In today’s war for talent, organizations are looking for strategies to attract and retain their top performers while increasing organic growth and employee productivity. From offering new perks to designing flexible workplaces, company efforts to optimize the workplace are strong as ever.
But in their search for new ideas and approaches, organizations could be overlooking one of the most easily executed strategies: employee recognition.
Strategically designed recognition programs can help organizations improve employee engagement which gives results in all areas of an organization including process, output, and the bottom line.
An engaged employee is the one who is actively involved in their work in the sense that they care about outcomes, make a concerted effort to achieve and are driven by their own volition to perform at the highest level, so to drive employee engagement is to drive success.
Research indicates that 41 percent of customers remain loyal to a brand because they experienced good employee attitude and this phenomenon of customer retention is a powerful result of employee engagement. Just a 5 percent reduction in customer defection can increase profits up to 95 percent, while a 10 percent increase in retention can increase company value by 30 percent.
Companies that use strategic recognition programs to drive engagement experience a better success rate in achieving established goals, which in turn will lead to long term savings. In most companies the overall advantages of a highly engaged workforce is mostly obviously reflected in Total Shareholder Return (TSR). It stands at an average of 24 percent in companies where 60-70 percent of employees are engaged. A Gallup study found that companies with engaged employees outperform their competitors by as much as 202 percent.
Aon Hewitt 2017 Global Engagement trends white paper clearly identified reward and recognition as one of the top engagement opportunities in most geographies. Strategic and well designed recognition programs can thus help influence employee performance by aligning individuals with company values, building a culture of doing the right thing and creating a positive emotional connection between employer and employee. Rewarding specific results and behaviours positively reinforces those actions, leading to business development.
While designing an effective recognition program to drive engagement one needs to look at the drivers of engagement. A study of three hundred Fortune 500 companies found that an organizations ability to meet the four fundamental drivers of emotions namely: Acquire (to obtain goods, including intangibles like social status), Bond (to form connections with groups and individuals), Comprehend (to master the world around us), and Defend (protect against external threats), influences motivation and engagement. A well designed recognition program hence aims to fulfil these emotional drivers thus helping organizations build an emotional connection with individuals. Such emotional bonds then help drive engagement ultimately leading to improved productivity, profit, and growth.
According Gallup study, managers play a critical role in both wellbeing and engagement, so creating a culture in which managers are encouraged to take opportunities to praise and support their workforce will help foster engagement. Where managers are trained to meet operational needs, and empowered to meet recognition needs, engagement is bound for positive influence.
When your goal is to improve employee engagement the recognition program must be engaging for the users by giving them what they want. Most people today access internet using various devices, so making the recognition program available and accessible via desktop, email and even mobile phones means providing them full exposure and opportunity to recognize other employees every time. In the connected world, this means that employees can recognize peers as soon as they notice something positive and also receive positive reinforcement for their actions in real time.
While we focus on the how we also need to focus on what of recognition. In a study of gift exchange at workplace, it was found that a gift in kind resulted in a significant and substantial increase in productivity while an equivalent cash gift was largely ineffective. Some of the other benefits of the non cash gifts are they are tangible and can be shared with family or shown off to colleagues a power cash rarely provides. They also have a higher communication value than cash as the non cash recognition can be openly discussed in the workplace, it doesn’t disappear in their monthly budget and thus results in a memorable and emotionally valuable experience.
This clearly indicates that an effective and strategic recognition program needs to be carefully crafted considering your company values and specific objectives to be achieved. It can rarely come from a off the shelf solution if your objective is to strike an emotional connection between employees and the organization. So for you to design the most effective program for your organization you would have to begin with the end in mind and ask how engagement would look like in your organization, what behaviours would you see employees demonstrating and so on. A strategically designed recognition program is more than just recognizing employees for doing well at work; it’s a vehicle to build a culture of recognition and forging an emotional bond with each employee.