Recognition in the workplace is one of the strongest motivational tools available to employers. Almost 70% of employees say they would work harder if they received due recognition.
Regardless of statistics, many employers aren’t willing to invest sufficient time and effort into recognition tactics. That’s one of the reasons why 39% of employees report a lack of appreciation at work.
With the right approach to employee recognition, it’s possible to increase productivity, decrease turnover, boost morale, streamline retention, prevent burnout, and much more. Let’s take a closer look at why employee recognition is important and what you can do about it.
Employee Recognition and Employee Engagement
Employee engagement is a combination of enthusiasm, involvement, and commitment to work. Investment in employee engagement has a direct effect on the company’s bottom line since it:
- Increases productivity
- Improves work quality
- Boosts employee satisfaction
- Retains talent
Employee engagement efforts foster the feeling of employee belonging. Today, 79% of companies agree that the sense of belonging is important to their success but only 13% of them are ready to do something about it.
Low engagement can occur due to a variety of factors, including insufficient opportunities for professional development, lack of communication, and poor company culture. However, engagement suffers the most due to a lack of employee recognition.
Accordingly, employee recognition has a direct effect on your company’s success. It becomes even more important amidst The Great Resignation crisis when retaining top talent is turning into a serious challenge.
The Benefits of Employee Recognition
Once you implement strong employee recognition tactics into your HR strategy, you can take advantage of these important benefits.
Healthy Company Culture
Strong company culture has a direct impact on your ability to find and retain top talent. Almost 50% of job seekers admit that company culture is a highly important factor that affects their decisions. Meanwhile, 71% of employees are willing to exchange a pay cut for working at a company with a mission and values similar to theirs.
Employee recognition is essential to building a healthy company culture, where employees have a sense of belonging and feel appreciation for their work. When their efforts are recognized, workers consider the company a positive part of their lives. This boosts company culture tremendously.
Lower Turnover and Higher Retention
While the country is struggling with the Turnover Tsunami, employee retention is on top of the agenda for companies across all industries. The costs of turnover in the United States are reaching $1 trillion a year.
As all businesses are trying to streamline their retention efforts, only a few focus on employee recognition. Meanwhile, better recognition is the key to lower turnover since it gives your team members an elephant-sized reason to stay with the company.
Higher Productivity
Appreciation is a strong driving force behind productivity at work. When employees feel that their efforts are recognized, they are more willing to continue improving them. According to a recent study, 92% of employees are more likely to repeat a specific action after receiving recognition for it.
Employee recognition has a significant ROI. Low-cost recognition efforts can lead to higher productivity and bottom-line improvements.
Even if a third of your employees increase productivity due to recognition efforts, your company is likely to feel a significant difference.
Better Morale
Employee morale and happiness often get overlooked. During the COVID-19 pandemic, employers had to focus on keeping companies afloat, ignoring the signs of low morale and burnout. This turned into one of the key reasons behind the Turnover Tsunami.
According to an Oxford University study, happy employees can be 13% more productive. Meanwhile, happy sales reps can increase sales by 37%.
Morale and well-being are key to higher productivity, lower turnover, and a better workplace environment. Employee recognition has a direct effect on the level of morale and happiness without significant expenses.
In fact, 70% of employees say that motivation and morale would improve greatly if managers simply said “thank you” more often.
Easier Recruitment
Improving employee recognition is a huge step toward making your company an employer of choice. Healthier company culture, happy employees, and excellent workplace relationships have a tremendous effect on jobseekers’ decisions.
When you implement employee recognition programs, you paint a more exciting picture of your company. Even if your salaries aren’t highly competitive, top-notch recognition can become a deciding factor that sways top talent your way.
As millions of Americans are looking for new employment opportunities, recognition efforts can keep your company on the market without significant investments.
Fewer Sick Days
Burnout is a serious problem that leads to high turnover rates. When employees don’t feel good emotionally and socially at work, they are more prone to burnout. According to Stanford research, burnout leads to 120,000 deaths every year.
People who face burnout at work are 2.6 times more likely to leave their current place of employment and 13% less confident in their performance. They are also taking more sick days.
Employee recognition can improve well-being and mental health while keeping employees happier at work. It can point them in the right direction and boost their sense of belonging. As a result, your workers can focus on what they do best and avoid burnout.
Stronger Loyalty
Employee recognition tactics can foster company loyalty. This doesn’t just reflect on your retention rates. Loyal employees become your brand ambassadors. They help make your company an employer of choice and give valuable assistance with passive recruitment.
Loyalty allows your employees to make your company an integral part of their lives. This motivates them to improve productivity, work on professional growth, and support other employees.
Loyalty is a direct engagement factor. The tactics you implement to drive loyalty can help with improving engagement and boosting productivity.
Employee Recognition Ideas
Many employers mistakenly believe that employee recognition begins and ends with money. However, many employees are willing to exchange higher salaries for open recognition, appreciation, and acknowledgment.
If you are thinking of revamping your approach to employee recognition, you can take advantage of these ideas for employee recognition programs.
Leverage the Key Elements of a Successful Employee Recognition Program
When you are designing or redesigning your employee recognition program, keep these elements in mind:
- Timely recognition – You need to focus on each employee’s achievements separately and provide recognition as soon as possible. Along with evaluating teamwork and the overall effect on the company’s success, pay attention to specific individual recognition.
- Variety – A diverse approach to recognition can make it more effective. Stability in recognition may work great, but the element of surprise works better. It can keep employees excited about incentives, thus improving workplace morale.
- Core company values – Core business values are an integral part of any recognition program. Employees should have a clear understanding of how the company rewards their alignment with core values.
An employee recognition program doesn’t have to be complex. Even the simplest low-cost tactics can yield immediate results.
Involve All Levels of Management in the Recognition Program
It’s imperative to involve all management levels in the recognition process. According to Gallup, the most memorable recognition comes from:
- Manager- 28%
- CEO – 24 %
- Manager’s manager – 12%
- Peers – 9%
While peer-to-peer recognition may not boast the same figures as manager recognition, it’s still a highly effective incentive. Spoken and written appreciation from coworkers can sometimes mean more to employees than salary increases.
In fact, peer-to-peer recognition is over 35% more likely to have a positive financial impact on your business than manager-only appreciation.
Don’t Focus on High-Cost Recognition
Everyone has heard that “best things in life are free.” While it’s hard to build an employee recognition program without financial support, it’s possible to do it without sizable expenses.
According to McKinsey, appreciation from the immediate manager is more motivating than performance-based bonuses. A simple “thank you” can go a long way toward increasing employee productivity.
Low or no-cost employee recognition examples include:
- Thank you sticky notes
- Free lunches
- “Employee of the week (month, year)” posters
- Thank you letters to employee spouses, partners, parents, and children
While substantial incentives can work better for some employees, the majority is likely to be happy with simple tokens of attention.
Ask for Feedback and Listen to It
The simplest way to learn what employees need and how they want to be recognized is to ask for their opinion. When you consider and implement your employees’ opinions into the work process, it’s a huge recognition gesture.
Find out how your employees prefer to be recognized. For some of them, public recognition may not work. Others would prefer a public “thank you” to private monetary bonuses.
Employee Recognition Matters More Than Ever
As American businesses are struggling with The Great Resignation and fierce employer competition, employee recognition is more important than ever. By boosting recognition efforts, you don’t just improve your company’s bottom line, you position yourself as an employer of choice.
Building effective employee recognition programs doesn’t have to be hard or expensive. Recognition is a combination of a humanized and family-like approach to your team complemented by motivation and incentive.
Would you like to streamline your employee recognition program with a comprehensive HR tool? Schedule a free demo today.