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Unleashing the Power of Positive Employee Recognition

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Ask most global CEOs about employee engagement and strategic recognition programs, and you'll probably hear that they are no longer ''nice-to-haves''...they are a must.

With so many other financial, legal, operational, and competitive pressures to worry about, why are strategic recognition programs gaining so much "executive weight"? Well, one need only to refer to the data:
  • In a recent study, the Institute for Survey Research (ISR) found a 52% gap in operating incomes between companies with highly engaged employees and companies with poorly engaged employees.

  • High-engagement companies improved 19.2% in operating income over the study period, while low-engagement companies declined 32.7%.



  • A study by the Corporate Leadership Council found that increased engagement can lead to a 57% improvement in discretionary effort. Increased discretionary effort improves performance by 20% and reduces attrition by 87%; therefore, highly engaged organizations grow profits three times faster than their competitors.
Providing recognition is not just a nice thing to do; it forms a critical element in creating a high retention and high performance workplace. Recognition reinforces the most important results people create for businesses—in a clear and consistent manner.

Executives are starting to recognize the benefits of recognition as a key driver in employee engagement. Creating an environment that encourages employee engagement is essential in the effective management of human capital. Intuitively, all executives can recognize the difference between a "willing" employee and a truly "engaged" one. "Willing" employees get the job done as required, doing what's essential, but often nothing more. "Engaged" employees will seek to break the mold to improve efficiency, effectiveness, and results, looking for opportunities to go above and beyond, being creative, and surpassing personal and team goals.

Not only can recognition improve employee morale and retention, but there is also a direct correlation between the level of workforce engagement and a company's bottom line. For example, in 2002 Reuters suffered its first ever full-year loss. After launching its FAST Forward campaign that included a recognition program, Reuters' share price quadrupled and revenues showed an upward trend. With stakes this high, how can executives not recognize the power of recognition programs to engage their workforce?

What sort of return-on-investment (ROI) boost could an employee recognition program bring to an organization with, say, a 5%, 10%, or 20% boost in employee engagement levels? According to a Gallup survey of millions of employees worldwide, organizations with higher than average levels of engagement also enjoyed 27% higher profits, 50% higher sales, and 50% higher customer loyalty levels. Now that's worth stopping to think about for any organization.

Improving an employee engagement "score" takes plenty of effort and doesn't happen overnight. However, a solid recognition strategy can help drive engagement initiatives. Some companies are turning to on-demand recognition solutions to provide fair and consistent recognition. These solutions allow recognition to be meaningful by allowing employees to choose the rewards that fit their diverse lifestyles and tastes. Some even allow the corporation to manage the recognition program centrally, while allowing awards to be redeemed locally—addressing the language and currency issues global corporations face.

By boosting the sense of appreciation and value an organization has for its employees, a well-executed recognition program can also assist in communicating about and building a passion for an organization's mission and behavioral values.

Furthermore, engaged employees are less likely to experience job burnout—an increasingly common phenomenon in today's stressful workplace. Whether employees feel their jobs are drudgery, draining, or stressful, it can leave many with little desire to return to work the next day. This is especially true in high stress environments such as IT help desks, where employees are hounded with IT problems on a daily basis. None of which is to mention high profile companies in which experiencing low morale could cripple the organization.

Recognition that helps both the executive and the employee get what they need is a win-win situation. Executives should make this the year they implement a strategic recognition program that will "wow" their staff and "wow" the company with its positive outcomes.

About the Author

Eric Mosley is chief executive officer and co-founder of Globoforce, a provider of global, strategic recognition solutions that help businesses engage and motivate employees by promptly recognizing achievements through an easy-to-use Web-based software solution. Armed with his extensive internet and technology experience, Mosley was instrumental in combining best practices in recognition management with the latest technology. Mosley has helped open new frontiers in recognition, bringing a new global perspective. Over the past 10 years, he has played an integral role in structuring recognition programs for such global clients as P&G, Reuters, Dow Chemical, Intuit, Avnet, and others. Mosley received a Bachelor's degree in Electronics, Computers and Telecommunications Engineering from the University of Dublin, Trinity College.


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