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Kevin Nakao and Travis Pearl of MeritShare

Technology companies are pulling out all of the stops to recruit talented engineers, designers and developers. But that’s only part of the problem. While many companies spend countless hours finding the best and brightest minds, they often forget that they also have to work hard to retain the people they’ve worked so hard to locate in the first place.

Meritshare, a three-month-old upstart created by former WhitePages execs Kevin Nakao and Travis Pearl, is setting out to help in those retention efforts by recognizing and rewarding companies’ top performers.

“If you brought all of these people in, why not put some effort on retention,” explains Nakao, the former president and COO at Seattle-based WhitePages.

The Wall Street Journal recently reported that companies spend more than $20 billion each year on recognition and rewards programs, everything from toasters and golf bags to achievement pins and trophies for those who stay with a company for 5, 10 or 15 years.

However, according to a study by Globoforce, 50 percent of workers aren’t satisfied with the level of recognition they get at work.

Meritshare thinks there’s a big opportunity to shake up the industry, which is led by established players such as O.C. Tanner and Terryberry as well as new entrants like’s recently launched and Achievers.

Furthermore, Nakao said that 85 percent of companies still use service-based awards, meaning the recognition is tied to one’s tenure of service.

“That’s great, but it doesn’t really connect anybody to performance or the values of the company, and reinforce the things you want to see in people,” said Nakao, adding that once someone earns the recognition they have to wait a long time for the next step.

With Meritshare, Nakao said that they are creating a way for employees across a wide variety of teams and roles to recommend someone for an award tied to specific actions within the company. Similar to LinkedIn’s endorsements, Meritshare’s awards will be publicly displayed on its Web site.

“One of the challenges with people getting rewards at work is that it is generally a private one-to-one thing,” said  Pearl. At Meritshare, he said the awards are designed to make the receiver “feel awesome” around building a team environment. They’ve also built in alerts to remind staffers to nominate co-workers.

“People generally want to recognize people, but they forget about it,” said Nakao, adding that the rewards will be tied into a point system that’s managed by Meritshare.

Meritshare is still in the process of building the product, with a launch expected by the end of the year. It plans to target companies with 10 to 500 employees, smaller than some of the established heavy hitters. It will offer products from a variety of vendors, though it plans to make its money by charging companies a monthly subscription fee rather than through product sales. Pricing has not yet been determined.

Nakao said that companies typically allocate about one to two percent of their budget to employee retention, so he thinks there’s a lot of room to grab market share.

“One of the burning questions … that executives have is: ‘Geez, is my employee engagement good or bad, and how do I tell that? This will allow them to do it because we will be able to provide metrics on how your company is doing in terms of people nominating for awards, the level of engagement of management and employees as it relates to other people in the program,” said Nakao.

Nakao said he’s excited about building a business that’s designed to help people feel good. “It’s like running an ice cream shop,” he said.

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