Effective recognition programs can make a big difference to the metrics that organizations care about. Specifically, Voluntary turnover rates. Annual voluntary turnover rate is defined as the rate at which employees enter and willingly leave a company in a given fiscal year. Annual voluntary turnover rate, is a ratio of number of voluntary separations during the year by the average number of employees during the year. A research by Bersin & Associates, a talent management and HR advisory firm (recently acquired by Deloitte) talks about the effectiveness of these recognition programs. The study reveals that companies that provide ample employee recognition have 31% lower voluntary turnover rates than companies that don’t. This is a good sign that those employees are happier. And it’s basic psychology that employees who are affirmed for good behaviour are more likely to repeat those actions and that, in the long run, will build a stronger company.
In organizations with effective employee recognition, employee engagement, productivity and customer service are about 14 percent better than in those where recognition does not occur.
Employee recognition today is a $46 billion market (gold watches, pins, thank-you awards, plaques, etc.). Looking at where this money goes, we find that 87% of the recognition programs focus on tenure. Most of these tenure-based rewards programs have been there for ages; since the labor unions forced management to give employees “service awards” and hourly raises for tenure. However the sad part about this is that only about 58% of employees in most large companies know about such programs.
Tenure based reward programs have virtually no impact on Organizational Performance. It’s like staying an extra year at your job so you could get a 10-year pin. Plus they motivate at an individual level whereas recognition programs are meant for positively influencing teams.
Yes, that’s right. People get rewarded for sticking around. Instead they should get recognized for their positive efforts towards the team, organization.
On the other hand, recognition programs at a team level enable better communication and add emotional value to the employees. It has been shown to improve morale, productivity, and even retention. Organizations can design recognition programs at a team level with decentralized budgets, helping better utilization of these funds and add more value to the team and the organizational performance.
Just think about the amazing implications of recognizing employee’s contributions. It shows you are paying attention. It shows you care. It makes people feel valued. It makes people feel awesome. It motivates them to do more for the team. And as business guru Tom Peters notes, “People don’t forget kindness.”
In a way you can turn simple ‘thank you’ or a ‘good job’ into a tool to make your team more productive. Motivated, productive and happy teams can have a positive impact the organization’s performance.
Recognition and appreciation play an important role in motivating the team. Leadership is about empowering others in helping realize their own abilities. Be a leader, put your belief in people, communicate and watch them raise to your expectations.