Most business owners have clear goals to reduce their costs whilst improving the quality (and sometimes quantity) of work coming from their employees. In a competitive business climate, careful considerations need to be made when it comes to getting more out of your workforce. Attracting and retaining outstanding performers and improving employee productivity can be achieved in a number of ways, ranging from work perks to greater flexibility. Although new ideas shouldn’t be discounted, employee recognition is a fail-safe strategy that can be implemented in small and large businesses alike. Subsequently employee reward and recognition programmes are growing in popularity, as they motivate employees to change their work habits and everyday behaviours to benefit the business.
The Advantages of Feeling Appreciated
In order to become truly successful at your job as a business owner or entrepreneur, you need to understand the importance of being appreciated. When it comes to praising others for their hard work, you need to apply the fundamental principles of employee recognition. Not only do you need to make this a regular occurrence for yourself, you also need to encourage other people to implement this too, so that they can introduce this into their day to day working relationships.
Dr Ashley Whillans from the Harvard Business School explains this matter quite clearly:
“What really matters in the workplace is helping employees feel appreciated”
This not only highlights the importance of employee recognition, but it also outlines one of our basic needs as an employee and human being. Appreciation is certainly an essential human need that should never be discounted, as employees will respond positively to any sort of appreciation that comes their way. When their work is valued by others it means their satisfaction rises and productivity increases too. In order to create a thriving workplace, praise and recognition are going to be fundamental elements. As long as people are respected for their efforts and contribution, they will feel a sense of achievement and keep striving to reach this in every task they undertake.
What is Employee Recognition?
You could define employee recognition as a well-timed acknowledgement to a person or team which praises their effort or behaviour. Whether they have performed outstandingly or helped to achieve one of the organization’s goals, they will have clearly gone above and beyond normal expectations. A recent statistic shows that 90% of employees say their recognition programme impacts positively on their engagement and motivation levels. Surely, this is a no brainer that all small, medium and large businesses need to implement recognition into their workplace on a regular basis.
Implementing Recognition Programmes
For business owners and managers, it might seem like a lot of extra effort to implement recognition programme, especially when the results aren’t always immediate and tangible when it comes to their employees’ performances. Of course, many workers will appreciate monetary rewards for good work, but many are simply seeking recognition when they go above and beyond. When you have less cash and more imagination available, this is the perfect plan to put in place when it comes to motivating your employees.
Patricia Odell explains:
“Cash is no longer the ultimate motivator”
This is a proven case that awards that are not based around extra cash can be much more effective. Recognition has been proven to improve organisational values, enhance team efforts, increase customer satisfaction and motivate certain behaviours amongst members of staff. In order to develop an efficient recognition programme a business owner or manager needs to separate this from the business’ reward systems, which will be touched upon later. This will ensure that the lines are not blurred when it comes to recognising and rewarding outstanding work and performance.
Timing is Everything
When it comes to recognition, timing is absolutely vital. The recognition process needs to happen when the high-quality performance is still at the forefront of both your mind and the employee’s mind. If high performance is continued amongst the same members of the team, this should also increase the frequency of the recognition. However, it needs to be carefully timed so that it does not lose its meaning and seem robotic. The recognition also needs to be appropriate for the achievement in question so that the best performances receive the best types of praise. So long as you remain flexible in your approach to recognition, it will always appear genuine rather than coaxed or forced.
Structured or Spontaneous?
Recognition can take on an assortment of forms, from structured programmes to more spontaneous recognition. All in all, you need to assess what it right for your business. It will ultimately depend on your size, type and business values when it comes to implementing structured or spontaneous recognition for your employees. The different methods of recognition will be discussed in more detail shortly.
What are Employee Rewards?
Employee rewards could be considered a more tangible form of appreciation to your employees who have achieved high quality work or displayed outstanding performance levels. It could be said that rewards are slightly more costly to businesses as they often take the form of bonuses and profit sharing. This system is proven to be just as effective as employee recognition as it increases engagement and motivation levels significantly. Depending on the size of your business, the rewards that you can offer your employees will vary. Always stay within your means and consider innovative ways to weave rewards into the work environment when appropriate.
According to Officevibe:
“82% of employees think it is better to give someone praise than a gift”
With that being said, it is still important to consider rewards as part of your employee programme, but they are not the be all and end all of your workforce motivation. Recognition could be considered the more worthwhile and inexpensive approach but having a balance of the two certainly won’t do any harm. When it comes to implementing an employee rewards programme there are several approaches you can take.
