Glasses to represent seeing employees for employee recognition.

– A MentorcliQ Article –

Employee Recognition: Why It’s Important and How to Implement It

If The Great Resignation of 2021 and the “quiet quitting” phenomenon of 2022 taught us anything, it’s that employee engagement needs to be a priority. Raises and bonuses help, but there’s a limit to how much, and to how much any company can afford. Instead, leaders must find better ways to incorporate employee recognition strategies that look beyond money and help workers feel valued by their leaders and colleagues.

According to research by Zippia, 80% of employees would work harder if they were appreciated at work. The same study also states that the employee turnover rate dropped by 31% with a strong employee recognition program. These stats add weight to existing evidence that an effective system for providing employee recognition keeps them happy and satisfied.

What Is Employee Recognition?

Employee recognition is the process of acknowledging the contributions that your employees have made to the company’s success and goals. Contributions refer to different things:

  • High performance
  • Reaching KPIs
  • Landing new deals
  • Expanding existing contracts
  • Sourcing new talent for hire
  • Etc.

You can define what that contribution means to the organization and how much value you put into that contribution that would merit employee recognition.

Employee recognition for nurses.

The most important aspect that would make an employee recognition program successful is that it should be done in a meaningful way. The employees must feel appreciated for the efforts they have made for the company.

Employee recognition is your way of showing that you appreciate their efforts. It is part of human nature to seek to be appreciated. In turn, getting appreciation acts as positive reinforcement that feels internally rewarding and produces an inherent drive to keep doing the same thing in order to be rewarded for the behavior and/or performance.

Of course, consistency is key here. If employees continue to persist in activities that previously resulted in a reward or recognition of some kind, you’ll need to maintain that program. Or, if you do choose to end that recognition program, you’ll need to make sure that you’ve communicated this with employees ahead of time.

Guide to Basic Human Needs & Its Role in Employee Recognition

The best way to understand the link between employee recognition and employee performance is to analyze Maslow’s Hierarchy of Needs. When you apply this to employee engagement strategies in the workplace, it will help you formulate the most effective and successful employee recognition program.

  • Survival: Employees at this level are the most disengaged at work. The level of human need represents food, water, sleep, and physical health needs. They only show up for work because they need the money for survival and there is no satisfaction. These employees are most likely to leave their work if they can find higher-paying opportunities.
  • Security: This type of employee is not engaged. They are pursuing job security, benefits, and salary. They show up to work even when subjected to poor working conditions because they need it for monetary benefits. These are also employees who often don’t have a good working relationship with the managers or senior leaders.
  • Belonging: This type of human need represents the need for humans to belong to a social group, friends, or family. Employees want to feel like they are part of something bigger. They want to feel proud of the work they are doing. If that is not fulfilled, they will look for a better opportunity somewhere else that could help them fulfill that need.
  • Esteem: This level of basic human need is when employee recognition comes in. Employees seek out respect and recognition from others. It is important because it promotes self-confidence that enables them to perform their job better. When an employee is recognized, they feel better about their position in the company and would be less likely to leave.
  • Self-Actualization – This level of basic human need is how you can produce highly engaged employees. This level is where creativity, inspiration, and learning take place. An employee who is recognized and appreciated loves working for the organization they are a part of and will be more committed to doing more than what is expected of them.

But first, let’s take a look at why developing a culture of recognition is vital in creating a positive company culture and how it benefits your organization as a whole.

Why Does Employee Recognition Matter?

Recognition is an important part of psychology in work at the office or any type of workplace. Employee recognition boosts the likelihood that a desirable event will happen again. In this way, when you recognize employees, you are communicating to them that they have conducted themselves as desired and you want to reinforce those desired behaviors.

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Did you know engagement can reduce turnover by a ton? Our Employee Retention eBook lays it out clearly.

Employee recognition is just one of many ways that you can implement the reinforcement policy at work. Specifically, you want to instill positive reinforcement.

You need positive reinforcement when developing an employee recognition strategy to attain your desired results.

And what are those desired results? The following are the reasons why organizations invest heavily in employee recognition programs.

Recognition vs reward

The distinction between recognition and reward is important to create a meaningful employee appreciation strategy. These two are often interchanged; however, they are actually different from each other and it’s important to know that difference.

