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Employee recognition: definition, benefits & strategy

10 min read
Of course your people want good pay and benefits, but they also want to feel appreciated for their work and valued for their skills and talent. Find out more about employee appreciation and recognition, as well as how to do it...

What is employee recognition?

Employee recognition, or appreciation, is all about acknowledging the hard work and accomplishments of the individuals and teams within your organisation.

What are the benefits of employee recognition?

Maintaining high levels of engagement

Research has shown that manager recognition plays an important role in maintaining high levels of employee engagement. Often, employees who don’t feel recognised become less engaged over time and are more likely to leave.

Employees who are highly satisfied with the amount of recognition they receive from their managers tend to stay at consistently high levels of engagement over time. They are also less likely to transfer out of their team or leave the organisation completely.

Top talent retention

A recent U.S. Bureau of Labor and Statistics study asked transfers why they changed jobs. The vast majority of respondents indicated they had felt either a lack of respect or a lack of autonomy. A bit of recognition can go a long way to prevent or even reverse those feelings in your high performers.

Recognising employees for good work can help keep high performers motivated, engaged in the company vision, and wanting to stay and contribute. This is crucial because, not only is top talent hard to come by, it’s also expensive to recruit.

Onboarding a new hire could cost as much as £2,700 in recruitment costs and as much as £925 and 32 hours per year in ongoing training. All told, each new hire could cost an organisation over £3k and as many as 42 days in lost or compromised productivity.

Increased productivity

There’s nothing quite as motivating as feeling mastery over a task, and having it recognised by others. Knowing we’re doing good work that is valued and appreciated by others naturally makes us want to contribute more.

According to research conducted by Globoforce, 79% of employees say recognition makes them work harder and 78% say recognition makes them more productive.

In a recent laboratory study by economists at the University of Warwick, they found that happiness led to a 12% spike in productivity, while unhappy “workers” were 10% less productive.

While we know that laboratory conditions do not exactly mimic the dynamics of a modern workplace, it is a good indication that there may be a relationship between happiness and productivity that organizations should be aware of.

We find that human happiness has positive effects on productivity. Positive emotions appear to invigorate human beings.

Happier employees

People want to feel like they’re contributing to their organisation and team goals. So when managers and leaders take the time to demonstrate how much of a measurable impact someone is having on the business it, unsurprisingly, makes people feel good about what they do. Feeling good about what you do is crucial and can translate to general feelings of happiness, both in and outside of work.

The act of appreciating others naturally connects people more closely, making individuals feel like valued members of the team.

Enhanced trust

When recognised in the last month, 86% of employees said they trust one another, another 86% said they trust the boss, and 82% said they trust senior leaders. In contrast, only 48% of employees who were not recognized in the past month reported trusting their senior leaders.

Not only is trust key in running a successful business, trust in leadership can also make uncertain times less challenging. When recognised in the last month, 69% of employees said they were excited or confident about an upcoming change, vs. only 41% of those who had never been recognized reporting the same.

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What types of employee recognition are there?

In-the-moment feedback

In-the-moment feedback helps foster a culture of appreciation. It should be given by the immediate manager or coworkers familiar with an individual’s work.

Examples could include:

  • Saying thank you for a job well done
  • Sending a personal note

Informal employee recognition

Informal employee recognition is used to maintain motivation through big tasks or long projects. It is ad hoc and typically provided by a team or project lead. This type of recognition should be commensurate with the milestone achieved.

Examples could include:

  • Copying an employee on a complimentary email sent to their boss
  • Team lunch

Formal employee recognition

Formal employee recognition is a programme that has consistent and clearly communicated criteria that aligns with specific company goals or values. It is usually publicly presented by a senior leader and used to recognise achievements with broad organisational impact.

A great example includes Amazon’s annual Just do it award, which is used to publicly recognise employees who go above and beyond to innovate on behalf of customers. Recipients are presented with the coveted Nike sneaker trophy, which serves as a source of continuing pride for the awardee and motivation for colleagues.

What’s the best way to show employees your appreciation?

Employee recognition is not just about checking the box to say you did it. People can usually recognise when the sentiment isn’t genuine.

Recognition efforts need to be thoughtful and create an emotional connection between employees and the organisation.

Reinforcing and rewarding behaviours that align with your company values, mission, vision, and strategy can help achieve this. For example, we call our core values at Qualtrics TACOS:

  • Transparent
  • All-in
  • Customer obsessed
  • One team
  • Scrappy

If a manager at Qualtrics wants to acknowledge someone for solving a problem in an entrepreneurial way, they might call them “scrappy.” Or, when a team member does everything they can to help a customer smash their targets, they might hail their customer obsession.

This helps to reinforce the kind of behaviours and attitudes we want to see in our people. In turn, it makes our people feel like they’re living the values of the company.

Make your people feel valued, respected, and cared for to create an emotional connection.

Be specific with praise

Tell employees what you appreciate about their contribution to the company. Be as specific as possible and explain why their work stands out.

For example, don’t just say, “Good job today.” Instead say, “I see that you stepped in to resolve Customer X’s problem. That showed real initiative and helped us avoid a more serious issue in the future. Thank you for doing that.”

Give praise the right way

In order to be meaningful, recognition has to match an individual’s preferred style. Not everyone wants to be brought on stage to rousing applause. Get to know your people and what motivates them.

Consider whether a more personal thank you is appropriate. Kudos that come directly from a manager or team leader tend to be very well-received. It is important to have individuals who are close to an employee’s work recognise their efforts.

Learn more about designing an employee recognition programme

Effective employee recognition tools

Collaboration tools such as Slack, Google Hangouts, and Microsoft Teams are great for informally thanking your employees. One may even create a specific recognition channel if the intent of the recognition is to give employees more visibility.

The most successful employee recognition programmes are those that include everyone in the workplace and that are based on good work rather than “employee-of-the-month” type rewards.

As such, when adopting a new tool, employers must communicate the purpose of the tool as well as what metrics will be used to determine rewards. Further, it is important to ensure that employees are aware of the tool and find the rewards meaningful. These considerations are crucial to ensure that your recognition programme doesn’t fall flat.

Above all, your people are your most important asset. How they feel about your business has measurable impact. Making sure you recognise and appreciate your employees in the right way not only helps with employee retention, but also with engagement and productivity – and ultimately, your bottom line.

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