Corporate Spotlight: Full-Time Recognition

How much recognition is too much? For David Williams, CEO of Lanham, Maryland-based Merkle Direct Marketing, the answer is clear: No amount is excessive. Over his 16 years as chief executive at database marketing service provider Merkle, Williams has fostered a working environment that ensures that his 700 employees' contributions are identified and publicly acknowledged.

"Our incentive program has really been evolving since the company was founded," Williams says. "We see incentives and recognition as part of our culture. It's one of many dimensions of building a great company."

Of course, any executive can pay lip service to the importance of thanking workers. But Williams backs it up: He sits on the committee that handpicks winners of the company's top awards; he hosts a monthly birthday lunch for staff at all levels; and he gets concerned when employees aren't giving each other kudos on a regular basis.

Until a few years ago, Merkle's top honor was the "Merkled" Award. It still exists, and is bestowed on the employee who best embodies the company's three core values—the desire to succeed, learn and serve. But in 2000, Merkle executives decided to add the Chairman's Award. "The Merkled Award is really about culture," Williams says. "The Chairman's Award goes to the employee who has the biggest impact on the company in that year, period."

It might seem that such general criteria would make selecting a winner difficult. According to Williams, that's because it is difficult. He leads a 20-person committee that spends weeks poring over and discussing the merits of peer-submitted nominees for the award.

"It takes us weeks of going back and forth to pick the right person," Williams says. But he believes the payoff is worth the effort. "We really want to make sure we're showcasing the best talent we have. It forces long dialogue about the impact of individuals. It's how we understand who our 'A's' are."

Janice Clerkin, a director in the company's professional services group, won this year's Chairman's Award. Like the four employees who won in prior years, Clerkin received the honor and accompanying prize, a two-year lease on a BMW, at Merkle's annual State of the Union dinner.

According to Williams, the committee selected Clerkin because she led a team that was charged with addressing major challenges with a few core clients, and she did so successfully.

"Janice is a wonderful asset to us," he says. "As marketing strategy changes, we need to be able to drive the implementation of those changes with our clients. We'd never had one individual doing so much with so many key accounts."

It's a testament to the level of communication between Merkle's executives and employees like Clerkin that she shares an understanding with Williams of why she deserves the award.

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PROGRAM AT A GLANCE
COMPANY INDUSTRY PROGRAM TYPE OBJECTIVE STRATEGY & EXECUTION RESULTS	Analytical Graphics Inc.

"Last year I was involved with more than one account in the different industries we work with, and I worked on some large-scale implementation of big new projects," she explains. "There was a high level of complexity, a breadth of responsibility, and a lot of work and juggling required."

Clerkin says her motivation to achieve comes from within, but acknowledges that as the year winds down, the possibility of winning the Chairman's Award is on her mind. And she says that just the fact that it exists colors her perception of her employer.

"It's a cultural benefit that's sort of hard to measure," she says. "Inherently you feel good about the company because they recognize employees regularly." She adds that her colleagues and clients often ask her about the award—people she hardly knows want to hear what it feels like to win the company's top honor.

At the same dinner where Clerkin received her new car, 20 employees were recognized publicly for their service, in other categories including technical excellence, unsung hero, outstanding client management and rookie of the year.

Merkle also recognizes workers on a more regular basis. At each monthly companywide meeting, the senior vice president of human resources, Dale Hogg, names an employee of the month. And, perhaps more notably, employees can honor each other at any time with a Merkle Star. The honoree receives a paper certificate to display on his desk and a $25 credit to be spent at the company store for items like umbrellas, mugs, pens or apparel. The prize may be small, but Clerkin says the Merkle Star program can be a big motivator for her and her colleagues.

"I think it's important that you can receive other awards [besides the big ones] that are immediately given to employees, but announced publicly as well," she says. "I like being able to thank someone for helping me on a project."

Williams leaves the awarding of stars entirely up to employees; there is no approval process for honoring a peer, and no limit on the number of stars that can be given out. In fact, Williams says he gets concerned when the amount of recognition slips.

"We measure how many we're giving out," he says. "If the number is low, we'll try to find out why there is less of this activity going on. We address it as a management team, try to be more aware of the hours people are working and the anxiety they may be having at work. It's a great tool to keep track of our organizational dynamic."

The company also has made a commitment to employees' continuing education. Everyone, even Williams, is required to earn a certain number of credits annually through Merkle Institute of Technology, or MIT. Workers can earn credits by attending or teaching a class. The school offers courses in categories ranging from nutrition to investing to computer programming. Most classes are taught by Merkle employees.

Merkle does not have the flashiest incentive program with the most mouthwatering prizes. And while many of today's initiatives use complex performance tracking methods and catchy teasers, this company motivates employees with a system that appears a little old-fashioned. But it apparently works: Merkle has experienced 22 percent compound annual growth over the past 10 years, and its turnover rate for 2003 came in at 19 percent—a healthy number, according to the company.

The reason it works, Clerkin says, is because the reward program is consistent and deliberate: "It's in the air as far as how you feel about the organization," she says. "You feel like the company is paying attention to your contribution."