When most people think of employee recognition, they associate it with employee rewards. While there is nothing wrong when you want to reward employees, it is not the core aspect of an employee recognition strategy.

Employee recognition using money as a financial reward.

Employee recognition is:

  • Often intangible
  • Based on emotion and/or words or acts of appreciation
  • May have a visual element, such as being added to an About Us page, or sending a thank you note

Employee rewards are usually:

  • Distinctly tangible
  • Highly transactive
  • Often involve something physical and of noted value, such as bonuses, pay raises, or gifts

As such, employee recognition is when you acknowledge your employees’ desired behaviors, core values, and contributions to the entire workforce. It is often intangible. There is no definitive way to measure it. Conversely, rewards can easily be measured, often in an amount.

We’ll note here that there’s absolutely nothing wrong with employee rewards. These are good and valuable to add to your engagement strategy. However, rewards are not always feasible for a company, especially with regard to raises and bonuses. And it’s very possible for an employee to get rewarded, but still feel poorly recognized. When both rewards and recognition are possible, they work well together. But when only recognition is possible, make sure it’s always available!

Employee engagement

Engagement is directly linked to an employee’s motivation. Employee recognition drives a higher engagement level because they feel like their inputs and contributions are making an impact on the organization and that effort is valued.

When you recognize employees for their contributions, make sure to do it regularly and on a timely basis. The more you show employee appreciation, the more employees feel positive appreciation for the organization.

Employee retention

A high turnover rate is a menace for companies. Financially speaking, employee turnover can easily cost 2X an employee’s salary, or more if the role is highly specialized. When an employee leaves a company, the company’s productivity levels take a huge dip and the exit may trigger turnover contagion. You also suffer from a loss of institutional knowledge within the organization, especially if the employee who opted to leave was one of your top performers.

A worker gives up and puts her head on the computer, a reflection of the lack of employee recognition.

But that is not the only expense that you suffer as a result of a high employee turnover rate. Your organization will cover the recruitment costs as you search for new hires, post job listings, and go through extensive job recruitment and training for new hires.

It takes an average of 42 days for most companies to fill in a new job position. Unless your remaining team members are capable of completely making up the difference (in most cases, they can’t), you’ll be losing a large amount of productivity until a new team member has been hired, onboarded, and properly activated in their role. This is a productivity decline that could last for well over a year.

A Pew Research survey found that 57% of workers quit because they felt disrespected at work. If you want to improve your turnover rate and improve employee retention, it’s time to develop an employee recognition program to ensure that your employees become emotionally invested in their job and are less likely to look for other opportunities.

Improves work relationships

A common refrain in the work landscape is that “people don’t quit jobs, they quit managers.” The data on that is all over the place, but 84% of workers claim bad managers make their work environment unnecessarily stressful. At least one study puts the number of people who quit due to bad managers at 57%.

This is your reminder to work on fostering healthy relationships among your employees, especially involving managers. Employees who get frequent recognition from their managers develop trust, have better communication, and are able to work together more effectively.

There’s a solution to bad leadership: Mentoring. When you properly train your leaders, they become effective managers. Read our blog post on Leadership Development to get an intro to how to get started.

Make sure that managers and company leaders are trained on giving employee recognition. They need to understand the vital role they play in improving work relationships and boosting morale.

Improve company culture

When employees feel recognized, they are not only happier but are more likely to practice peer-to-peer recognition. This creates a chain of employee recognition that motivate employees and makes employees feel cherished within the group.

Your employees play an important role in shaping your company’s culture. Respond to this by making employee recognition part of your core values brings about a ton of benefits to the employee experience.

Reinforce company values

If you want employee recognition to become one of your primary company values, make sure that you give timely recognition to your employees. Doing so will encourage employees toward not only increased productivity, but it can have a positive impact and make employees feel appreciated.

It almost goes without saying, but hiring based on your core values is the starting point for maintaining good employee engagement. Barring that, or assuming your values are not sticking, reinforcement is key.

Sign with value messages to promote employee recognition.

Every organization has (or should have) different core principles that guide what and how they do things. At MentorcliQ, we live by our “FunHAT” value: Fun, Helpful, Ambitious, and Thoughtful. We hire on those values, and we promote them regularly as a team.

