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Employees are struggling with burnout, disconnection, and low morale more than ever before. But there’s a clear solution: recognition. Research from Achievers Workforce Institute (AWI) reveals that employees who are recognized at least once a month are more likely to be highly engaged, committed to their jobs, and more productive compared to the average worker.
Let’s look at some of the biggest ways employee recognition can impact your business.
Why is employee recognition important?
Employee recognition is important because it impacts retention, engagement, and performance. Organizations that prioritize recognition see higher employee retention rates, increased engagement, and improved overall performance. This leads to significant benefits for the company’s bottom line, such as higher stock prices and better NPS scores.
How employee recognition affects engagement
There may not be any aspect of the employee experience more impactful than engagement, and recognition is the fastest way to an engaged workforce.
The below statistics highlight the influence recognition has on boosting employee engagement:
- According to a report on engagement and retention from AWI, 90% of employees say that being recognized for their work motivates them to go the extra mile.
- Research from Gallup reveals that 74% of employees who receive recognition strongly agree that they find their work valuable and meaningful.
- Harvard Business Review highlights that employees who believe their managers are skilled at giving recognition are 40% more engaged than those whose managers do not offer the same level of recognition.
Since 2016, Achievers has been powering Applause 2.0, Scotiabank’s centralized recognition program, that is accessible to employees worldwide. Following the platform launch, Scotiabank experienced a surge in recognition activity, with 93% of their nearly 90,000 employees actively using the platform. The average number of recognitions sent per employee increased by nearly 60%.
Additionally, Scotiabank discovered a strong correlation between recognition activity and employee engagement. Managers who sent more recognition saw higher engagement scores, demonstrating the connection between recognition and employee engagement.
How productivity is increased by employee recognition
When employees know they’re appreciated, it shows in their work. Research shows that increasing recognition from quarterly to monthly can boost engagement and productivity by 40%, and, when combined with a well-designed recognition program – can improve overall employee performance by 11:1%.
Studies also indicate that boosting the frequency of recognition significantly enhances employee productivity. According to AWI’s 2023 State of Recognition Report, employees who receive recognition on a monthly basis are more likely to feel engaged and productive than those recognized only quarterly.
Even greater advantages arise when recognition happens weekly. Employees who receive weekly recognition are three times more likely to report feeling engaged, productive, and committed to their roles compared to those who are never recognized.
Retain employees with recognition
Employees who feel appreciated are more likely to stick with an organization, in good times and bad.
When it comes to developing an employee retention strategy, the data shows that recognition helps guard against turnover, as highlighted in AWI’s 2022 State of Recognition Report. The study found that 57% of employees would be less inclined to engage with recruiters if they felt adequately recognized in their current roles.
Furthermore, our research also shows that integrating diversity and inclusion into recognition programs enhances employees’ feelings of engagement, creativity, productivity, and job satisfaction – strengthening their sense of belonging and connection to their team. In fact, 88% of respondents said that recognition increases both their commitment to staying with the company and their willingness to refer others.
The importance of employee recognition for job satisfaction
When your employees are satisfied, they’re happy with their job, and that high self-esteem affects every minute of their day. Unsurprisingly, employees who receive recognition are more satisfied, but even giving recognition boosts happiness, according to 91% of employees.
In turn, employees that feel appreciated mean happy customers. Meijer, a U.S. family-owned superstore chain, found that increasing the frequency of employee recognition from twice a month to twice a week led to a 5% increase in customer satisfaction. Meijer stores with higher recognition rates also reported higher customer satisfaction overall.
“If you aren’t proactively finding ways to frequently recognize your team, you won’t be in a position to improve your company’s customer focus. The employee experience ultimately drives the customer experience.” – Vanessa Brangwyn, Chief Customer Officer, Achievers
Recognition improves company culture
Another example highlights that incorporating recognition is a powerful way to shape and strengthen company culture. For instance, Meijer saw its internal networks flourish after launching its recognition program, and within three years, the company earned its “Great Places to Work” certification for the first time.
