Lack of recognition at work is among the top reasons your employees look for another job. Despite this, many companies fail to recognize employees outside of performance reviews and annual years of service awards that leave team members feeling unappreciated day-to-day.
But there’s a huge upside to this morale crisis: employees who feel valued work harder and stay longer. And companies that distinguish themselves by running effective employee recognition programs are better at retaining top talent — and customers. According to Aon Hewitt, a 5 point increase in employee engagement is linked to a 3 point increase in revenue growth the following year.
What can your organization do to keep top performers motivated and make sure every employee feels appreciated for their hard work? It starts with building a culture of recognition. Let’s explore the benefits of emphasizing employee recognition in your organization.
What is employee recognition?
Practicing employee recognition means that your organization regularly and visibly acknowledges the hard work of employees. Employee recognition programs honor ongoing achievement and contributions, both formally and informally. Recognition can take a variety of forms, and it should consist of both frequent social recognition and tangible employee rewards, like prizes and bonuses.
Effective recognition programs create a culture where leaders and colleagues regularly celebrate each other’s excellence and encourage top performance. This in turn motivates your employees to work harder and stay with an organization that clearly values their contributions and treats them well. It’s a win-win for everyone at your company.
Why employee recognition matters
Employee recognition is the mark of a healthy organization. Let’s examine a few of the benefits frequent employee recognition brings to your team and to your business, informed by key statistics from Achievers’ Engagement and Retention report.
- Recognition is the primary driver of employee engagement. It lets employees know they matter and their work is visible and valued, leading to gains across the organization in the form of better retention rates, improved employee productivity, and other positive effects.
- Frequent recognition improves relationships and communication between employees and managers. Research tells us that employees leave managers, not companies. In fact, 46 percent of employees only feel “moderately” valued by supervisors, while 30 percent feel “not very” or “not at all” valued. Requiring managers and other leaders to provide regular feedback and praise for good work helps your entire team succeed and reminds managers to focus on the value of recognition.
- Employee recognition is contagious and often reciprocated. Recognition programs encourage employees to publicly acknowledge each other’s contributions on a company-wide newsfeed. This in turn strengthens relationships across teams and the entire organization. Currently, 53 percent of employees only feel “moderately” valued by colleagues.
- Recognition improves employee productivity. Ninety percent of workers say when they receive recognition it motivates them to work harder. Organizations that consistently and frequently recognize employees in meaningful ways see the results in their bottom line, including improved stock prices and NPS scores.
Demonstrating these benefits to your organization’s leadership is a necessity for starting an employee recognition program. Emphasizing how employee recognition programs contribute to long-term success is a great way to get executives on board with recognition.
How to start practicing employee recognition
Great news. Your leadership supports initiating an employee recognition program. Now it’s time to set yourself up for success. Let’s take a look at proven methods for building a successful employee recognition program.
Recognize your employees early and often
Don’t wait to recognize employees until an achievement is a distant memory or save appreciation for the private setting of a one-on-one meeting. Recognition should be given regularly and immediately. Research shows that 75 percent of employees who are recognized at least monthly report that they are satisfied with their jobs and 60 percent want to be recognized more frequently than they are. Create a culture of recognition by praising good work in real time across multiple channels of communication, where everyone can see it and is encouraged to join in. Express appreciation for leaders and colleagues who regularly practice recognition as well.
Understand that employees crave social recognition more than money
While employees definitely appreciate financial rewards, career goals and social needs often mean more. According to Harvard Business School researcher Amy Whillans, “Cash matters in people’s lives, but it’s not all that matters. What really matters in the workplace is helping employees feel appreciated.”
Employee recognition also improves workplace culture, manager performance, and customer loyalty. Recognizing employees promotes behavior that exemplifies company values, and employees will be motivated to repeat that behavior. In fact, 92 percent of workers agree when they’re recognized for a specific action, they’re more likely to take that action again in the future.
Social recognition can be a part of each employee’s daily work experience. To accomplish this, executives should communicate the importance of recognizing employees and lead by example. You can also create fun campaigns to boost the frequency of recognition, like those held during Employee Appreciation Week and Cox Automotive’s annual Spark Week. Spark Week included auctions, contests, and team scavenger hunts. It resulted in 3.2 times the usual number of daily recognitions and led to a high level of participation across business units.
Build a business case for recognition
You can roll out a recognition program quickly, but it may take time to measure the business effects. This means it’s critical to establish the business case for recognition in advance to obtain sufficient buy-in from leadership. Emphasize the proven benefits of recognition, and also show that you have a plan for implementing your recognition program with measurable goals and a platform that fits your business.
