Employee recognition is defined as the formal or informal acknowledgement of a team or person’s exceptional effort or behavior that supports the values and goals of the business in a timely manner.
When employees’ hard work is recognized it lets them know that their contributions are valued, and can motivate others on the team to improve their performance. Showing appreciation can also lead to greater job satisfaction, along with an increase in productivity.
Everyone needs to feel that their efforts are appreciated, and the best way to do so is by recognizing hard work. There are two factors that need to be put into practice to ensure a pleasant work environment and a successful employee recognition program. The first step is to realize when an employee deserves praise and let them know.
It is not uncommon for management to pass over these chances simply because they don’t feel like they have the time to stop and praise employees, and this often leads to low job satisfaction rates.
The second aspect of employee recognition that needs to be implemented in the work place is to communicate praise.
Whether this is done informally with a few words spoken directly or a more formal occasion, simply recognizing the hard work vocally can improve communication between management and employees, motivate others, improve company loyalty, and increase overall job satisfaction.
With all of the benefits associated with recognizing employees’ efforts, many business still do not show appreciation for exceptional work. Praise and acknowledgement are valuable tools that management can use, and the rewards for the business outweigh the time and effort that goes into implementing an effective employee recognition program.
Cost-Benefit Analysis of an Employee Recognition Program
If the employee recognition program is implemented properly in the workplace, the monetary cost to the business is relatively small and the rewards will often contribute to the company’s success.
The cost of the program will generally depend on an individual business, and whether the recognition will be shown in a informal manner or at a more formal occasion.
To show how recognizing employees can help a company a meta-analysis was conducted in 2003 by the Gallup Organization who surveyed 10,000 businesses in 30 industries and found that the benefits were greater than the cost of the program.
Benefits
- Behavior psychology teaches that good behavior is reinforced when it is praised, and this is often the result when employees are recognized. Performance at work generally improves, along with productivity.
- Employee satisfaction is improved and companies see lower turnover rates, which helps save money on training new workers.
- The direct feedback often improves communication.
- Customers have a higher rate of satisfaction and loyalty.
- Teamwork between employees is improved.
- Employees have fewer missed days and exhibit lower levels of stress.
- Fewer job related accidents are reported and safety records are improved.
Costs
- Time spent creating and implementing the recognition program.
- Time it takes to show the employee appreciation.
- The financial cost of the employee gift or award.
- Cost and time spent teaching managers how to show and give recognition, and to implement the program.
Now that you are aware of the costs vs. benefits of employee recognition, you will be in a better position to make relevant decisions in your business.