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White Paper: Employee Recognition

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As an organization, we have dedicated ourselves to understanding engagement.Our own internal research reveals a constant truth: recognition has a direct correlation with engagement. 

Recognition should be a balance: sincere and unique, while still playing an active structured role in your organization. Recognition programs and actions, as well as those who are awarding the recognition, should be rooted in gratitude and humility.

Through daily actions and structured programs, you can create a self-sustaining culture of recognition.

Guiding Recognition

Richard S. Wellins, co-author of Your First Leadership Job: How Catalyst Leaders Bring Out the Best in Others, states, “[Recognition is] so simple, but our research shows that one- to two-thirds of leaders are not good at acknowledging good work.” He goes on to explain that leaders often worry that praise will seem unprofessional, or that employees will become complacent or overconfident. “It isn’t and they won’t.”

A lack of acknowledgment has a direct impact on productivity: 40% of employed Americans say they’d put more energy into their work if they were recognized more often. While 50% of employees who don’t feel valued plan to look for another job within the next year.

Your employees are what make your business possible, but do they know that?

While many organizations may consider themselves too small to boast huge recognition programs and bonuses, small acts and the spirit of recognition can go farther than you think.

A study by KRC Research discovered 6 in 10 employed Americans say they are more motivated by recognition than they are money. Another study found that 83% said recognition for contributions is more fulfilling than any reward or gift.

David Novak, the cofounder and former CEO of Yum! Brands, and author of O Great One! A Little Story About the Awesome Power of Recognition believes in inspiring people through joyful, personal acts of recognition that deepen relationships. “In simply showing employees how much they are appreciated and recognizing their great work and ideas, leaders can create an energized work environment,” says Novak.

Recognition is a simple way to demonstrate to your employees the role they, and their contributions, play in moving the organization forward. This increases both their pride and sense of ownership.

“Organizations can revitalize company culture and connect people back to the company,” says Novak, “[recognition creates] a catalyst for bottom line results and widespread confidence that everyone is important in the organization.”

Recognition » Engagement » $

Engagement is on every CEO’s mind, simply because engaged workers tend to be better workers. Recognition is but a single element of engagement. Engaged workers are passionate and enthusiastic, consistently outperforming non-engaged employees. They provide better service to customers and are better teammates.

The Gallup Organization found that workplaces with high engagement levels have much higher rates of:

  • Productivity
  • Profitability
  • Customer satisfaction
  • Safety
  • Attendance
  • Employee retention

Employees with low engagement levels are linked to higher absenteeism, lower profitability, more workplace accidents, and higher turnover.

Quantum Workplace determined that hostile employees are four times more likely than engaged employees to claim that they didn’t receive enough recognition.

High engagement levels often stem from employees who feel valued. Employee recognition is one of the key drivers of employee engagement across industries and job classifications.

“Every time Roth Staffing Companies completes internal engagement surveys,” says Lori Eade, Manager of Customer Experience at Roth Staffing, “we see a direct correlation between how ‘recognized’ and valued a coworker feels and his or her overall engagement. All types of coworkers—from senior leadership to our entry-level positions—rank ‘I have been recognized for doing good work’ near the top of their workplace needs list.”

In addition, over 50% of HR Managers say showing appreciation cuts turnover, and 49% believe it increases profit.

The Basics

David Novak describes his unique recognition practices where he would give a set of wind up walking teeth to employees who “Walk the Talk.” Although unorthodox, it was iconic, personal, and relatively low cost.

Each organization and department should develop programs and practices that suit its unique team members and industry, yet there are certain philosophies and methods that remain constant, with or without chattering teeth. These include: pay increases and cash bonuses, verbal and written praise, and compassionate leadership.

  • Pay Increases & Cash Bonuses

Compensation is always a factor when it comes to employee satisfaction, and that’s okay. While most employees may prefer recognition to a cash bonus, monetary recognition is the best of both worlds. Quantum Workplace reports that approximately 60% of survey respondents ranked pay increases as one of the most important forms of recognition.