Measure the success of your employee recognition programs
You’ve recently started to implement an employee recognition program. How can you tell if it’s achieving the desired effects? The first step is setting goals for key metrics. You’ll want to target and measure things like activation rates, recognitions sent and received, and the number of leaders participating. You can use pulse surveys, together with focus groups and other tools, to track employees’ changing perceptions of recognition in your organization.
You’ll also want to see if there are improvements in key business areas such as retention, culture, customer satisfaction, and profits over time, as well as other goals specific to your business. Recognition breeds engagement, and Aberdeen Group data shows that companies that implement employee engagement programs see a 26 percent increase in annual revenue. Exploring correlations between your recognition program and your bottom line is the best way to demonstrate its continuing business value to leadership.
Try a point system
Allow employees to tailor their rewards to suit their own preferences by using a point system. By allowing employees to earn points and redeem them for rewards, a point system makes those rewards more meaningful and demonstrates that each team member is unique. Organizations that have implemented a point system have experienced a significant improvement in sales, customer satisfaction, and voluntary attrition.
A point system makes managing employee recognition easy for even the largest organizations, as shown by Scotiabank’s recognition program, Applause 2.0. Scotiabank has 90,000 employees who serve 23 million customers worldwide. In order to keep the momentum going with their employee recognition program, Scotiabank decided to build a 2-week campaign to create excitement in the workplace. The campaign, named Pay it Forward, encouraged employees to view each received recognition as an opportunity to pay it forward and recognize another peer. To further empower employees during the campaign, individual contributors, who typically only have access to non-monetary recognition, were given access to points to award. Employees were able to redeem accumulated points for a variety of rewards. A domino effect shortly followed after the campaign launch and the results were extremely positive, with over 47,500 Pay It Forward points-based recognitions sent across the platform.
Choose the best employee recognition software
Whether you’re communicating by email, intranet, Slack channels, or video, the workplace is increasingly digital. Your employee recognition program should follow suit. Employee recognition platforms can help you track the success and adoption of your initiatives and analyze the results. They can also integrate with your other business tools and amplify the effects of recognition across the organization.
As you evaluate platforms to support your employee recognition programs, consider the following factors:
- Does it have security certification, to protect your employees’ private data?
- How well does it integrate with your existing HR systems, so staff can work seamlessly across enterprise applications from Outlook to Workday and WeSpire?
- Does it provide real-time reporting, so you can easily measure KPIs, such as program adoption and activation rate and monthly recognitions sent and received, and track your budget?
- Does it provide social recognition to showcase employee accomplishments and encourage alignment with company values?
- Finally, don’t forget an enjoyable user experience with mobile-friendly design! A platform only works if your employees actually use it. Recognizing great work should be delightful, not dispiriting.
For more criteria on evaluating employee recognition software, consult the checklist in our Buyer’s Guide to Recognition Software.
Successful employee recognition programs: General Motors
When designing your employee recognition program, you don’t need to start from square one. There are many companies that have successfully navigated the path to creating a culture of recognition, and it makes sense to examine them and see how their examples can guide your own approach. For instance, General Motors’ (GM) program is a real-world demonstration of the positive effects of employee recognition.
GM was in the midst of a global transformation, a company with over 160,000 employees spread across six continents determined to accomplish ambitious new goals. How would they align so many geographically dispersed people and deliver on their vision to create a world with “zero crashes, zero emissions, and zero congestion”? The answer was the GM Recognition program, powered by Achievers.
GM set target metrics for employee participation and rapidly exceeded them with a 97 percent activation rate. Furthermore, 7 out of 10 employees continue to participate actively, sending and receiving social and points-based recognition using a friendly recognition dashboard and mobile app. Today 8 out of 10 managers share recognitions monthly, with an average of 4 recognitions each month. Since launching the GM Recognition program, GM has received over 5000 positive comments about the program and how employees felt more appreciated and valued in the workplace. Creating a culture that recognizes work well done gives GM’s employees much to be grateful for.
Realize the benefits of employee recognition
Now that you know the importance of recognizing employees, you need to start building a culture of recognition in your organization. Achievers Recognize can help you jumpstart that process. It features social and points-based recognition, a friendly user experience, a company-wide newsfeed, digital celebration cards, and mobile-friendly options.
Recognize is also designed to integrate with the tools your organization already relies on. The platform provides detailed metrics, so you can analyze how your program is working and what aspects need adjusting.
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