Recognition helps set the tone for the cultural values you want to cultivate, making it an essential tool for fostering stronger team connections. Peer-to-peer recognition plays a vital role in this process, as it encourages collaboration between teams while fostering an inclusive work environment where employees can feel comfortable being their authentic selves.
In fact, research from AWI shows that employees who receive recognition from their peers at least monthly, are twice as likely to feel a strong sense of belonging, a connection with their coworkers, and believe their organization fosters a culture of trust.
What are the key benefits of employee recognition?
A recognition-rich environment delivers a myriad of benefits that can greatly improve your workplace culture and overall performance. Here are some of the most impactful benefits of employee recognition:
- Increased productivity and performance: Employee recognition elevates morale and job satisfaction, which drives higher engagement and productivity. When employees feel acknowledged, they’re more motivated to go above and beyond, leading to better performance.
- Increased loyalty: A well-structured recognition program also helps reduce turnover, as employees who feel valued are more inclined to remain with the company. This not only cuts down on recruitment expenses but also helps retain essential institutional knowledge.
- Improving company culture: Additionally, recognition contributes to a positive company culture, sparking innovation, extra effort, and increased job satisfaction.
- Lastly, by celebrating employee contributions, you strengthen your employer brand, making it easier to attract top talent.
How to start creating a culture of employee recognition
Research shows that more than half of employees cite “lack of recognition” as the key reason for leaving their jobs. To make sure your employees don’t fall into that camp, follow these best practices, and you’ll be well on your way.
1. Practice both social and monetary recognition
Any recognition program should include both social and monetary components — the latter in the form of a points-based reward system. This lets employees earn points and redeem them for rewards they actually want. Social recognition can be even more impactful than rewards, so prioritizing each is the best approach.
2. Include everyone in your recognition program
The more team members who actively show recognition, the greater the impact. Encourage participation in your recognition program on every level: peer-to-peer, manager-to-staff, staff-to-leader, and beyond. This is easier when leaders frequently show appreciation and encourage others to do the same.
3. Publicize recognition
Giving employees the option of making recognition public is an excellent way to amplify its effect. This can take the form of a company newsfeed or a newsletter. With the right recognition platform, you can also give your employees the spotlight recognitions they find especially meaningful by liking them, commenting, or “boosting” them through awarding additional reward points.
4. Encourage frequent recognition
As noted above, the more frequently employees receive recognition, the greater the effect. When organizations show appreciation to employees frequently, they’re 41% more likely to see increased retention and 34% more likely to see increased engagement.
5. Keep recognition specific
You know that employees are more likely to repeat behaviors they’re recognized for, but how can you clearly link each recognition to specific employee actions? Simple: recognize behavior in the moment. Real-time recognition makes it far easier to establish a direct link to the actions you appreciate and want to see more of. Employees notice when appreciation is personal and specific, and they find it all the more meaningful because of that.
“Our research indicates that the top important factor [of effective recognition] is correct alignment to company values. So we want to ensure that an organization is recognizing those behaviors that they want to see demonstrated more frequently by their people.” – Matt Seadon, GM APAC, Achievers
6. Leverage recognition tools
Reward and recognition (R&R) programs are a must if you want to build a truly exceptional culture of recognition. R&R users are 72% more likely to rate their culture of recognition highly and 23% more likely to rate their employer brand highly. Their organizations are 160% more likely to recognize employees more than twice a year as well.
All the practices above are within easy reach using an employee recognition app or a reward and recognition platform. A R&R solution lets everyone participate in your recognition program from anywhere with an Internet connection, using the device of their choice.
Start reaping the benefits of employee recognition today
Achievers Recognize is a powerful, award-winning R&R platform that makes recognition fun and easy. Major companies like GM, Discover, and McDonald’s are already using Achievers Recognize to create winning recognition programs, and Achievers was recently recognized as a top R&R provider by the Brandon Hall Group Excellence in Technology Awards.
The results customers have seen with Achievers Recognize are undeniable:
- 9 out of 10 employees at GM actively use the program every month.
- CHRISTUS Health achieved a 250% ROI from their Achievers program.
- Meijer experienced a 5% increase in customer satisfaction at stores where employee recognition rates were higher.
Ready to check it out? Try a free demo today.
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