalled putting the money into savings, buying household items, or buying gifts for others (hardly a personal, memorable award). According to Edythe Childs, the temporary nature of cash does not provide the same meaning as a gift. “Cash just doesn’t hold the sense of accomplishment that comes with reaching a milestone,” she says. “We’ve found our employees feel more rewarded and satisfied with a gift.” Ms. Childs can also draw on the experience of her own service anniversaries. “When I wear the sterling silver beads I received at 15 years, I remember that I got them as a service anniversary gift. The AIG emblem is on the clasp, and that’s a nice reminder. There’s also an engraving plate on my five-year clock that reminds me why I received it.”

SATISFYING DIVERSITY By offering cash in their former program, AIG hoped to satisfy a diverse workforce across North America by allowing them to purchase their own gifts.

“Each employee has different interests, ... you have a selection of items for things you do in your life outside of AIG.” John Paul, AIG, HR Assistant

The company previously offered five or six choices at each year level. To increase the probability of each employee finding a desirable award, AIG has increased that number

to eleven or twelve options for each level. “Each employee has different interests,” John Paul explains. “We have people who like hunting, so we included hunting accessories. People enjoy photography...jewelry... luggage for traveling. When we created our new program we were looking for a variety of awards that would be in everybody’s interest. We tried to expand so that no matter what level or A wide variety of awards helps ensure position you are in with AIG’s diverse workforce is pleased with their choices. the company – from president to clerical worker or mailroom operator – you have a selection of items for things you do in your life outside AIG.”

THE EXTRA MILE While AIG made substantial adjustments to the tangible part of their program, one thing did not change: on their anniversary, every employee gets taken to lunch by their supervisor or manager – and they can bring their colleagues, too. “At AIG the luncheon pulls the service recognition together to say, ‘This is your day,’” Edythe Childs explains. “Employees seem to like having their boss take them and their peers out to lunch. They’re queen or king for a day. It’s become a very well-known, and well-received thing at AIG that your service anniversary is an important day. It’s grown through our culture. We train our new managers to do the same thing.” For Dorothy Freeman, the lunch was so memorable that she can recall the names of all 12 people who attended from Dorothy Freeman Eighteen-year AIG veteran, memory. “It was at a Data Entry little Chinese restaurant,” she says, “and it was all very nice!” Lillian Alberio agrees. “At the luncheon when you’re presented in front of your colleagues, it makes you feel really special.”

18 YEARS

RESULTS While it takes cash to live in our modern world, management and employees at AIG have realized that when it comes to their service award program, the buck had to stop ... and the more valued awards and recognition had to start. Since the program changed at AIG, John Paul has been monitoring the results. “Employee feedback says, ‘This is great!,’” he comments. “We have a much better variety, and there’s more value to the gifts. People are very satisfied.” Background photo: AIG’s headquarters rise high over New York’s financial district.

VICTORY (continued from page 1)

this special element of the Games.” The victory medals will be produced at O.C. Tanner’s Salt Lake City manufacturing plant – in the shadows of Utah’s majestic Wasatch mountains and the venues where Olympic and Paralympic Games competition will occur. As with every award the company produces, the medals will be of the finest quality metals and alloys, and will be crafted to stringent and exacting standards. While the presentation of an Olympic medal is often a worldwide media event, it has no greater importance than the “medals” you present to your employees each day – awards for length-of-service, safety, sales, and performance. O.C. Tanner strives to provide you with ideas and information to make each recognition opportunity at your company a grand recognition event – one worthy of cheering crowds celebrating the “thrill of victory,” whatever the accomplishment. Kudos will continue to update you on Olympic medal developments such as design, quantity, and manufacturing techniques over the next 32 months leading to the games. TELL YOUR PEOPLE! LET YOUR PEOPLE KNOW THAT THE AWARDS THEY RECEIVE ARE OF THE SAME WORLD-CLASS QUALITY – AND MANUFACTURED BY THE SAME CRAFTSMEN – AS FUTURE OLYMPIC MEDALS.

