Employee Recognition: Act Now, or Else
It’s time to stop checking the “recognition box” with gift cards and company swag.
Proper employee recognition is a powerful tool that organizations simply aren’t leveraging to the best of their ability. Effective recognition programs improve critical issues such as poor employee engagement, declining employee happiness and satisfaction, high turnover, mediocre performance, and an uninspired company culture. And on the flip-side, what happens when these problems are improved and corrected? Employee productivity increases, customer satisfaction soars, and most importantly, your company’s business improves (more revenue and higher profitability).
Employee recognition has the ability to simultaneously improve two major functions of people operations, employee experience and company performance. More details and stats are available in our “Meaningful Recognition Buyers Guide,” grab a copy here.
Please understand, there is and will continue to be a quantifiable price to be paid for not having a recognition program in place. Worse yet, ineffective recognition programs create an atmosphere of distrust and negativity. So why is recognition such a powerful tool?
1. Great employee recognition drives your bottom line:
We’ve already begun to touch on this topic: higher employee engagement equals greater company profits. Recognition plays an enormous role in improving your engagement scores. OfficeVibe released a study titled the “State of Employee Engagement,” which highlights the 10 key attributes that determine employee engagement. Recognition tops the list at number 1. Employee recognition also facilitates improvements in 6 of the 9 remaining key metrics (like the employee’s happiness levels, relationships with managers and colleagues, and more).
According to Bersin by Deloitte, companies with meaningful recognition can expect a +14 percent hike in employee engagement rates. Why is that important? Gallup reports that companies with higher employee engagement scores yield twice as much customer loyalty (measured in customer NPS scores) and perform 20 percent or better in annual revenue than their disengaged competitors. To put this in perspective for you, a company doing $100 million in revenue will see an increase of $20 million in just one year!
Deloitte goes on to share that effective and consistent employee recognition improves turnover by 31 percent. Earlier this year, Huffington Post released this article highlighting the cost of employee turnover. A company with 150-employees and 11 percent turnover can save more than $500,000 when turnover rates are reduced by that extra 31 percent. And a company with 1,000-employees would save more than $10 million! That’s justification enough to put a good amount of time, energy, and money into your organization’s recognition program.
2. Great employee recognition builds trust and enhances workplace relationships:
“The Human Science of Giving Recognition,” a study done by The Maritz Institute, found that recognition is fundamentally rooted in our emotional needs as human beings. Did you catch that? Recognition is fundamentally rooted in our emotional needs. Recognition plays a necessary role in building trust, delivering fair expectations, and creating authentic communication which are all essential to creating an environment of social connectivity. We can all relate to this. From a social perspective, we need to know that we are valued. We want to see that everyone is held to the same standards and no one has an unfair advantage. Most of all, we need to trust those around us.
For this reason, recognition programs require proper expectations and clear guidelines. Clear communication of why people are rewarded and what will be received develops trust and establishes fairness. Knowing that outstanding efforts won’t go unnoticed is part of those principles, and receiving recognition in real-time (whether verbal, or as a physical gift or reward) creates opportunities for open, authentic feedback and communication. In the end, recognition lets people know they’re doing a good job and establishes a clear benchmark on what performance means to the organization.
How can you get started?
Effective recognition programs should model your company’s mission and values, and reflect the culture, vibe and spirit of your workplace. Make sure that you and your team are thinking clearly about what you’re setting out to achieve through your investment in recognition (what do you want to get back from employees, how will you track changes in their performance, retention rates?). Really dig in deep to articulate what your company stands for, and select forms of recognition that reinforce and support your mission. For more on the subject of understanding company culture, check out “Your Company’s Culture is Who You Hire, Fire, & Promote” by Dr. Cameron Sepah.
Next, decide how you’ll recognize. Determine the core behaviors, actions, or milestones that your employees should achieve or demonstrate to earn rewards. Some employee actions deserve rewards to commemorate the achievement and to further reinforce behaviors, a great time to consider rewarding with Blueboard experiences. This might be when employees go above and beyond in their role, achieve notable career tenure, or refer a high-quality candidate to your recruiting team. In other situations a simple verbal “thank you” and acknowledgment of your appreciation can go a long way, for example when an employee delivers a project ahead of schedule or helps to cover for another coworker during their vacation. When it makes sense, make it public: consider giving public recognition through company newsletters, communication channels like Slack, or at company all-hands meetings.
Our favorite green ogre said it best: “Employee recognition is like an onion…it has layers.” Effective recognition takes proper understanding of your employees on a personal level, requires a transparent setting of expectations, a mix of obtainable and stretch rewards, program visibility, clear metrics for success, and continual iteration. My best advice: start today, be authentic, and never stop developing and evolving your recognition programs based on employee feedback and results.
For more information on Blueboard contact me directly at firstname.lastname@example.org or connect with me on LinkedIn. I’d love to hear your view on employee recognition, let’s have a conversation in the Comments section below.
Until next time!