When done right, a recognition program can unite a workforce around the behaviors and values that drive business forward through positive reinforcement. Talent leaders can make values more than a plaque on the wall by relating them to employees’ day-to-day work through recognition.
During the past decade, tactical approaches to recognition have been transformed into strategic initiatives by tying in elements of performance management and better aligning employees to a company’s core values and corporate goals.
According to a 2012 SHRM/Globoforce survey, 58 percent of HR leaders observed a return on profit margin as a result of their recognition program. This research preceded a separate study from Bersin and Associates, which found that companies that excel at employee recognition are 12 times more likely on average to generate strong business results than their peers.
Here are the top five ways recognition can drive bottom line results:
Engage employees. Employee engagement is frequently cited as one of the top HR challenges by many studies. The 2012 SHRM/Globoforce Employee Recognition Survey found that 37 percent of companies with strategic recognition programs report high percentages (71 percent or better) of workers with high engagement levels compared to only 25 percent of companies without strategic recognition.
Strategic employee recognition provides a foundation for the measurement and analysis of culture, a traditionally difficult-to-quantify commodity of an employer. Start using it to bring about a cultural change that engages employees, reinforces company values and helps meet business goals.
Increase employee retention. Survey results from the Spring 2012 Globoforce Workforce Mood Tracker show that 55 percent of employees would leave their current job for a company that clearly recognized employees for their efforts and contributions.
While salary and benefits fulfill baseline needs, other factors — such as challenging work, trust in leaders and being acknowledged for dedication — fuels a higher level of intrinsic motivation. Identify for employees what is important, and then show appreciation for their contributions to drive their loyalty to the organization.
Identify top performers. Recognition helps companies identify their leaders and top performers — the people who drive their business and are already assuming leadership roles within the organization.
Through social recognition, the accomplishment of every employee is noted, but the top performers will receive more praise and recognition. Talent leaders can use this recognition data to better understand every employee’s impact on the organization and to foster growth and engagement with those employees who are central to the company’s long-term success.
Fuel performance reviews. Recognition data allows HR and managers to leverage the wisdom of the crowds to capture year-round performance data. Of companies with strategic employee recognition, 62 percent reported that performance reviews at their organization were an accurate appraisal, compared to 50 percent for companies without strategic recognition.
Crowdsourced feedback provides multi-dimensional measurement, pointing to strong performance as well as gaps in performance when recognition is lacking. Utilize the real-time information populated by peer-to-peer recognition from across the company to get a more rounded view into how talent is performing.
Manage culture. According to the SHRM/Globoforce survey, managing culture is one of the three most important HR challenges. Ongoing recognition that is aligned to core values is one of the biggest proponents of culture.
Derek Irvine is vice president, client strategy and consulting at Globoforce, an employee recognition and engagement company. He can be reached at email@example.com.