Kudos Volume 3. Number 3 Publisher Editor Copy Editors Designer

O. C. Tanner Co. Randall Shirley Marylu Dadakis Mike Allred Janice Takagi

Phone: 1-800-828-8902 Fax: 1-801-483-8296 E-mail: kudos@octanner.com KUDOS is published by O.C. Tanner Company, 1930 S. State St., Salt Lake City, UT 84115. Copyright 1999 by O.C. Tanner. All rights reserved. Reproduction in part or whole without written permission is prohibited. Not responsible for unsolicted materials. Second-class US postage paid at Salt Lake City, UT 84101 and additional offices. Postmaster send address changes to above address.

AIG’s headquarters tower over New York’s financial district.

Volume 3 . Number 3

KudOs

THREE I N

O T H E R S ’

W O R D S

Tell Your Managers,

(continued from page 1)

A L L

T H E

“Break the Rules” How do you make your company an “employer of choice?” With unemployment continuing at extreme lows, employers across North America are asking that question. Two members of the Gallup Organization, one of America’s most highly regarded research groups, have recently shared what they believe are the answers in their entertaining and highlyreadable book, First, Break All The Rules: What the World’s Greatest Managers Do Differently. It should come as no surprise: Recognition continues to be emphasized as a key to attracting and retaining employees. The book is based on 25 years’ worth of survey results of over a million employees, and some 80,000 managers. After distilling the massive amounts of data, authors Marcus Buckingham and Curt Coffman determined a list of twelve questions managers should be trying to fulfill for their employees. The top six: 1. Do I know what is expected of me at work? 2. Do I have the materials and equipment I need to do my work right? 3. Do I have the opportunity to do what I do best everyday? 4. In the last seven days, have I received recognition or praise for good work? 5. Does my supervisor, or some one at work, seem to care about me as a person? 6. Is there someone at work who encourages my development? The book explains that, “...today’s business pressures are more intense, the changes necksnappingly fast. Yes, companies need self-reliant employees and aggressive leaders. But all this does not diminish the importance of managers. On the contrary, in turbulent times, the manager is more important than ever. “[The manager role] is best played one employee at a time: one manager asking questions or, listening to, and working with one employee.” The book solidly reinforces the importance of regular recognition from managers to employees as a motivational tool – an important factor in keeping your company fully-staffed. Source: First, Break All the Rules: What the World’s Greatest Managers Do Differently, by Marcus Buckingham & Curt Coffman, Simon & Schuster, 1999.

Thoughts from the National Association for Employee Recognition Sharing Conference What happens when several hundred people gather in a convention hall to talk about making employees feel appreciated? Well, there’s more than a little buzz! An employee from Toyota gets a hot recognition tip from a manager at Sears – that employees most value hearing their supervisor say “great job.” A representative from Ameritech might network with Chevron’s recognition specialist on effective ways to say thanks. The topic of Recognition is heating up across North America. “Lack of recognition” constantly shows up in “why employees are dissatisfied” lists. It’s talked about around the water cooler (I couldn’t believe the amount of work Alice went to for my service anniversary presentation!). Now it’s being talked about big time by members and guests of the National Association for Employee Recognition. The Association recently hosted its second major national Recognition Sharing Conference in San Antonio. Employee Recognition is a broad topic – conference speakers and participants reflected a diversity of interests and purposes. But attendees all had one common goal: to make employees feel recognized for their contributions. Sessions included such topics as: ★ “Recognition Building: Anything You Can Do I Can Do Better,” by Caterpillar ★ “Celebrating the Achievement: How to Make High-Impact, Meaningful Award Presentations,” by O.C. Tanner ★ “Does Your Program Work? Measuring the Impact of Recognition,” by Mary Kay Cosmetics ★ A “Best Practices” forum ★ “Launching a Change in Your Corporate Culture,” by Universal Studios The National Association for Employee Recognition includes members from a diverse group of companies, including well-known businesses like Disney, Caterpillar, and Royal Bank of Canada, as well as representatives from many large and small organizations. Some thoughts from the sessions:

“While a company may have big rewards systems, we still have to approach people as individuals.” “The highest way to praise someone is to praise them to someone else within their hearing.” Joanna Slan, Author and Speaker. Session: “I’m OK, You’re Weird: Giving Recognition to Different Styles of People.” (continued on page 4)