Implementing Reward Programmes
When you think about designing a reward programme you need to separate that idea of salary increases and merit pay from this system. Financial rewards such as bonuses should be used sparingly, so that the employee does not get to the point of entitlement. It might also demotivate other members of staff to know that their colleague has received a monetary reward over them. Merit pay increases shouldn’t be a part of the employee reward programme you plan to implement. It can be quite difficult to measure rewards as people are often expected to work as a team nowadays. The performances often need to be considered within the context of a group or within the business.
Considerations to Make
Some of the fundamental aspects of developing a good reward programme include, identifying the goals your business wants to support, identifying the desired behaviours for rewards, determining the appropriate rewards and communicating the rewards programme effectively to employees. In order to achieve the best possible results your business goals and the rewards programme need to be aligned. Consistency is also key, so that your employees can know what to expect when it comes to rewards for their hard work and outstanding performance in the workplace.
How Recognition and Rewards Complement Each Other
There are clearly many differences between recognition and rewards, but it doesn’t mean they need to be considered as separate entities when you are planning out your employee programmes. Some of the main differences between rewards and recognition can be summarised as the following:
- Tangible and of a specific amount
- Transferable and can be passed off from one person to another
- Conditional and based on certain terms
- Invisible in nature, yet priceless in value
- Non-transferrable and quite permanent
- Unconditional and not part of a fixed result
The differences are quite distinct, yet there is a fundamental message to be taken from this. There simply cannot be a reward without recognition. This means that the two systems go hand in hand together and complement each other accordingly. It is true that both reward and recognition programmes have their place in both small and large businesses. As a business owner or managing director you firstly need to determine the desired employee skills, accomplishments and behaviours that will support your business goals. When you reward and recognise an outstanding performance, you will then be able to gain the edge over your competitors as motivation levels and productivity will improve.
Rewards vs. Recognition
The following quotes can accurately portray the importance of employee recognition in the workplace:
“Recognition is not a scarce resource. You can’t use it up or run out of it.”
On a similar note Dale Carnegie, a Leadership Training Guru emphasizes:
“People work for money but go the extra mile for recognition, praise and rewards.”
This goes to show that recognition might go a lot further than rewards in your workplace. Although employee recognition programmes are often combined with reward programmes they retain a completely different purpose altogether. One is a psychological reward and the other is a financial benefit; although many elements of designing and maintaining reward and recognition systems are exactly the same, it is very useful to keep their differences in mind at all times. This will come in especially handy if you are hoping to keep staff motivation levels high, whilst minimizing costs.
Before you put an employee rewards programme or an employee recognition programme in place you need to be aware that many might be counterintuitive and unnecessarily costly to you. Many social psychologists refer to this as the ‘over justification effect.’ To put it simply, this means that once you have an expected incentive in place, it means a person or employee’s inherent motivations are shifted, so that their performance in fact decreases. If you were to remove or reduce the reward, the motivation levels and interest will be gone altogether; as a result, rewards and recognition should be thought through carefully, so that they never become an expectation in your workplace.
The Importance of Recognition and Rewards
Consistent with analysis from Gallup, only one in three workers strongly agree that they have received a form of recognition or praise at work in the last week. In any work environment it is very common for employees to feel ignored and underappreciated, even when they have gone above and beyond expectations. For many employees who don’t feel adequately recognised, they are more likely to quit their job within a year.
With this being said, recognition one of the largest missed opportunities amongst managers and leaders. Not only does it motivate your team, but it also provides them with a huge sense of accomplishment. When employees feel truly valued for their work it will boost individual engagement and improve their loyalty to the business. Retaining members of staff is one of the biggest advantages to running a recognition and rewards programme in your workplace. The knock-on effect of recognition is also considerable, as it sends messages to other employees about what success really looks like. Improving the overall culture around the work environment can be achieved by good recognition programmes.
The Impact of Employee Recognition
The main impact of employee recognition is that it is an essential motivation factor which leads to a greater amount of staff retention. Although many leaders consider this to be a considerable effort, it is certainly worth investing time in.
According to recent research from Office Vibe:
“The number one reason why most people leave their job, is because they don’t feel appreciated.”
The importance of employee recognition is often overlooked, but many managers and leaders aren’t aware of this vital impact. The significance of employee recognition cannot be ignored; there is a whole load of opportunity for you to build employee engagement and get your employees excited about work. When considering the positive impacts of employee recognition, it might be easiest to discuss them in relation to the three different types of employee you can usually find in the workplace:
- Engaged employees – those who work with a passion and drive the business forward
- Not engaged employees – those who are essentially ‘checked out’, putting time rather than energy into their workload.
