Human nature is such that humans like to feel valued and special for what they are and what they do. This basic psychological tenet is applicable in the workplace as well, and forms the basis for rewards and recognition. While some organizations prefer paying a premium to make employees feel valued, others believe in a more culture-centric way of making employees stick.
A recognition program does not typically involve much costs, but the outcome is significant. Some of the benefits are:
- Increase in morale and motivation – 4 out of 10 employees say that they would put more effort into their work if they were recognized more often.
- Enhancement in productivity – When you increase morale, productivity, performance, and work quality also increases, ultimately enhancing your bottom line growth
- Retention of top performers – It’s important for individuals to know that their work has an impact. If they don’t feel appreciated, don’t expect them to continue putting in the same effort. Companies that score highest for building a “recognition-rich culture” have 31% lower turnover rates than their peers. Aside from direct costs, losing your top performers carries many indirect costs, like lost institutional knowledge and relationships.
- Identification of low performers before it’s too late – Once you have a recognition program in place, you’ll be able to quickly see who your low performers are and support them through professional development, a better team environment, or otherwise.
- Employee engagement – Motivation and productivity are just one piece of the engagement puzzle. Recognition also helps drive employee engagement by providing a sense of value and accomplishment. Research shows that recognition increases employee engagement by up to 60%.
Characteristics of effective recognition – Before implementing employee recognition program, it’s important to understand the characteristics of great recognition. The recognition programmes should always be
- Timely and regular
- Department or Domain Specific
- Visible on the entire organization level
- Inclusive and Value based
Categories of Recognition – The Employer must ensure that his recognition programs always fall under these 3 categories:
- Contribution-based Recognition: According to research 87% of recognition programs focus on tenure—rather than contribution and efforts. Especially with a millennial-heavy workforce, where the average tenure is somewhere between 1 and 3 years, it’s unlikely that your new workforce is feeling the impacts of recognition programs targeting 5-year anniversaries. Having free recognition programs that focus on highlighting exceptional work ethic or output means that you can positively reinforce that awesome behavior, and increase your employee engagement, without extra cost to the company.
- Non-competitive and Non-Gamified Recognition: Having a recognition system that stacks employees against each other do more harm than good. While competing for points might motivate the top performers to try even harder, it can be demoralizing for those at the bottom of the competition, and even cause employees to act poorly in order to win. Instead of having employees compete against each other for the most recognition, have them work towards a personal objective. Perhaps recognition can translate to bigger rewards with some accumulation, like free lunch, or some extra benefits.
- Peer-to-Peer Recognition: Unfortunately, not enough companies are providing peer-to-peer recognition opportunities. Peer-to-Peer recognition can be one of the easiest ways for employees to feel connected and recognized, without requiring a costly rewards campaign. That increase in morale translates to end-consumer benefits too. Most companies that have peer-to-peer recognition in place have seen positive increases in their customer satisfaction.