Recognition: Rubbish or Retention Wonder?

Employees often leave a job not because they’re underpaid or overworked, but rather because they feel undervalued and unappreciated. Two of the most basic human desires are validation and appreciation.

By investing some time and energy in appreciating employees, it’s possible for companies to save money and retain their employees perhaps even  longer than companies that pay more but show less appreciation for the work being completed.

Managers need to openly and consistently recognize great work, a task that is not wholly accomplished by simply handing out monetary bonuses. Bonuses earned in the banking sector have always been easy to rationalize — “Money given in large quantities will ensure the best employees stay,” and so on — but there are other factors that are just as, if not more, important than money.

The actual cost in capital for raises and bonuses is not the only expenditure when considering these two differing management styles. An unhappy workforce is more disposed to arrive at work later than usual, leave earlier and even take advantage of office expenses for personal profit.

It’s no secret that nonprofits are strapped for cash, resources and time. So why do some of the most successful organizations invest a great deal of energy and resources into volunteer recognition? Because it is essential for volunteer retention. Studies have shown that if volunteers feel recognized and appreciated, they will happily continue to donate their time with no expectation of compensation.

In the absence of a salary, it is important to find other ways of motivating people, and a wide range of options have been used in volunteer recognition programs. Thank-you letters, visits by senior management, quirky gifts including personalized cookbooks, flowers and even potted thyme plants are all ideas for letting volunteers know they’re appreciated. These motivations can easily be handed out in a for-profit work environment as well.

Employee recognition methods should be tailored to the type of company and the personality of the employee. Some examples include:

  • A personalized thank you giving specifics on how the employee has helped the company.
  • Timely positive feedback for excellent work.
  • A random lunch or night out to celebrate a team win.
  • A relevant gift. Even something that can help them with their professional duties.
  • A formal thank-you letter.

Rewards are less effective if they’re given out of habit; they should represent an honest reaction to a great piece of work. Employee of the week or month schemes don’t work because employees see right through transparent efforts to improve morale. Regular lunches lose their value for the same reason.

Top performers should be personally rewarded as much as possible. It shows them that their boss cares and reinforces their efforts more than an impersonal reward can. Establishing an effective recognition program will mean that people get rewarded based on noteworthy performance, and poor or average performers step up their effort.

Not only do underappreciated employees often want more in terms of pay and benefits, they cost employers when they inevitably leave. Even a small investment of time and energy can help managers avoid churn-related losses.

David Hassell is CEO of 15Five. He can be reached at