The Value of Employee Recognition and Reward Programs for Your Organization

The great Dale Carnegie knew how to win friends and influence people. He was also one of the earliest people to understand the incentive theory of motivation. This understanding is clear from his words, “People work for money but go the extra mile for recognition, praise and rewards.”
The incentive theory is the idea that outside reinforcements or incentives positively influence human actions and behaviors. This is because incentives motivate humans to act in ways that could lead to rewards. The theory works in every aspect of human society, including the business aspect.
One of the most powerful incentives in organizations is to recognize employees, show appreciation for their contributions and achievements, and reward them for exhibiting desired behaviors, and exceeding the company’s expectations.
Now, the question is why?

Motivate Employees to Produce their Best Work

In 2021, O.C. Tanner, a software and services company, sent out an employee survey to understand drivers of workplace engagement and motivation. One question in the survey was, “What is the most important thing your manager or company currently does that would cause you to produce great work?” A majority of respondents – 37% – gave one answer: personal recognition. In a more recent survey, the same company also found that when employees are recognized, the probability of great work increases by 18X. These findings show that recognition and hard work go hand-in-hand.
Other surveys – and Ergode’s own experiences – have also established a clear link between recognition/rewards and employees wanting to do their best work. For example, between 2018 and 2020, Great Place to Work, a firm specializing in corporate culture research and consulting, analyzed 1.7 million employee survey responses. They found that people who feel recognized at work are 2X more likely to go above and beyond in the workplace. Simply put, organizations that authentically and consistently recognize employees can get them to produce great work.
This matters because when individuals produce great work, their teams and organizations produce great results. Also, when great work is happening across the organization, there is a 109% increased probability of organizational growth. And what would be the key to great work and organizational growth? It’s simply employee recognition and rewards!

Enhance Employee Experiences and Prevent Burnout

Personalized recognition programs help to create meaningful experiences that enable employees to feel connected to the organization. These programs celebrate all kinds of achievements, no matter how big or small and maintain an energized environment where employees feel inspired to perform and excel rather than feeling disconnected and burned out.
In such companies, both leaders and peers appreciate employee contributions and show their appreciation, which makes employees feel that they are contributing to the organization’s purpose and success. Impactful and meaningful programs acknowledge people as individuals and consider how they respond to recognition – public versus private recognition, occasional “big bang” rewards versus more frequent but smaller rewards, etc. By planning recognition moments based on employees’ preferences, these companies can design programs that appeal to their people and affect their workplace experiences in a positive way.
On the other hand, companies that don’t have an employee-focused recognition strategy see the odds of negative employee experiences and burnout increasing by 29%. In fact, burnout can accelerate in any firm where employees are not recognized. When they feel that they are working hard but not being appreciated, the odds of burnout can go up by as much as 45%. The best way to prevent burnout: appreciate people through recognition and rewards programs.

Differentiate the Company as a “Great Place to Work”

Think about companies that consistently make it to “great place to work” lists and names like Ergode, Google, Accenture, and Spotify usually crop up. One reason is that these firms have greater numbers of happy employees who are satisfied with their work and workplace. A big part of their happiness and satisfaction comes from being recognized and rewarded for their efforts, contributions, and achievements.
Employees who feel appreciated are not only happier, but also more engaged and motivated, which helps create a positive company culture. They also tend to say positive things about the company, such as, “promotions are fair”, “the company values its people”, “the firm operates with integrity”, “the workplace environment is uplifting and healthy”. They consider themselves fortunate to work for the firm and willingly talk it up in their personal and professional networks.
Conversely, employees who don’t feel recognized rarely describe their workplace as great. If anything, they say negative things, such as “we are treated unfairly”, “the work environment is toxic”, “leaders engage in scare tactics”, or “there is rampant favoritism”. All these statements could tarnish the company’s reputation instead of establishing it as a great place to work.

Increase Employee Retention

A well-designed and meaningful employee recognition program can enable employers to attract and retain the best employees, and keep them engaged and productive. Here’s proof: In one SHRM/Globoforce survey, 68% of HR professionals said that employee recognition positively impacts employee retention. Another 56% said that such programs also help with recruitment.
When people are acknowledged and appreciated for their contributions, it creates a culture of gratitude and a workforce of satisfied, happy employees. These employees are more likely to trust the company, align with its values and mission, and stay with it for a longer period. Moreover, in companies where peer-to-peer recognition and meetings are encouraged, people tend to celebrate their coworkers rather than compete with them. These firms see 2X greater odds of retaining employees and lowering turnover, which reduces the costs associated with repeatedly recruiting, onboarding, and training new employees.

Conclusion

Rewards and recognition programs are a powerful way to motivate employees and maintain the organization’s momentum on the success path. That said, recognition programs need to be carefully designed. They must also be meaningful and personalized, rather than focused on simply filling some “recognition quota”. When employees feel valued and recognized for their efforts, they are more likely to be motivated, engaged, and committed to the success of the organization.

Leave a Comment

Your email address will not be published. Required fields are marked *