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News Analysis: Why ISO Matters to the Rewards & Recognition Business

Over the last six months, RRN and its sister media ESM have reported on new ISO 9001 and ISO 10018 standards that explicitly call for formal engagement strategies that include rewards and recognition. Now, ISO is about to publish the first human capital disclosure standards for companies dedicated to performance through people that explicitly advocate for an enterprise approach to engagement that also includes rewards and recognition. 
 
Why should this matter to the rewards and recognition field? Well, for the first time the use of engagement strategies, including rewards and recognition, are considered essential to organizational success by one of the world’s most prestigious standards organizations. Even if a company has never heard of ISO 9001 quality management or other ISO standards, the new standards they’re issuing on human capital management will change the story line, because they call for the same sort of systematic, scientific approach to people management that transformed Quality Management in the 1990s. 
 
This will require a new level of expertise and knowledge from the practitioners and solution providers that help organizations spend upwards of $100 billion annually on different ways to engage people, because it’s likely that the majority of current incentive, recognition and loyalty programs fall far short of best practices. 

Ushering in a New Level of Respect and Requirements 

Rewards and recognition professionals still don’t get the respect they deserve, despite 10 years of research illuminating their value and the conditions under which they work. Most business people never learn about this field in school, and the subject is treated only lightly in the major business media. The recognition by ISO that rewards and recognition play a critical role in achieving organizational goals is a great step forward for the field -- as long as practitioners and solution providers heed the research findings and profit from best practices. 
 
Organizations don’t need to follow ISO standards to recognize that they offer a useful, voluntary set of guidelines that provide a clear pathway to enhanced efficiency and stakeholder experience. This validation is a wake up call to organizations to pay more attention to best practices and expertise, whether or not a company is ISO 9001 certified or believes it could benefit from ISO 10018 certification. 
 
Based on extensive research produced over the last decade with the support of the Incentive Research Foundation and other independent sources, many incentive, recognition and loyalty programs fall short of best practices by: 
  • Addressing mostly the top 20% who achieve anyway. The best results come from identifying how to equip and inspire the middle 60% to up their game.
  • Focusing on carrots rather than inspiration and experience. Research and common sense confirm that it’s the manner of selection, presentation, communication and the experience of the reward that has the greatest long-term impact.
  • Failing to address all the other the levers of engagement -- brand and culture, leadership, communications, learning, innovation and collaboration, rewards and recognition, analytics and feedback in a systematic way. Incentive, recognition and loyalty campaigns generate far better and more sustainable returns if they align and equip everyone toward common goals in an integrated way, rather than the current ad hoc approach. 

New ISO 9001 Standards a Ringing Endorsement for Motivation 

For the first time, ISO 9001 standards that take effect this year state that human resources are critical to sustainable success and demand a strategic, integrated approach that includes all the key audiences and levers of engagement. The latest version of the quality standard taking effect this year includes clause 7.1.2 and others that call for a systematic approach to almost all aspects of engagement, including all rewards and recognition. The same ISO Technical Committee also published ISO 10018 standards designed to flesh out those people standards to enable any type of organization, from quality and professional services to government and not-for-profits, to benefit from a formal, strategic approach to Quality People Management, just as ISO 9001 helped accomplish for Quality Process Management.
 
And now, perhaps even more significantly, a separate ISO working group, HR 260, is about to publish standards 30414 on human capital reporting that provide a voluntary means for people-oriented companies to disclose their people practices, including the explicit call for an enterprise approach to engagement that includes rewards and recognition and all other elements of an organizational approach to engagement. With more public companies facing requests from investors for human capital disclosures, these new standards have the potential to become widely embraced.. 
 
The only question now is whether the rewards and recognition field will rise to the challenge and insist on bringing best practices and science to clients, or will many in the industry continue to let clients take short-cuts that not only undermine success but fail to tap the true potential of effectively designed reward programs and experiences? 
 
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