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Employee Recognition: Why it Boosts Business Performance and How to Ace it

Employee recognition has been on the HR practitioner’s radar for a long time, but it still confounds even the best enterprises.

In 2013, the Harvard Business Review surveyed 550 executives about employee engagement.

While the report found that most leaders understand the importance of employee engagement,
three-quarters of those surveyed said that “most employees in their organizations are not
highly engaged.”

And this is despite 71% of those same survey respondents ranking employee engagement as “very important to achieving overall organizational success”.

You don’t have to be on the HBR Analytic Services team to see the disconnect here.

Or appreciate the potential ramifications of employee dis-engagement on a business’s success.

It’s a throw-your-hands-up-in-the-air in frustration situation.

But how do you engage more effectively with your employees?

One very effective way is employee recognition.

Why is Employee Recognition Important?

Employee recognition is a vital element for creating a positive corporate culture because it simplifies human capital management (HCM).

Successful companies are backed by a well-trained and skillful workforce. But without the motivation, employees rarely maintain these standards.

The most immediate benefit businesses can gain from a consistent culture of employee recognition is boosting employee morale.

This social action translates to an extremely motivated and high-performing workforce.

What does a motivated workforce mean for your business?

  • Increased levels of productivity
  • Lower employee turnover
  • Customer satisfaction
  • Higher profit margins

Not only does employee recognition positively influence employee engagement, but it can also improve your business’s bottom line.

It doesn’t need to be a high-cost undertaking. It should add value.

The Aberdeen Group reports that 60% of Best-in-Class organizations cited employee recognition as extremely valuable in driving individual performance.

“I have always believed that the way you treat your employees is the way they will treat your customers, and that people flourish when they are praised.” – Sir Richard Branson, founder of Virgin Group

You can gain more realistic and beneficial employee feedback from a workforce that feels valued. This paves the way for companies to successfully introduce high-level training for their employees.

Using powerful training tools like learning management systems (LMSs), a business can create a symbiotic relationship between its employees’ skill levels and its bottom line.

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How Can Employee Recognition Benefit an Organization?

Happy Employees + Happy Customers = Business Success

Let’s isolate the first part of that equation – Happy Employees.

There are significant numbers tied to low employee morale (i.e., unhappy employees).

In the latest State of the Global Workplace report, Gallup stated that 18% of employees are actively disengaged at work, while 67% are not engaged at all. As a result, global businesses suffered $7 trillion in lost productivity.

And while it’s easy to get desensitized to such an awfully big number, the lesson is clear: Nurture people to nurture performance.

In other words, keep employees happy, be mindful of their psychological well-being and acknowledge their good work.

“Mary Kay knew that when you put people first and then surround them with processes and disciplines that recognize their efforts, performance will soar.” – David C. Novak, founder and CEO of oGoLead

Because happiness is not simply a nice feeling.

Employee happiness benefits the bottom line.

According to research with more than 23,000 workers in Australia, Belgium, Canada, France, Germany, the Netherlands, the United Kingdom, and the United States:

  • Happy employees are more resilient and loyal and stay for the long term.
    • Reduced turnover means you retain more institutional knowledge and spend less time and money on hiring and training.
    • Happy employees are the most vocal and most persuasive advocates for their organizations.
    • Beyond spreading optimism and goodwill within the company, happy employees create a good impression externally and deliver better client service.
    • These enthusiastic endorsements enhance your firm’s reputation and can bolster recruitment efforts.
  • Happy employees do better work.
    • Happy employees are up to 12% more productive.
    • Happiness positively impacts the quality and quantity of work at both the individual and team level.
    • Happier people care more about their work, put in greater effort, and are quick to notice when things are not going right and take action to prevent negative outcomes.
    • Happier employees tend to be more innovative and creative.
  • Happy employees are healthier.
    • Happy, engaged employees experience fewer chronic health problems, eat a healthier diet and exercise more frequently than their less-engaged counterparts.
    • Happy employees miss less work due to sickness – and recover faster when they do fall ill.

So what happens when you get the right mix of employee recognition, engagement and happiness?

Your company will retain more of its top performers

Employees don’t usually quit jobs; they quit managers. Retaining employees significantly cuts down on the time and resources needed to hire, onboard, train, and motivate new staff.

