The Positive Effects of Properly Designed Employee Recognition Programs

 

Employee recognition awards have become a $46 Billion market.  In the last decade or so, employee research abounds that shows that employee recognition increases productivity, reinforces quality performance, promotes morale and builds positive relationships.  

A recent survey of employees conducted by “A Great Place to Work” found that teams scoring in the top 20% of engagement experience 59% fewer turnovers. 

However according to Gallup’s employee engagement statistics 53% of workers in the US are not engaged and up to 65% of employees haven’t received any form of recognition for good work in the last year.  It simply follows that when people aren’t appreciated for their hard work, they aren’t as inclined to continue to produce. 

Following are some thought-provoking statistics about employee recognition programs:

•  87% of company recognition programs emphasize tenure…

 While memorable recognition milestones such as 5-year, 10-year and 20-year work anniversaries are important, it is far more important to plan recognition efforts for your employees based on their results and behaviors

• Over 91% of HR professionals believe that recognition and rewards make employees more likely to stay.
•  An employee who has been recognized is 63% more likely to stay at his or her current job within the next three to six months

 Plan Your Recognition Efforts Around:

• Recognizing an employee going above and beyond to help a customer
• Providing avenues for peer recognition allowing your employees to acknowledge the efforts of their support teams
• Attract new employees
• Raise average ticket price
• Achieving short term operational goals
• Encourage developing of revenue generating or cost reduction ideas and ways to achieve them
• Drive operational excellence
• Measure training effectiveness
• Reduce order error

More Stats From Recent Surveys

•  A lack of recognition and engagement was contributing to 44% of employees changing jobs 
• Business productivity increases by 31% when employees are happy
• Recognition improves employee engagement productivity and performance by 14
• 92% of workers are more likely to repeat a specific action after receiving recognition for it.
• More than 40% of employed Americans feel that if they were recognized more often, they would put more energy into their work
• Employees mentioned that interesting work (74%) and recognition and rewards (69%) as the top factors that keep them at their current employers
• There are many ways in which you can recognize employees besides just money...in fact, 65% of employees prefer non-cash incentives.

For many years the incentive industry had a very difficult time measuring the effectiveness of employee recognition programs.  With the preponderance of employee research that give us stats as shown above, the benefits of a valued workforce are many and varied.  For one thing, appreciated employees report increased job satisfaction. That satisfaction is itself tied to increased loyalty and lower turnover — and that, of course, leads to higher overall productivity.

 

The Most Effective Methods to Control Absences

Employers use a variety of methods to control absences, all with varying results.  Commerce Clearing House does an annual survey of human resource executives on the subject of what method they feel is clients on which method they used and how effective it was for their organization.  The survey used a 5 point scale with 5 being very or most effective.  Following are the results of this survey:

Control Method Used	Effectiveness	Percent Use
Paid Leave Bank	3.5	67%
Vacation Buy Back	3.5	58%
Disciplinary Action	3.4	90%
Bonus (cash or non-cash)	3.3	57%
Verification of Illness	3.2	76%
Yearly review	3.0	79%
No fault	3.0	63%
Personal recognition	2.6	66%

It should be noted that the morale of the organization was also taken into consideration.  Overall, organizations with Good/Very Good morale rated their absence control policies and work-life programs more effective (3.7), than did their counterparts with Poor/Fair morale (2.4).

These methods are almost always used in combination with of other methods. The key for your company would be to choose a program that meets your specific needs

Turn Absenteeism into Presenteeism

Over the years we have seen many studies that estimate unscheduled absences cost a company $2650 - $3600 per employee per year.  Absenteeism in a manufacturing environment can be even more costly.  Safety managers have told us that absenteeism is a big cause in the increased number of incidents of injury or accidents in the workplace.  New and substitute workers just haven’t developed the safety skills that the veteran employees have. 

Absenteeism also carries numerous other indirect costs such as low productivity; disengaged, frustrated  and unhappy employees who come to work and have to carry  the heavier workload of those absent; poor customer service; lower respect for management who put up with the absenteeism; the time it takes to find replacements; the cost of part-time employees and others.

Considering all of the above, doesn’t taking a proactive approach to encourage good attendance make good business sense?  Decreasing absenteeism by even a small percentage can mean significant numbers on the bottom line.  But when companies plan to implement an employee attendance program they often focus on consequences and penalties that are associated with poor attendance.  Exposing these results of poor attendance is important, but there is more value in reinforcing good behaviors than in punishing bad ones. 

You don't want your employees feeling as if they should be paid extra for doing their job.  This is the main reason that many companies would prefer to use an award other than cash.  These programs should also be implemented over a shorter period than long term.  They should never  appear to be an entitlement.  But you do want your people to know that you appreciate and respect their positive attendance. Rewarding for being present can be just as effective for improving absenteeism as penalizing them for noncompliance.  Rewards and recognition for positive employee attendance can make a difference.

Communications is Key

Changing your communication message from Absenteeism to Presenteeism will allow you to focus on all the things that are positively affected by everyone being on the job on time.  If you have any type of employee profit sharing it wouldn’t be very difficult to show the increases in profits that come from dedicated staff always in attendance.  This simple exercise alone has motivated many companies to implement a successful Presenteeism program. 

Having special communication events linked to the program can also add to the fun.  Breakfasts served by the executive staff, luncheons with the CEO for perfect attendance employees in the first month; a special part of the employee newsletter or on company social media can keep the program top of mind. 

Maybe most important, don’t forget a personal heart felt “Thank You” to those who show up on time day in and day out.  Those habits need to be recognized.

A Positive Approach to Reduce Absenteeism

Absenteeism is expensive. Some estimates put the direct costs of unscheduled absences at $2600 - $3600 per year, per employee, and those are just the potential direct costs. Indirect costs of high employee absenteeism can range from low productivity of the frustrated employees who have to make up the slack to a lowered respect for management for putting up with it.   

If you periodically experience a spate of absenteeism try taking a positive approach to it in the form of well-planned incentives.  It can be a good strategic decision that can save a great deal of bottom line profit and add to a positive and engaged employee base.

Most company attendance policies focus only on the consequences and penalties associated with poor attendance.  While it is important to have this "stick-side" as a policy, consider the alternative of using the “carrot-side” as well.  Simple behavior science knows that reinforcing good behaviors has more lasting value to you than punishing bad ones.  Including incentives for employees who exemplify good attendance can be just as effective for improving absenteeism as penalizing them for noncompliance.

A Presenteeism Program

Things to consider when planning your incentive program:

• Set the timing for the program to include seasons where you have the most absences,
• Have a clear start and stop date
• Set clear goals for the program that are based on realistic expectations and use past performance as the measurement to start.  Unrealistic goal setting will guarantee that you program will fail.
• Communicate the program measurement and improvements before, during and after program completion
• Start awarding minor awards at achieving an improvement to the base, with escalating awards for incremental improvement. Think inspirational yet achievable when setting attendance rewards.
• At program conclusion make sure you recognize those employees with perfect attendance.
• The logic of the program should be as transparent as possible to avoid disputes.
• Finally, make sure the program isn't penalizing employees for allowable absences.