Wondering how an employee recognition or incentives program can provide both financial and cultural value to your organization? Read on.
In today’s growing economy, it’s no longer enough to provide a decent compensation package to expect your employees to stick around longer than a couple years (although compensation is important, too!). In order to provide value to your employees and increase your business value at the same time, you’ll need to find a program that uniquely rewards while growing worker motivation at the same time. Pay and benefits packages are what initially attract talent to your organization, but incentives & recognition are what will retain them.
According to recent studies by Gallup and others, employee recognition is highly correlated to improved employee engagement. If you’ve read any of our other blog posts, you’re probably familiar with this concept already.
The most effective way to implement a recognition program is with a well-designed, formulated approach that is based on data and analysis of your company’s business strategy. Without a carefully designed program, you run the risk of setting up an off-the-shelf program that may work for another company, but might not work for yours.
In order to prove the full value potential of a recognition program it should be integrated into your organization’s strategy and desired culture. Much of the value from employee recognition programs comes in the form of an overall improved workplace culture and worker motivation.
Some simple steps to effective recognition include the use of both formal and informal recognition (simple “thank yous” can make a huge difference!), providing a wide variety of recognition rewards, and recognizing workers frequently.
Your organization’s ROI will, obviously, be unique to your goals and budget. But there are a few things we can tell you about some best-in-class organizations that utilize recognition programs:
- Productivity—Business units in the top quartile of all engagement responses have 50% higher productivity than those in the bottom 25%.
- Employee Turnover—Business units in the top quartile have a 13% higher success rate (lower turnover) in comparison to those in the bottom 25%.
- Profit—Business units in the top quartile have 44% higher profitability than those in the bottom 25%.
- Customer Satisfaction—Business units in the top quartile have 50% higher customer satisfaction than those in the bottom 25%.
- Overall Job Performance – Companies with high employee engagement had a 19% increase in operating income and a 28% increase in earnings per share over a 12-month period.
(Source: Incentive Research Foundation)
So, as you plan your budgets for 2016, take a look at your recognition strategy. Do you have one? What is it worth to you?
If you’re looking for recognition and incentive ideas, check out our merchandise and travel awards on our website. And remember: simple thank-yous go a long way, too.
To read more about the topic of value & ROI of recognition programs, head on over to this study summary from the IRF.