How investing in your people is the key to business growth
- 3 Min Read
One powerful tool leaders have to drive engagement and performance remains untapped in the majority of organizations: employee recognition
Employee recognition is not just a feel-good gesture; it is a strategic business tool that can drive employee engagement, retention, and productivity.
But how can leaders ensure that recognition strategies are effective and yield a return on investment for both their people and their organization? And what are the pitfalls if strategies are not in line with workplace culture.
According to a recent report by Gallup and Workhuman, recognition can indeed have a significant impact on the bottom line.
The results of their analysis concluded that doubling the number of employees receiving recognition or praise for their work in the last week can lead to a 9% increase in productivity, a 22% decrease in safety incidents and a 22% decrease in absenteeism.
The report further estimates that a business of 10,000 workers could realise almost $92m in gained productivity alone. Despite a significant improvement in business outcomes due to regular employee recognition, only two in ten leaders see it as a major strategic priority.
In today’s competitive talent landscape, investing in your people through strategic recognition is not only a smart business decision but also a crucial step towards retaining top talent, boosting engagement, and improving organizational culture.
According to the report, by making recognition an important part of company culture, a 10,000-person organization with an already engaged workforce can save up to $16.1 million annually due to reduced employee turnover.
In addition, according to a study conducted by Workhuman and Gallup in 2022, employees who are fulfilled by recognition are more likely to be engaged. When employees feel engaged, they show up each day ready to give their best. They also work harder, are more productive and are less prone to burnout.
The research concluded that to see the positive impacts of implementing recognition programs, businesses need to create cultures of recognition where praise and acknowledgment pervade every level of the organization.
So how can HR leaders create a culture of recognition? The report suggests several best practices, including making recognition a strategic priority. This involves HR leaders communicating the importance of recognition to all levels of the organization and align recognition programs with business goals.
By aligning recognition programs with business goals, HR leaders can ensure that recognition initiatives are not just feel-good gestures but also contribute to the bottom line. This strategy also helps to create a culture of accountability and results-oriented thinking, where employees understand how their efforts contribute to the organization’s success.
The report also stresses the need for frequent and timely feedback. Recognition should not be a once-a-year event. HR leaders should encourage managers to provide regular feedback and recognition to their teams, ideally on a weekly or monthly basis.
HR leaders should offer a variety of recognition methods, such as verbal praise, written notes, public celebrations, and monetary rewards. Peer-to-peer recognition should also be encouraged, the report states, as it can be just as powerful as manager-to-employee recognition.
There is compelling evidence that recognition is not a discretionary expense, but a strategic investment in employee engagement, retention, and business performance.
HR leaders who prioritize employee recognition and make it a core part of their talent strategy will reap the rewards of a more motivated, productive, and loyal workforce.
Sign up to Workhuman’s webinar to understand the importance of recognition and it’s impact on business outcomes.