Many times employee recognition programs are passed over because leaders feel there are just “fluff” or are “too touchy-feely,” not yielding any actual benefit for the costs of such programs. According to World at Work, only 46% of senior managers view recognition programs as an investment rather than an expense. Yet, we know that employee recognition and engagement do have hard dollar costs related to turnover, productivity, quality, etc. Companies with employee recognition programs reported a mean employee turnover rate that is 23.4% lower than companies without any recognition program (SHRM/Globoforce Employee Recognition Survey, 2012). Replacing employees can cost as much as two to three times their salaries, when factoring in recruitment, training, and lost productivity costs. Lower turnover means less dollars spent on these items and more money spent on investing in the business.
Employee recognition programs recognize and promote positive behaviors that support employees in achieving an organization’s mission and strategic objectives by helping to create a culture of mutual trust, respect, and dedication. They provide organizations with the ability to provide timely recognition to employees based on the significance of their contribution—supporting the mission, living the values, going above and beyond, suggesting innovative ideas, etc. These are all behaviors that link to satisfaction and hard costs. In SHRM’s 2012 Employee Recognition Survey, organizations with strategic recognition programs in place exhibited 28.6% lower frustration levels than companies without recognition programs. When employees feel good about what they do and who they work for, their productivity and quality of work improves—all which affect the bottom line of the business.
So, do your employees receive enough recognition at work? This is a question to ask yourself as a business owner or manager. If you do not have a formal recognition program, you may want to consider the implications such a program could have on your business. If you do have a program, you may want to evaluate its effectiveness—is it doing what it should? Either way, an employee recognition program can help you increase employee engagement and positively affect your profits. And don’t forget…you’re doing a great job!
Written by Jeremy York