Employees that are appreciated and valued by their business leaders and HR managers are more likely to go the extra mile in performing their duties. They’re also far more likely to exhibit or align themselves to the core values, assuming those values are strongly embedded in the culture. At the same time, they will pay it forward with peer recognition.

If you want to promote a culture of recognition and make it one of your primary organizational values, then you have to start by giving staff recognition when and where it is due.

Increase employee motivation

The best employees are able to deliver their best performance when they feel motivated. Employee recognition is one of the best ways to encourage employee behavior. Morale is directly proportional to an employee’s ability to contribute to your organizational goals and objectives.

You can employ various employee recognition ideas to promote that feel-good sensation that makes employees want to do better. It can also have a direct positive impact on your company culture, such as less stress and a lower absenteeism rate.

On top of the above benefits, employee recognition is becoming a more valuable tool in the company’s arsenal because of an ever-shifting workforce. These shifts are fueled by the following factors:

  • The entry of Millennials and Gen-Z into the workforce
  • Global financial and economic crises
  • Increasing competition in talent acquisition

When to Give Employee Recognition

Timely recognition is integral to the success of your employee recognition program. Make sure you know when to recognize employees for the employee’s contributions to short- and long-term goals.

To start with, you can give employee recognition when they achieved a certain target or goal. For example, your target was to hit 1,500 sales per month. When an employee not only hits that mark but crushes it, generating over 2,000 sales, then may want to give that employee recognition for that achievement.

You can also give employee recognition when they present new ideas or delivered an excellent presentation. It’s also a good idea to join your employee in celebrating their career milestones. For example, celebrate work anniversaries and make those anniversaries a team-wide or company-wide tradition. It’s a great way to honor the employees’ hard work for the company as well as to appreciate them for their loyalty to your organization.

Promote company values

Every company has a set of core values that they observe and live by. Employees can help advance those company values and are more likely to do so when they’re recognized for it.

Whenever an employee promotes and reinforces your company values in a way that distinctly adds value to your organization, try to find a way to recognize them for it. Recognizing employees who exemplify specific traits or act according to your company culture will love to be appreciated for their efforts in pushing forward your organizational values.

Innovation

Innovation and creativity are crucial traits that employees possess that enable organizations to advance in their respective industries. An innovative employee requires employee recognition as they offer your organization new ways to overcome challenges and seek out new opportunities.

This type of employee is also worthy of employee rewards because it allows you to penetrate new markets, or come up with new product or service ideas for your customers.

Team-first behavior

Promoting a team-first culture and attitude is worthy of employee recognition. The only way for your organization to achieve its goals and objectives is when the whole team is working together as one cohesive unit.

These types of employees are an important organizational asset. They not only improve your performance management but they can also motivate others through giving positive feedback and peer recognition.

Willingness to learn

Individuals who are willing to learn new things and humble themselves in the workplace setting deserve employee recognition. This type of employee views each learning process as an opportunity for personal growth and professional development. When they do grow and develop, it’s your organization that enjoys the benefits.

Motivated

Offer employee recognition to team members that exhibit a high level of motivation. The employees who take the initiative and do things before they are asked to deserve recognition because they set a good example for other employees.

On the flip side, intrinsic motivation happens when employees feel valued. In addition to task, motivated employees are more likely to be productive and excel.

Adaptability

When you hire employees, you designate them to do a specific task or role. Over time, their scope of roles and responsibilities change. Employees that are able to adapt to their new roles and positions deserve employee recognition.

Catch those high potentials before they’re gone! High-potential employees are some of the first to leave if not offered proper guidance and career building. Read our Employee Development eBook or our Mentoring Soundbites YouTube video covering How to Develop High-Potential Employees.

Try to acknowledge the difficulty of adapting to new challenges and roles. The employees who rise up to the challenge set a good example for their coworkers.

Loyalty

Give employee recognition for those that achieve a specific milestone in their career within your organization. For example, you may want to celebrate employees for every year that they have spent with the whole company.

According to the Bureau of Labor Statistics, most employees last an average of 3 years in an organization. Therefore, employees who have been with your organization for longer than that deserves to be recognized.

Given the high cost of turnover, recognizing employees for their tenure is increasingly important. Losing employees and replacing them with new ones is disruptive to both productivity and team morale. Celebrate longevity to help emphasize how important and valued it is at your organization.

