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The Importance of Employee Recognition

6 min read
Zoe Brankin
Zoe Brankin

Everyone has heard about the benefits of proper employee recognition — at length! Staff satisfaction is a vital component of business in 2022. When workers feel valued by their employer, whether a small startup or a massive global corporation, they’re reliably more engaged, motivated, and likely to put in the hard yards. 

And yet, many organisations still fall short on delivery. 

Businesses that have implemented formal recognition practices for their employees have a massive 31% lower rate of voluntary turnover and are 12x more likely to have strong business outcomes than organisations with no recognition program.

And it doesn’t even need to be a significant overhaul of your business practice. When companies spend just 1% or more on recognition, 85% notice a positive impact on engagement.

So, we know that employee recognition is important. But do we know why? And do you, as a team leader or business owner, know exactly how to give your employees the recognition they deserve? It might just be the game-changer your organisation needs. 

Let’s recap: What is employee recognition? 

Employee recognition considers all of the ways an organisation shows its appreciation for its employees. Recognition can take on many forms, and contrary to popular belief, it doesn’t always have to be monetary. Team leaders and business owners can show their appreciation in many different ways, such as celebrating achievements or praising someone who has gone above and beyond expectations. 

Why is employee recognition important? 

Introducing proper employee recognition processes into your daily practices can considerably impact many areas across the business. 

The connection between employee recognition and engagement

An engaged employee is a happy employee. Right? Engagement is one of the essential qualities you should want from your workers –– and there’s no faster way to get there than with proper recognition.

Consider the results from Bayhealth Medical. When the organisation implemented a formal recognition strategy, employees reported feeling a greater sense of belonging and connection to the company and with their coworkers. This can increase engagement and, in turn, staff satisfaction. But it also can’t be a once-and-done exercise. 

Recognition needs to be ongoing rather than a one-off acknowledgement. A 2020 UK workplace culture study found that half of the employees who had been recognised within the past week were very engaged. Fantastic numbers. But unfortunately, those numbers dropped to less than a third of employees recognised in the last month, and just 16% in the last year. 

Recognition can lower the turnover of staff

The proof is in the pudding. Employees want to feel appreciated, but more than that, be recognised. More than half of employees want more recognition from their direct manager, which means more than half of workers may soon be driven to quit their jobs if they don’t get it. 

Ask yourself, what are you doing as a business to recognise your employees?

It’s a perk for potential candidates

There are many things professionals look for when job-hunting: salary, perks, company culture… the good stuff. Increasingly, people are looking for more. It’s become apparent that new applicants seek out jobs in organisations with established employee recognition programs –– you might write it off. Still, it continues to be one of the most important employer traits candidates looked for in 2021.

If you’re hoping to recruit the top talent into your organisation — and keep them on board — having a good track record of employee recognition is essential. 

Increased productivity

Happier workers are more productive at work. And not just marginally. Happiness makes staff around 13% more productive. Big hitters such as Google now invest more in employee support, and satisfaction has risen by an eye-watering 37% as a result. 

Your organisation can foster a higher sense of well-being and happiness by simply instating proper employee recognition, leading to more productivity across the board. A small investment in a recognition program can pay massive dividends. 

Improved employee satisfaction

We all go into work wanting to have some purpose. Whatever our job role is, it’s important to make a difference –– but if no one recognises that, what’s the point in continuing? Multiple workplace studies have proven this direct link between recognition and a sense of purpose. 

A recent study found that three-quarters of US employees who were happy with the amount of praise their teams received also strongly agreed that they felt their work was valuable and useful. 

Build your company culture

Despite what some tech startups may think, company culture isn’t just about having free beers on Thursdays, nap pods or an office ping pong table (although they are pretty great). The culture of a company is built on the back of employee satisfaction.

If people aren’t happy with management practices and don’t feel adequately recognised for their work, it will be near-impossible to build a positive culture in the workplace. 

Decreased absence of staff

More engaged staff leads to staff more eager to come to work. Period. While many absences can be attributed to sick days or personal issues, there’s no denying that a lack of employee satisfaction can lead to this increased absence rate.

According to a Gallup report, businesses with employees actively engaged in their work have lower employee absenteeism rates –– by up to 41%. That’s nothing to be scuffed at. 

How to start creating a culture of recognition

Half of all employees aren’t satisfied with the level of recognition they receive. We keep emphasising the importance of putting an effective recognition program into place. For instance, according to Deloitte, three-quarters of professionals reported that a simple ‘thank you’ is enough to make them feel recognised at work. Just, ‘thank you’.

So, is there a way to ensure your employees don’t fall into the dissatisfied category? Of course, and we are here to help! 

Include everyone in your recognition program

The more team members within your organisation that actively show recognition, the greater impact it will have. As a leader, it is up to you to encourage participation on every level whether it’s peer to peer, manager to staff or even staff to manager. 

Don’t forget about those who are not in the office! Over recent years, a seismic shift has pushed much of the workforce into a remote environment. Many organisations are now adopting hybrid working or fully remote approaches, meaning those in-office perks are going unused and those Friday 4 pm thank you’s are harder to come by. 

Of course, that’s not the only way to recognise employees –– but it’s important to come at this with a multi-pronged approach. While financial bonuses, gifts or internal promotions are a great way to show recognition, sometimes a more personal touch is needed. Going back to the simple ‘thank you’, that’s all your employees need to feel recognised in the workplace. 

Make it frequent 

Your recognition program can’t just be a one-time thing. The more frequently your employees receive recognition, the greater the effect it will have. This is where you’re going to get increased retention and engagement. 

Make it specific

It’s no secret that if employees are recognised for a certain behaviour, they will repeat it. So, how do you link recognition to a specific action? It’s simple – do it in the moment. Real-time recognition is an easy way to establish a direct link to those actions you want to see more of, and your employees will find it more meaningful. 

Publicising recognition 

If you allow your employees to make recognition public, it will amplify the effect. Whether through a team-wide Slack channel, company social media channels, company newsletters or even through a platform like Mo (more on us below), employees may find it more meaningful that peers can engage through reactions or comments. 

Employee recognition software

Transform Your Culture 1

Mo is an employee engagement platform that can help leaders improve collaboration and morale, reduce employee churn and drive change. 

Our platform creates a vibrant culture by developing team habits, encouraging people to celebrate success, recognise results and appreciate colleagues.

Your complete toolkit for connecting and motivating teams in the new world of work. Book a demo with our team today!

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