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Talent Management Perspectives

Published October 2009

Appreciating Employees Can Do Wonders for Engagement, ROI

 

  Deanna Hartley

It doesn't always take gigantic raises, bonuses or promotions to keep a workforce engaged and productive. Sometimes, all that's needed is a simple pat on the back for a job well done.

High levels of engagement have been linked to tangible business results - and recognition is one of the key drivers of engagement, a recent study confirmed.

"There's a general understanding out there that employee satisfaction isn't enough anymore," said David Chittock, president of Incentra Inc., a company that delivers comprehensive incentive management services, and member of The IRF Research Committee.

"Organizations that have a high level of employee engagement are going to have workers that are more productive; they work harder; they're happier; they stay longer; they come to work every day - and the study showed that recognition is one of the key pieces of the puzzle that lead to people being happy and engaged in an organization."

The report - titled "The Value and ROI in Employee Recognition: Linking Recognition to Improved Job Performance and Increased Business Value -The Current State and Future Needs" - was conducted by the Human Capital Institute, the Forum for People Performance Management and Measurement, and the Incentive Research Foundation.

Sometimes, employers tend to use recognition, rewards, awards and incentives interchangeably even though they're inherently different, Chittock explained.

"Recognition is an after-the-fact display of appreciation or acknowledgement to individuals or teams for behaviors and actions that drive organizational goals," he said.

One of the key factors to achieve success in the recognition process is for managers to know their people.

"Some people like to be recognized in front of others and some people don't," he said. "If there are people who need to be put up on a stage and given a lot of [attention], then do that; and if there are people who need [you] to close the door in the office and tell them you appreciate the job they did, do that."

The types of recognition can be classified under three broad categories.
 
1. Day-to-day recognition: "Day-to-day recognition is really anything that managers or individuals can do to show appreciation to employees in the workplace - a pat on the back, a thank you note or gathering the troops in the department to talk about Betty's great accomplishment," he said. This type of recognition doesn't necessitate distribution of any tangible items and can be very cost-effective yet valuable. It should occur frequently in an organization, Chittock explained.

2. Informal recognition: "[Here,] there's some type of a process in place, such as a nomination process, where people can write in examples of employees who have done a great job in an above-and-beyond way [rather] than a day-to-day thing," he said. This could include on-the-spot recognition, where the employee receives something tangible such as a certificate or points in a points bank, Chittock explained.

3. Formal recognition: This type of recognition is reserved for high honors and only needs to occur on a quarterly or annual basis, Chittock said. "[This is when employers should] take the best of the best and have them nominate people, or if by some metrics certain teams or individuals have performed at high levels, employers could mention their efforts in a newsletter or have an annual banquet for them," he said.

Recognition programs become truly meaningful and impactful only when employers take into account all three types of recognition, he explained.