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Why is Employee Recognition Important

Why is Employee Recognition Important

Motivation Minute Blog


While measuring the success of incentive programs is only a recent phenomenon, the most recent Incentive Federation study and various other private surveys reveal one glaring truth - employee recognition is more important than it has ever been. Here are some startling facts:

  • 75% of workers are actively or passively looking for another job
  • Only 14% of workers are satisfied with their jobs
  • 60% do not feel motivated to drive employers’ business goals
  • 80% of employees believe they get no respect at work
  • 86% of employees are not willing to go the extra mile for the company
  • 79% of US workers say they are not engaged in their job
  • Between $300 & $400 billion annually is lost in productivity due to employee disengagement

While the numbers are staggering from a lost productivity standpoint, the solutions are relatively simple. Here are some simple ways to turn that culture around:

  1. Create a fun work environment. Happy workers are productive workers
  2. Stress an open employee - manager relationship (employees leave managers, not companies).
  3. Use all three forms of recognition - informal, formal, and spot recognition. Be consistent with it.
  4. Create a culture where you are the company of choice in your marketplace (and a structured "inbranding" strategy can be key).
  5. Communicate, Communicate, Communicate. In all forms.
  6. Make your company a desirable career choice
  7. Insist on a work/life balance for your employees

Luckily, recognition is not rocket science. Management's behavior towards the discipline should be closely monitored, however. The carrot vs. the stick debate has long been decided. A Stanford Business School study reiterated what common sense has told us; 30% of employees improve performance after being criticized, but 90% improve performance after being praised.

Benchmarking is the last component that should be added to the mix. So many companies and managers fail to connect income and rewards to performance. Consequently, 81% of workers report that an improved performance will not result in any rewards (so why excel) and 60% of managers admitted that their compensation would not benefit from higher productivity. The most astounding statistic from this Compensation and Benefits Review study is that only 3% of base salary separates the average from the most productive.

Jack Welch, former CEO of GE, got it right when he said, "We spend all our time on people. The day we screw up the people thing, this company is over." Too much money is invested in attracting the right people to haphazardly let them become disengaged and unproductive.

For an index of materials used to compile this research, email the author.


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