Everyone will want in on your business

Did you know that the average person spends nearly 100,000 hours at work over their lifetime?

By investing in a corporate culture of employee recognition and engagement, you are positioning your business as a stable and attractive option for both top-tier employees and investors.

Self-improvement will become the norm

Employee recognition in the workplace is the basis of a continuing culture of self-improvement. Employees who are keen on learning and improving are beneficial for the bottom line.

Now that you know why it’s important to recognize the good work of your employees, let’s get into the how.

Here are 6 simple but effective ways to recognize employees:

1. Initiate Peer-to-Peer Recognition

Peers have more frequent interpersonal contact with each other than with their superiors.

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A survey shows that peer-to-peer recognition is 35.7% more likely to have a positive impact on financial results than manager-only recognition.

Although appreciation from the top feels great, recognition from peers can be a lot more validating.

As a business, you should encourage peer-to-peer recognition programs and ensure that your employees are aware of them. Likewise, everyone should feel empowered to use these programs; regardless of job title, tenure, or function.

To do this, you can use customized communication software that prompts people into action from time to time.

Other simple ways employees can recognize one another are:

  • Signing appreciation cards
  • Nominating employees of the week
  • Holding periodic recognition raffles

2. Make Appreciation an Event

A company should have special days set aside for employee recognition. It gives the staff something to look forward to (e.g., weekly, monthly or quarterly).

As a leader, you should praise your top-performers in front of their co-workers to boost self-esteem and increase morale.

This encourages employees to do their best to gain recognition, knowing that they’re working for an appreciative employer.

Set special days aside to honor professional milestones including:

  • Employees with the longest positive track record eg top sales, most awarded employee of the month, best improved.
  • Top-performing department of the month
  • Best improved department – in terms of budget cuts, meeting KPIs collectively, sales numbers

3. Physically Reward Your Employees

As a business, you should design a corporate culture of rewarding employees using tangible treats or annual bonuses. This creates a “buzz” leading up to the end of your working calendar.

Dedicate a wall in your office to display images of top performers or departments, and follow up by awarding corresponding certificates or trophies.

Monetary bonuses are a great way to tell your employees that they are doing a phenomenal job. It makes them feel fantastic to know that their hard work paid off and that you are happy to share some of the results with them.

As an incentive for high-performing employees, a business should consider paid vacations as a reward. This could also initiate a healthy level of competition amongst your team.

4. Give Tokens of Praise

People love souvenirs!

As a business, you can reward your employees using customized tokens like:

  • Branded stationery
  • Fun-themed company t-shirts and caps
  • Useful everyday items such as mugs, bags, and notebooks
  • Shopping gift cards

If executed thoughtfully, most of these gift items can become free marketing tools for the company; employees will want to show them off, while outsiders will ask about the brand.

Similarly, throw in the occasional free coffee, donuts, snacks, or lunch days at the office as a way of saying thank you to your employees for sticking with you. After all, food is the great unifier!

5. Loosen the Reins

Appreciation at work doesn’t always have to mean direct praise – it could also be delivered in the form of a fun break from the norm.

Add variety to your company’s 9-to-5 routine with themed days like:

Such events can show you a different side to your employees, allowing their hidden talents to shine. This works magic on employee morale and engagement.

Show your employees that you trust and appreciate them by actively supporting an ongoing culture of healthy work-life balance.

6. Provide Regular Professional Learning Opportunities

When an employee realizes that their employer is willing to invest in their professional growth, they reciprocate with the most valuable commodity they possess – their loyalty.

With World Manager’s eLearning software, you can set up and customize your own corporate LMS and provide all your employees with the training they need and the recognition they crave.

Ultimately, organizational communication is the foundation of employee recognition.

With World Manager’s communication tools, you tailor your own platform to keep employees informed on existing and new policies, new hires, company events, updates and much more.

You can also track individual employee progress reports while facilitating employee engagement through peer recognition, personal and departmental updates.

Are you ready to unleash the power of next-level communication in your business? Book a demo today.

Disclaimer: This information is meant to provide general guidelines and should be used as a reference. It may not take into account all relevant local, state or federal laws and is not a legal document. Neither the author nor World Manager will assume any legal liability that may arise from the use of this information.

The best companies use World Manager to train staff, maintain standards, and set the company up on the road to success.