Flower

CEO of O.C. Tanner. “Just as the awards we manufacture help validate employees’ efforts around the world, this prize affirms that our processes are strong, that our products and services are innovative, and that our vision for the future is on the right track.” The Shingo Prize indicates that our company’s recent developments such as a state-of-the art award distribution center and short-leadtime cellular manufacturing are major contributors to performance excellence. It also reinforces the importance of new initiatives in client service teams and product innovations. We are proud to join with past Shingo Prize recipients, including several of our clients and suppliers: Lucent Technologies, Exxon Chemical, Johnson & Johnson Medical, Coach (leather), Wilson Sporting Goods, and Iomega. While the 2,124 employees of O.C. Tanner are delighted with the honor, we know that just like the employees you recognize, we must work even harder to satisfy our valued clients – and satisfy your recognition needs. We won the prize for many reasons – including our dedication to never-ending improvements. As we have in the past, we will continue to work every day to ensure that we are qualified to display the Shingo Prize. Most importantly – we will continually work to meet and exceed your expectations.

It’s said: flowers in a vase put a smile on your face! (even guys like them). These fabulous vases make great awards. Chances are, your people will like them so much they’ll display the vase even without the flowers.

Power

Marquis by Waterford crystal vase Nambe “Ellipsis” vase

Lenox china vase

Kosta Boda crystal vase

ON THE COVER: From AIG’s program-- LLADRO “Fragrant Bouquet” figurine, Sligh Danvers quartz clock, Woman’s sterling silver triple-band ring with 14K gold “X” top.

Volume 3 . Number 3

FOUR O . C .

T A N N E R

R E C O G N I T I O N

C O M P A N Y

❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ PROGRAM

A L L

“When merchandise is branded with a company’s logo, it gives [the gift] trophy value.” “What employees want: 1) a valued reward, 2) specific knowledge of...what is being rewarded, 3) consistency of program application.”

T H E

BUZZ Thoughts from the National Association for Employee Recognition Sharing Conference (continued from page 3)

ONLINE PRESENTATION TRAINING Online Presentation Training is our new, innovative service that makes it easier than ever for managers to prepare for a presentation. Now, with just a few clicks, the person presenting the award can access all the highimpact ideas and suggestions of our video- and telephone-based training programs – including basic suggestions, creative tips, and the ever-popular “historical information” section. If you currently subscribe to Just-In-Time Training by telephone, your people began receiving the website address in early April – printed in their instruction card. If you have an Internet-based award program, your presenters are notified by e-mail, with a link directly to the training site.

Karla Nagy, Senior Editor, Human Capital. Session: “Profiles in Excellence: Recognition and Motivation Strategies that Work.”

With the variety of recognition programs [we have] available, people can choose the ones that they are immediately comfortable with and practice for the formal recognition opportunities like Service Award presentations. The goal is to make positive reinforcement something that all employees give and receive regularly. At NAER, I have been able to meet with other presenters who have the expertise to continually improve our system. Barbara Ruddy, Employee Recognition Administrator, Arizona Department of Economic Security For more information on the National Association for Employee Recognition, call (630) 369-7783, or www.recognition.org. O.C. Tanner is proud to be a Platinum Sponsor of the National Association for Employee Recognition, and maintains an active seat on the organization’s Board of Directors.

POINTERS

For a demonstration and more information, contact your O.C. Tanner representative.

? 3

LIFESTYLE PRODUCTS A vase is the place for summertime blooms!

❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘

ALL THE BUZZ Thoughts from the recent Recognition Sharing Conference

PA G E

IN OTHERS’ WORDS The Gallup Organization’s new book says ... recognition is crucial.

PA G E

4200 Fairview Street Burlington, Ontario L7L4Y8

NEWS FLASH! O.C.Tanner receives world’s top prize for manufacturing excellence.

PA G E

1930 South State Street Salt Lake City, Utah 84115

PA G E

COVER STORY Thinking of offering cash? Think again.

Volume 3 . Number 3