Examples and Employee Recognition Ideas

You can use different forms of employee recognition ideas and approaches for staff recognition based on the circumstances and the type of achievement or traits you wish to celebrate and reinforce.

It’s not uncommon to hear employees complain about a lack of appreciation in their workplace, which can motivate some to leave and find better opportunities. As an employer, it’s your responsibility to develop great employee recognition ideas to make them feel appreciated and valued.

You don’t have to spend a large amount of money on tangible rewards. Although it’s important to add tangible rewards to the mix, recognition does a better job of giving employees much-needed social capital.

The following are social recognition ideas and tips to consider for your employee recognition program planning:

  • Hold an employee appreciation day: Celebration events like an employee appreciation day is one of the best ways to show your support to employees. Recognition programs like this one can help your employees feel valued as part of the whole company. Going all out to plan this event takes a lot of time and resources, which they will appreciate. In return, you can boost their morale and give them positive reinforcement.
  • Celebrate a work anniversary: A work anniversary is one of the career milestones that you can celebrate with the entire team. Work anniversaries can be celebrated by sending your employees personalized notes and giving them treats that they can enjoy. Simple gestures can go a long way to show them you appreciate the employee’s hard work.
  • Give them a shout-out on the company’s social media: Give your employee recognition the platform it deserves by highlighting top performers or best employees on your social media page. It helps to recognize the work they’ve done for your organization.
  • Build an employee recognition wall: Have a dedicated space in your office wherein you can showcase your top employees for the month. You can have one for each department or you don’t have to categorize them at all. Offer employee recognition where you see fit. This approach will give your employees a sense of pride and accomplishment in their work.
  • Treat them to lunch/dinner: You can host a lunch or dinner for your top employees as a way of saying ‘thank you’ for their hard work and contributions. This technique is employed by many top companies wherein the business leaders invite their employees to lunch or dinner for communal eating. It’s also a great way for the team to bond and develop strong emotional relationships with each other.

Building a Successful Employee Recognition Program

If you want to improve your employee recognition program, take note of the necessary elements you need to ensure that you can show appreciation in the best way possible. Come up with a solid plan to ensure that you use it as a tool to accomplish your company goals.

Know your goals

Start with a goal when designing an employee recognition program. Maintain clarity with these goals as you progress into the development of this program. Do you want to improve employee retention? Do you want to increase employee engagement? Align your recognition program with measurable KPIs.

Knowing your goals can help you map out the steps that will ensure alignment with your long-term goals.

Make it timely

It’s not enough that you give frequent recognition. You need to make them timely, too. Employees should know what behavior or accomplishment is being recognized so they will know what they need to continue doing to earn the recognition (or rewards).

Keep it simple

A good employee recognition program should be easy to use. The goal is to make employees appreciated; it’s that simple. Therefore, the methods you use must be simplified as well.

Be flexible

Each organization and its employees is unique. You must be willing to adapt and be flexible in your approaches to ensure that you have the right system for employee recognition that fits your organizational culture and values. It also makes distributed teams feel closer and connected.

It’s also a good idea to involve your employees. Give them employee survey forms to fill out or create a suggestion box. Encourage them to solicit all the ideas they can generate to improve your current recognition system.

Involve Leaders

Top-down recognition is a good way to ensure maximum impact with your employee recognition efforts. You want your employees to feel that the leaders take feedback and performance seriously. Therefore, it serves as a challenge for them to continue doing their best.

However, don’t just go top-down. Launching a Reverse Mentoring program will help put junior-level employees in engaging relationships with senior leaders. Inviting and enrolling junior-level team members to be mentors in a Reverse Mentoring program is an excellent way to recognize them for their contributions and potential. It will also help expand their network and boost their career.

Measure the Impact

If you’re investing company resources to develop an employee recognition program, make sure you have a way to quantify the results. You can also get your employees’ thoughts by conducting a survey. You want to know if you are doing enough to show and recognize your employees’ efforts.

Did you know that mentoring can be a valuable addition to your employee recognition strategy? It’s simple! Use mentoring programs to get intel on which employees are going above and beyond. Then, recognize them for their contributions as mentors or mentees.

author
Sam Cook
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