The importance of employee recognition is impossible to ignore. Over 80% of employees say that with due recognition, they would work harder. Meanwhile, recognized workers are six times more likely to stay at their current jobs than those who aren’t.
Amidst The Great Resignation, recognition is becoming essential to employee retention and satisfaction. Many companies believe in the effectiveness of recognition programs. However, only a few of them implement strong appreciation tactics.
Employee recognition doesn’t have to be an expensive strategy. With the right approach and recognition tools, it’s possible to create a successful program without hurting the budget. Let’s take a closer look at how to do it.
5 Common Employee Recognition Mistakes
According to an SHRM survey, 80% of companies have employee recognition programs. However, only one-third of U.S. workers believe that they are duly recognized. Why the discrepancy? The quality of recognition efforts is rarely satisfactory.
The common mistakes business owners and HR managers make with recognition are:
1. Focusing on the Money
Many HR decision-makers mistakenly believe that money is the best way to demonstrate recognition. In reality, money is a great incentive, but only for work that can be measured quantitatively. For example, cash can help increase sales and productivity levels.
When it comes to complex and creative jobs, employees crave other types of recognition and rewards, such as a thoughtful gift, public acknowledgment, and a simple “thank you.” In fact, according to studies, 65% of employees prefer non-monetary incentives.
By mistakenly believing that cash is the best recognition tactic, many companies end up cutting their recognition programs since they are too expensive to maintain.
2. Leaving Employees Out
Recognizing top-notch employees works great. However, if the same people continue getting signs of appreciation, the rest of the workers may feel left out. According to Gallup, only 26% of employees agree that they receive the same recognition as others.
Eventually, these people become disengaged and unmotivated to improve their performance.
To battle this problem, you can:
- Increase the number of recognition options (don’t just reward the best player but recognize the second and third best workers as well).
- Increase the total number of recognitions.
- Rely on recognition software to avoid reward inconsistency.
A successful employee recognition program includes everyone who contributes to the bottom line of the company. Unless workers are making serious mistakes, their effort should be recognized, appreciated, and rewarded.
3. Insufficient Emphasis
The success of employee recognition programs depends on their transparency. Your employees need to have a clear understanding of when, how, and for what they will be rewarded.
If the recognition process is hard to comprehend, your employees could start believing that you favor some workers over others for no apparent reason.
It’s up to the HR managers to explain how the recognition and reward systems work in the company and what employees can do to take advantage of them.
4. Not Making Public Statements
Sending a direct email to say “thank you” can work well. However, public recognition can provide much better benefits. When you recognize the employee’s success publicly, you increase the effectiveness of your actions tremendously.
Implementing public recognition into your program can involve such steps as:
- Adding announcements to the company’s social feed.
- Hanging “employee of the month” portraits in the office.
- Thanking the best employees at corporate events or daily meetings.
A simple “thank you” can go a much longer way if the entire office hears you say it.
5. Ignoring Peer Recognition
According to a Gallup survey, 9% of workers cited peer recognition as the source of their most memorable recognition. While CEO and manager recognition received higher scores, ignoring peer-to-peer recognition leaves out a great opportunity to show appreciation.
Allowing employees to chime in via an email message or a social recognition platform helps you reinforce your recognition program, strengthen the workplace environment, and improve teamwork.
By the way, team appreciation is also an important part of your recognition program. More than 74% of employees whose teams receive praise start feeling that they are doing valuable and useful work.
The Upside of Great Employee Recognition
Why do people crave recognition? When any person receives praise for something they do, the brain releases three chemicals, dopamine, oxytocin, and serotonin. These chemicals don’t just make a person feel good. They drive performance.
The main benefits of employee recognition include:
- Better engagement – Recognition is the easiest way to boost engagement. However, to maintain high engagement, it’s important to provide recognition regularly.
- Higher productivity – When employees feel appreciated, they become more productive. If you offer public appreciation, it can also serve as an incentive for other workers to improve productivity.
- Improved retention – Employees who feel happy, engaged, and appreciated in the workplace aren’t likely to search for another place of work or become targets for passive recruitment.
