Employee Rewards
If you’re a
supervisor or manager, you probably know how much more productive your team is
when you make the effort to recognize each person’s
contribution. In order to take employee recognition to the next level, however, and
establish a company-wide system of rewards, you’ll need to be able to present
the investment to your CEO or CFO in terms of the financial bottom line.
Fortunately, a growing body of research makes this
easy. A Workplace Trends Report finds that recognition programs yield
50 percent higher sales. With a solid positive ROI to back it up, an employee
recognition program can be treated as part of your company’s overall strategy.
In recognition in the workplace points out, “While recognition is not new, it
is finally becoming more strategic as programs align recognition with business
objectives and desired behavior.” Here’s some of the research that describes
the nuts and bolts of why rewarding employees ends up boosting the company’s
bottom line:
Rewards and Recognition Strengthen Employee Engagement
The benefits of expressing your appreciation of
employees begin with engagement. Unengaged
employees can
cost your business thousands of dollars, because they’re not concerned about
being efficient during their work hours. Instead, they tend to waste time and
engage in countless distractions, just trying to get through the day in
whatever way they can.
If you have an employee who wastes just 15 minutes a
day, that’s an hour and a quarter per week, or 3.125 percent of a work week. To
avoid the lost revenue of alienated workers, you might be tempted to block
social media sites from company computers, or institute various rules about not
coming back late from breaks. However, the fact is that what really motivates
people is positive reinforcement. Recognition
is the number one driver of employee engagement, according to us. Every 1
percent increase in engagement results in an additional .6 percent growth in
your company’s sales. The Cornell research paper mentioned above notes that
when employee engagement varies, percent of that variation is directly due to the
amount and quality of recognition that the employee receives.
Engaged Employees Show Up and Pay Attention
Balancing work and outside life is tricky for everyone
as our lives become more complex, but when employees are highly engaged in
their jobs, they manage to show up to work despite the outside commitments that
compete for their time. In a research study states that engaged
employees take
fewer than three sick days each year, on average, while disengaged ones take
more than six sick days. Your HR department is probably all too well-acquainted
with the high cost of accidents and absences, and anything you can do to reduce
these figures will contribute to the long-term sustainability of your
organization.
There’s Space for Your Company at the Front of the
Pack
Despite the proven fact that dedicating resources to
employee recognition is financially prudent, many
organizations still hesitate to follow through with this strategy. “One of the
top concerns for HR executives is how to raise employee engagement, and for
good reason. Engagement is on the decline across the world, and that spells
trouble for business leaders everywhere.”
Fewer than one-third of employees
would strongly agree with the statement that they have received
recognition or praise for doing good work within the last seven days. The
authors of this Gallup study state that the role of recognition in producing
engagement “might be one of the greatest missed opportunities for leaders and
managers… in their search for new ideas and approaches, organizations could be
overlooking one of the most easily executed strategies: employee recognition.”
The fact that many companies are still missing out on the benefits of having
a strong employee rewards program means that you can gain extra
ground on your competitors by putting the power
of recognition to work in your organization.
Employee Recognition Is Key to Staying Competitive
It’s beautifully logical, when you put it all
together: Embracing a system to optimize employee appreciation and recognize
others within your company will yield an abundance of benefits. According to
the Cornell research,“Recognition programs, on their
own, can help in still and reinforce corporate values, help with retention, and
positively impact financial results. They also boost productivity, engagement,
profit margins, customer retention, employee retention, ROE and ROA.” Taken
together, these advantages will provide a robust return on your investment to
recognize employees. Furthermore, they will add luster to your employer brand
and help you compete for the top talent in your industry.
To learn more about how to recognize
employees and
build a strong business in a time of declining employee engagement, download
our E-book
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