For those workplaces that have the ability to provide financial rewards to top performing employees, develop a plan to reward coworkers once they hit certain individual and/or group goals.

Pioneer of NETFLIX’s iconic company culture, Patty McCord, states, “If your company has a performance bonus plan, go up to a random employee and ask, ‘Do you know specifically what you should be doing right now to increase your bonus?’ If he or she can’t answer, the HR team isn’t making things as clear as they need to be.”

Everyone in your department or team should know exactly what will earn them those financial rewards. Transparency is key to ensuring that everyone understands which goals to strive for and how to earn rewards fairly. With a clear path towards rewards, this level of transparency can also reduce jealousy amongst teammates.

Organizations and departments with tighter budgets may have to do some rearranging to free up the cash flow required to financially reward top performers. One strategy is to poll coworkers and ask their opinion: would they rather have weekly company lunches or see that money go toward sporadic cash bonuses for top performers? Receiving feedback can guide your workplace’s recognition budget and ensure that coworkers feel like their voices are heard.

  • Verbal and Written Praise

According to the Society for Human Resource Management, Employees may feel more committed to their organization if they believe that their efforts are valued. Amongst engaged employees, 63% are satisfied with their management’s recognition of employee job performance.

Roth’s research has determined that all types of employees rank praise and recognition from their direct managers as important to their workplace satisfaction.

Be sure to encourage all types of praise-based recognition such as:

  • Verbal recognition in a group setting like company-wide or team meetings
  • Verbal praise from individual to individual
  • Written recognition via email, notes, or a recognition white board/leaderboard (either hung in the office or hosted online)

However, you do not need to pass around gold stars for every single action. Be sure to define the difference between responsibilities and accomplishments.

Nurture a culture of abundant recognition by promoting all forms of praise such as peer-to-peer, top-down, bottom-up, within teams, and across departments. Workplaces where coworkers are encouraged to praise and thank a fellow coworker often experience a self-sustaining cycle of praise and good deeds: coworkers go above and beyond to create remarkable experiences, another employee appreciates and recognizes that coworker’s efforts, and both employees are motivated to create more remarkable experiences that result in praise.

It seems so simple. Just give verbal and written praise. The truth is most employees do not receive genuine, thoughtful words of gratitude and appreciation at work. Only 10% of people say “thank you” to their colleagues on a given day, and 60% of people never express gratitude at work.

“I believe in saying ‘thank you’ daily, but making sure it is sincere,” says Accounting Director Kari Braun. “When an employee goes above and beyond, I leave them a handwritten thank you card that night so they have time to read it first thing the next morning, and I might slip in a small gift card… If we have to stay late, I buy them Starbucks and I remember what their favorite drink is.”

  • Compassionate Leadership 

According to managers, the number one reason an employee leaves a position is pay. But according to employees, it’s the manager.

If you want a workplace that is abundant in recognition, it begins with your leaders – all the way up to the tippy top. Leaders set the tone for your entire organization. They define appropriate and celebrated behavior, because they’re, well, leaders. “I know that when I utter more words of recognition, it’s contagious,” says VP of Marketing Staci Johnson. “I hear peer-to-peer recognition increase as a result.”

Gratitude and recognition can create a ripple effect, receiving a brief written expression of gratitude motivated helpers to assist not only the author of the card, but others as well.

Make compassion and recognition key components in your leadership development training.

Here are three tools your managers need to be consistent and frequent with recognition: 

Leaders and managers should make recognition a task on their calendar (not that the act of giving thanks should be a scheduled task, but sometimes a calendar reminder can help you keep recognition top of mind): 

The Privilege of Recognition

A manager or organization shouldn’t give recognition just to increase engagement numbers. You should do it because it’s the right thing to do.

Your employees are what keep your business going, express that to them. Most Americans seek recognition from the people closest to them, and they likely see you on a daily basis.

“Recognition is a privilege of leadership,” says David Novak. “Great leaders celebrate other people’s ideas even more than their own, and do it in a way that is real and from the heart.”

Sources: Forbes, Fast Company, SHRM, Gallup, Quantum Workplace, Harvard Business Review, Great Place to Work