- Actively disengaged employees – they make their unhappiness at work clear and might even undermine their own colleagues’ achievements
Regular recognition can not only help engaged employees progress even further, but they can also help to improve the motivation of disengaged employees altogether. If you start to implement a consistent recognition programme today, you might expect to see the following results:
- Increased productivity and motivation. The act of recognising desired behaviour increases the repetition of the desired behaviour, and therefore boosts productivity.
- Better employee satisfaction and enjoyment of work. There will be much more time spent focusing on the job and less time complaining
- A knock-on impact on customer experience, loyalty and satisfaction scores
- Greater financial performance and business outcomes
- Teamwork between employees is enhanced
- Better safety records and fewer accidents on the job
- Lower negative effects such as absenteeism and stress
If your business can implement sophisticated recognition programmes you are more likely to achieve your business outcomes and improve motivation levels amongst your team.
The Risks of Ignoring Employee’s Needs
It is your responsibility as management to ensure that your employees are fulfilled and happy in their work environment. A person’s career is a huge part of their life, so without enjoyment, they aren’t going to be motivated. Similarly, without them, you would have no business or livelihood, so it is important to show your employees how much they matter.
In a survey by Psychometrics, they asked what leaders could to more of to improve engagement. 58% of respondents replied:
At the moment, employees feel as though they are not appreciated enough, so embracing a culture of recognition is key to meeting all of your employee’s needs. The main risk to your business is that your employees will be disengaged; the cost of this is notable so you should be trying to avoid this at all times.
A lack of recognition leads to disengaged employees, who are more likely to negatively influence their co-workers, steal from the business, miss work and deter potential customers. Gallup data for 2018, shows that around 13% of employees in the US are actively disengaged and according to Chairman and CEO Jim Clifton:
“They are miserable in the workplace and destroy what the most engaged employees build. The remaining 51% of employees are not engaged — they’re just there.”
When your employee is disengaged you are running the risk of losing them. The actual cost of losing an employee is significant; you will have to front the cost of:
- Hiring a new employee (advertising, training, interviewing)
- Productivity whilst the new person is trained up
- Reduced customer service efficiency
- Lost engagement as other employees lose productivity
These overarching factors prove that you should never ignore your employee’s needs as this will cost your business a significant amount of money overall.
Factors to Consider Before Implementing Rewards or Recognition
Losing an employee will cause a significant cost to your business, but what does employee recognition cost you?
Here is a summary of employee recognition expenses to your business:
- Time spent creating and implementing the programme
- Time spent giving recognition
- Time taken to teach people how to give recognition
- Costs of fulfilling the new process
- Cost of the recognition items given
As you can see the actual cost of employee recognition is much lower than that of losing an employee due to disengagement. You simply need to invest more time into a workable programme as the benefits will outweigh the costs.
Methods of Recognition: There are a number of ways that you can implement methods of recognition into your business. Here are some tried and tested methods that have proved themselves very effective in the past:
Social Media Recognition: You could set up an employee of the week (or month) strategy online, which recognises those who have done a particularly good job in the recent days. Whether you post a fun picture on your Twitter account or make an announcement in the office, this is a proven method to boost employee engagement.
Peer to Peer Recognition:
“Peer to peer recognition is actually 35.7% more likely to have a positive impact on financial results than manager only recognition”
This is according to SHRM Survey.
In order to make recognition a true part of the business culture it needs to be embraced by all, rather than a few. With everyone involved it empowers you employees to acknowledge the achievements of others and therefore encourages them to contribute to high performance levels.
Business Lunch: This is an excellent way to say a huge thank you to the employees who have gone above and beyond. By taking your team out to lunch at a nearby restaurant this is will show your appreciation for all of their hard work recently.
Offer a Gift: A small present such as a gift card for the local coffee shop will go a long way for your employees. Ensure the gift card is personal to the employee as an individual as this will make them appreciate it even more.
Time in Lieu: When someone or a team has put in the extra hours, they deserve to get time off in lieu as recognition for their hard work. Even if it’s an early finish on a Friday or a late start on a Monday, every little helps when it comes to recognition.
To summarise, employee recognition affects the bottom line of any business, as it leads to higher retention rates, improved productivity and boosted self-esteem. If you can harness and implement a consistent programme you will notice significantly faster results, better team work and an improved client/customer relationship. The ongoing effort will soon penetrate all areas of your business resulting in a happier and more profitable workforce, so taking time to say ‘thank you’ to your employees will ensure you reap the benefits in the long run.