A digital pat on the back from the boss: What's it worth?

January 26, 2012: 11:09 AM ET

Some companies that are too busy for face-to-face recognition of their employees' efforts are turning to recognition software. But will it make a difference to a star staffer with options?

By Gary M. Stern, contributor

FORTUNE— Call it the itch. Many employees catch it, that desire to find the next great job, discover what new opportunities are out there, search for a more sympathetic manager, and perhaps a raise.

But the employees who actually take the plunge are often the top 10% of performers -- the engineers who create products, the marketers who sell them, the creative ones who develop new revenue streams. And you certainly don't want to lose them.

A December 2011 survey of 3,000 workers conducted by the employment agency Randstad revealed that 47% of employees plan to test the job market in 2012. Complacent employees often sit tight while the ambitious go-getters primed to move up consider new options. But some companies are taking steps to retain their talent and discover why their most valuable staffers might want to depart before it comes time for an exit interview.

Nearly half of the employees surveyed by Randstand expect the job market to brighten in 2012, increasing their chances of finding new opportunities. The fact that many employees plan to seek greener pastures reveals a change in attitude over the last few years, says Peter Cappelli, director of the Wharton Center for Human Resources.

In the early 2000s, job satisfaction rose during tough times because many employees were content to have just avoided downsizing, Cappelli says. Firms have since intensified layoffs, ratcheted its demands on remaining staffers (aka the survivors), and toughened performance standards. The result: more employees are looking for better treatment. And raises and bonuses are no panacea, Cappelli says. If managers are overworked and don't have time to spend with their family, higher pay won't solve the problem.

Elissa Tucker, a Cedar Rapids, Iowa-based researcher for the non-profit American Productivity and Quality Center, says that companies that have their act together on this front identify their top 10% of performers and continually update that list. "Even during the downturn, they didn't let up trying to engage top performers," she says.

3M (MMM) recently asked its employees what motivated them the most and then customized its approach to suit them. The consumer products conglomerate then organized its staff into three categories: those motivated by career advancement and pay, those who value having supportive managers and supervisors, and those interested in flexible schedule and benefits.

Putting an emphasis on recognition

"You can't disregard money and bonuses, but it's not the only driver in retention," Tucker says.  Often, feeling valued and recognized is considered more valuable than raises on staff satisfaction polls.

To address this need for validation, some companies are turning to software that encourages recognition from managers, supervisors, and colleagues. The market's interest in such products is heating up. In fact, SAP (SAP) acquired SuccessFactors, a business software company, for $3.4 billion in November 2011, and in December, Salesforce (CRM) gobbled up Rypple, a Toronto, based start-up that develops employee engagement software.

Cappelli attributes the increased interest in this software to the fact that many HR departments have been gutted, leaving people to perform and oversee these functions.

To be sure, recognition software is no cure-all, says HR expert Roberta Matuson, author of Suddenly in Charge: Managing Up, Managing Down, Succeeding All Around. All too often, the outgoing, popular staffers who toot their own horns are rewarded, and the hard-working, low-key employees that do the behind-the-scenes legwork are ignored.

Retaining employees involves compensating them fairly, providing opportunities for growth, investing in their development, and making them feel valued.  Recognizing their efforts is only one piece of the puzzle, Matuson says

David Stein, co-founder of Toronto-based Rypple, agrees saying, "Software can play a strong role as part of a broader program. Recognition in itself can have an impact on maintaining your top 10%." Moreover, Stein says the overlooked, nose to the grindstone worker is often recognized in ways they never were before.

SunRun, a 150-employee residential solar company based in San Francisco, introduced Rypple's software to recognize its staff's accomplishments and set future goals, says Tom Asher, the company's director of customer care.

Rypple functions like a Facebook wall, allowing staffers to post thank-you notes and other pieces of recognition for all employees to see. Recently, Asher posted a thank-you note on Rypple to recognize an employee who made a customer presentation. Most Rypple feedback is distributed to the entire staff, though users can also send personal messages. And managers can track positive feedback over the course of a year for each employee.

Just like the 'real thing'?

But Asher also sees the limitations of offering gratitude via software. "Nothing is better than doing this face-to-face. There's no substitute for having a meeting," he acknowledges. Since SunRun doubled its staff during the year, and everyone is consumed with projects, face-to-face interactions have become less common.

After software company Symantec (SYMC) acquired Veritas Software in 2005, which more than doubled its staff from 6,500 to 14,000, it faced a very competitive environment. As the company expanded, their Silicon Valley competitors began to court their staff. Working with software developer Globoforce, Symantec introduced Applause that year to boost employee recognition throughout the company and particularly target its top 15% performers, explains Jennifer Reimert, a vice president at Symantec.

Using Applause, Symantec staff can congratulate colleagues who go beyond their job description (in a good way) or introduce novel ideas. Staffers can also suggest that their coworkers receive rewards of $25 to $1,000 for these jobs well done. Only the higher level rewards require a manager's approval.

Reimert says this recognition resonates deeper than a person-to-person thank you. In 2011, 81% of Symantec's staff received some monetary award through Applause.

But if more than three quarters of Symantec employees are receiving kudos and modest bonuses, how does that keep the top 15% happy? Reimert argues that recognition is only one tool to hold on to top performers, among other things like training and coaching.

There are no guarantees that recognition software actually will do much.  Many employees see this feedback as "not authentic," Cappelli says. And some think that these digital pats on the back are only happening "because software triggered my supervisor to respond," he says.

Regardless, companies that pay no attention to the departure of their top 10% may pay a price in 2012. "They're putting themselves in a position to lose valuable talent," says the American Productivity and Quality Center's Tucker.  "Maybe they'll go to a competitor. They're losing knowledge and relationships, and it takes money to recruit a successor and train them."

Editor's note: A previous version of this story incorrectly stated the year in which Symantec acquired Veritas. 

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