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.

 

Don’t Lose Your Best People

 

According to research conducted by Ipsos Research at the end of 2020, about 1 in 4 U.S. employees planned to leave their employer as the COVID-19 pandemic subsides. 

 

According to Engagement and Retention report, presented by the Achievers Workshop Institute in early 2021, 52% of employees surveyed plan to seek new employment in 2021. 

 

Employees are most likely to leave a current job for one with better compensation and benefits or better work/life balance.  The majority of employees cited burnout as the main reason. 

 

Can you sustain your business if you lose 25% to 50% of your employees?  It is inevitable that you will see a lot of employee movement.  The type of employees you lose will differ by industry, but no one can afford to lose their best people.

 

There are some steps you can take now to mitigate the loss and retain many of your important people.  Here are a couple: 

 

First and foremost, identify all of the top performers that you don’t want to lose and ask your managers to have quality communication meetings with them at least twice a month.  Get as good a sense of their job satisfaction as you can.

 

Then, listen to the employee challenges and look for solutions.  Catch unsatisfied performers before they start looking for and applying for jobs.  Once they start doing that your chance of keeping them are much lower. 

 

If you take just these two steps you will be well on your way to retaining your top employees, and those retention efforts will help in keeping employees in general. 

 

Top Seven Reasons Employees Consider Leaving their Jobs

 

According to the “Employee and Retention Report” provided by the Achievers Workshop Institute in Feb. 2021, following are the top reasons that employees consider leaving their jobs:

• 36% - Better compensation and corporate benefits
• 25% - Better work life balance
• 16% - Lack of recognition for their work
• 8% - To find a better Corporate Culture
• 5% - Current company values don’t align with theirs
• 5% - Lack of strong relationship with peers
• 5% - Don’t know.

Companies will always be looking at compensation and corporate benefits to develop budgets designed to attract top talent and maintain your industry position.  But except for this #1 reason above, the rest of reasons are subjective.  And these make up almost two-thirds of the reasons employees consider leaving.  These will require an in-depth evaluation of where your company stands in comparison.

When you do, be as transparent and honest in your appraisal as you can.  After all, your best employees could be at risk.  Ask yourself some very elementary and candid questions about this 64%.  And remember, that because you are in upper management, make sure you put yourself in your employee shoes.  Example: thinking you have a state-of-the-art recognition system, doesn’t mean much to an employee who doesn’t feel recognized.

Correct These Mistakes That Can Lead to Turnover

Five years ago Deloitte surveyed nearly 7,700 Millennials, all of whom were employed full-time, had college or university degrees and worked for large employers. Globally, 66 percent of the Millennials expected to change jobs by 2020.  As millennial turnover has been at about 20% a year, the stats in this research are probably low.  With the vibrant current economy and more jobs available than employees to fill them, this issue will continue and probably get worse.

Retention is a common issue to HR professionals regardless of company size, and losing good employees is never good for your company.  You may not be able to retain every employee but there are some mistakes that are made that you might be able to avoid which can lower your turnover.

Mistake 1: Do you ask them to work as much as you do but don’t pay them for doing it?

It’s only natural for you and higher management to be so committed to the company or the project you’re pursuing that you expect every employee to automatically feel the same way. Growth and profit planning often dictate that you take on extra projects that make your team do overtime every week.  But it’s not fair to assume they will put in extra work to attain goals they are not a part of. When work is piled on without sharing in the outcomes, something will give.  While income may not be the most important reason a person leaves, it ranks within the top three.

If an overtime work week is the norm, a change in how you compensate for performance may make a difference. If you don’t want to upset your income planning there are other forms of compensation that can be effective.  Non cash awards properly implemented can provide a great boost to morale and enthusiasm.  Not only can that help retain your best, it can improve quality and productivity.

A current Amex study shows that half of millennials feel pressured to be available for work at all times.  The more overtime you ask of your employees, the more stressed they become, and the more likely they are to look for another job.

Mistake 2: Are you giving them the chance to learn new skills?

Research has shown that career development is a top factor in retaining millennials. 60% say that the opportunity to learn and grow is extremely important to them.  This is higher by a third when compared to how Gen Xers or baby boomers.

Give your employees new opportunities to learn and do meaningful work and then allow them a “seat at the table” in planning company goals and milestones.  This will give them a sense of purpose and meaning that can lead to improved performance and lower turnover.  And as so many millennials want to contribute to their community and society in general, focus them on how their work can improve their surroundings for the better over time. 

Mistake 3: Do you treat them well? 

This is a question that is often overlooked by management.  Frankly it is just assumed that as a matter of course, purpose, or objective within the everyday workweek that you treat employees well.  Would it surprise you to know that according to PayScale research, a third of employees who left their job had problems with their boss?

Micromanaging is one of the worst things a manager can do.  Millennials especially want and need autonomy…which is just the opposite of what they get with the micromanager.  Research also indicates that 59% of employees have worked for a micromanager.  Of those, 68% said it decreased their moral and 55% said it lowered productivity. 

Most all HR professionals acknowledge that employee recognition is important for a number of reasons.  One reason that is often overlooked is that to provide meaningful recognition managers need to be good coaches and mentors, something difficult for a micromanager to do.  In fact micromanagers tend not to realize that in themselves at all.  

So, while turnover may be inevitable, you can take these simple steps above to reduce these mistakes and to avoid some costly losses of your best people.

For more information on Ultimate Choice Inc.’s products or services please contact us at lborlo@ultimatechoice.com.  

To Retain Your Best Employees – Train Your Managers

Research from just three years ago showed that:

 “half of employees who don't feel valued by their employer intend to look for a new job in the next year. Among those who feel valued, just 1 in 5 (21%) will send their resumes elsewhere.”

With labor market shrinking as it is today, that % may double.  While you are doing everything to find and hire new workers, you also need to do what’s necessary to retain your current ones.

Lots of studies show that employee recognition is one of the factors that will keep your employees from job hunting.  The first factor of course is pay and benefits, but when you reached the plateau on those and there’s not much more give in those budgets, you need to look at other ways to get things done.  Monetary compensation is not the only reason employees stay with a company.

Behavioral psychologists know that you appeal to a workers' sense of value when you reinforce their performance with positive consequences.  Employees that feel valued at work, tend to stay at work with that company. If it’s that easy, why do we constantly work with clients who are having problems with their current recognition efforts?  Could it be a simple matter of management training? 

According to David Ballard, PsyD, an assistant director of organizational excellence at the APA:

"Most managers and supervisors are never really trained to give effective recognition, and don't track the effectiveness of programs that they have in place.”  Managers need to be trained "in the basics of recognition and reward theory to make sure that recognition is closely tied to the behavior that they're trying to recognize and encourage."

No single reward strategy will appeal to all your employees.  Everyone has a unique way that they like to be recognized.  And the front line manager is the best suited to bring that recognition to the employee, to know what they want.  Once they know what their employee’s value, if they make it a priority to implement a reward system that addresses that value, you will get more of that type of performance. 

And, while you’re at it, you may want to institute a recognition system to reward those managers who are going the great job of recognizing their people. 

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net