- Higher morale – Appreciated employees are happier employees (remember dopamine and serotonin?). Better mood leads to higher morale and a more comfortable work environment.
- Positive workplace culture – A well-crafted recognition program can demonstrate that company values align with employee values. This contributes to higher engagement and better workplace culture.
Here are a few telling stats that demonstrate the importance of a great employee recognition strategy:
- A strong employee recognition program can decrease the turnover rate by 31% (Bersin & Associates)
- 37% of employees believe that the best way to improve engagement is for managers to give them due recognition. (SHRM report)
- 35% of employees who plan to leave their jobs cite lack of recognition as one of the key reasons behind their decision. (Pew Research)
- Recognition can increase employee engagement, productivity, and performance by 14%. (Deloitte)
- 83% of HR leaders believe that employee recognition programs benefit company values while 85% say that they have a positive effect on the company culture. (Hero & Mercer).
In short, building a strong employee recognition strategy can have a substantial effect on the company’s success and revenue.
What a Successful Employee Recognition Program Looks Like
To achieve the abovementioned benefits of the recognition program, it needs to have the following elements.
Structured or Unstructured Program
Depending on your company’s values, goals, and resources, you can consider implementing a structured or unstructured recognition program.
Structured
The program you implement needs to appreciate deserving employees in a specific and timely manner. To ensure success, you need to create a clear and transparent recognition structure, which includes:
- Behavior that triggers recognition
- Timeline for recognition
- Tools for recognition
For example, an employee secured a high-paying client (behavior). When this happens, the company demonstrates appreciation within two days (timeline) by taking the employee out for a free lunch (tool).
Managers need to be careful not to miss triggers or deadlines. Otherwise, recognition becomes less effective. To avoid such mistakes, some companies prefer using comprehensive employee recognition platforms that automate part of the process.
Unstructured
Unlike a structured program, this particular strategy is more relaxed and flexible. Instead of implementing strict rules that tell your employees exactly what they can be recognized for, this program allows you to reward workers for a variety of things at any time.
This type of recognition usually appears more personalized and genuine. However, it comes with a certain inconsistency which may leave some workers out.
For example, you could reward an employee for a proposed idea during a videoconference. While this can certainly boost an employee’s morale, it may be hard to stay consistent with such rewards during future conferences.
The best employee recognition programs use a combination of structured and unstructured approaches to boost personalization, leverage the element of surprise, and improve engagement
Useful and Desirable Awards
When you demonstrate recognition by awarding your employees, the awards need to be both useful and desirable. This involves learning what your employees need and want the most. For example, someone may appreciate a free fitness membership while another employee can benefit from an Amazon gift certificate.
By adding personalization to the recognition process, you are multiplying the effect of the appreciation strategy.
However, there is a delicate balance between personalized rewards and value inconsistency. You need to make sure that the value of the gifts is similar.
The Right Budget
While monetary rewards aren’t the only way to show recognition, an employee recognition project still requires a budget. The strategy you choose depends on the amount you can allocate for this program.
Since a recognition program has numerous benefits, investing in it can have an impressive ROI. However, overspending isn’t necessary. Low-cost award options can be just as effective as sizable bonuses. For example:
- Coffee shop gift cards
- “Thank you” emails
- Reserved parking space
- “Employee of the month” posters and certificates
- A dedicated social media post
- Breakfast with the CEO
- Lottery tickets
Overall, when you set a budget for your employee recognition program, make sure it doesn’t have a negative effect on your company’s operations.
Need Help with Your Employee Recognition Program?
A high-quality employee recognition program can have a tremendously positive effect on your company’s bottom line. Appreciation efforts drive retention, improve employee morale, increase productivity, and much more.
To create a successful employee recognition program, you need to set the right budget, study your employees’ needs, and choose the most effective structure. One of the ways to ensure the success and consistency of your program is to use a comprehensive employee recognition platform.Refresh offers an effective recognition solution that helps you create a successful program, encourage peer recognition, source feedback, create personalized awards, and much more. To see it in action, reserve a free demo today.