In today’s world, ample competitors are present and there is a cut-throat competition out there in the market. This has urged organizations to find both creative and cost-effective ways to recognize and reward top performers as well as motivate the existing employees so as to enhance their performance and increase their business value. The modern days have left the traditional methods of offering compensation and benefits to your staff way behind. The 21st century has led organizations to make the best out of modern methods of rewarding their staff. Modern methods of recognition refer to improvements in work-life balance, incentives for pre-determined job performances are a few to name.
Victor Lipman a Contributor at Forbes.com in one of his article states that 54% of senior managers believed that it’s common for staff to quit their job due to lack of appreciation and recognition. While 66% of the employees would quit their job if they did not feel appreciated and that the percentage pumps up to 76% in the case of millennials which is equivalent to almost three-quarter of your workforce.
Now that’s a glitch, isn’t it? Google is the best example. They use an employee reward and recognition program to retain their top talents. What makes Google a great company to work with? According to PayScale 86% of employees at Google are satisfied with their job. Google identified this glitch, analyzed it and ensured that they rolled out an effective reward and recognition program to make sure that their employees wanted to work with them and not just keep working but also provide productive results that have helped Google to achieve its business goals so far.
Employee recognition as a Practice:
Worldatwork defines recognition as practices that give special attention to employees in terms of their action, behavior and/or performance on the whole. According to Abraham Maslow, one of the famous psychologists in his theory of human motivations states that recognition is considered to be one of the five fundamental human needs just after the basic needs like food, safety, and belonging.
What does this theory mean for Organizations?
This theory proves that recognition works as the best tool for motivating employees. According to Maslow esteem, appreciation, respect, and praise are some of the fundamental motivational factors. This means that having a reward and recognition program is very important. If the esteem need is not fulfilled then the growth becomes stagnant. Reward and recognition programs are smart approach by organizations to retain their top grade players.
As an employee when we are rewarded and recognized for our efforts are self-esteem needs are met and it makes us feel that we have met our full potential. According to Maslow’s theory recognition fulfills two human needs one is esteem and the other is self-actualization. Consequently, an organization with an effective recognition program will be more capable enough to retain talents before they go and work for your competitors.
If you have been running reward and recognition programs in your organization I am sure business owners would be interested to know the ROI on such programs. Putting it the other way round business owners would like their HR’s to prove the effectiveness of the reward and recognition program is contributing to the bottom line.
Advancements in technology has helped us to gather data which can provide us return on investment metrics for rewarding, recognizing and incenting employees. Today organizations face a lot of challenges like shortage of best talents, changing workforce are a few to name, hence it’s imperative for organizations to get on their toes and strategize a plan to immediately enhance their reward and recognition program in order to amplify the performance of their staff, attract top talents in the market as well as retain top players who work for them. Organizations that are ardent to enhance their reward and recognition program must measure their outcome and integrate the data into wider business strategies. Here are five practices through which this can be executed.
- Track Your Reward and Recognition Program Metrics:
Begin with tracking your reward and recognition program metrics. Initially, you may face challenges such as which performance indicators should be considered and monitored. David Sturt an EVP at O.C. Tanner proposes a plan of three tiers that includes program metrics, culture metrics, and business metrics to measure ROI on reward and recognition program. Now, what do each of these do? Well, Program metrics addresses basic information such as usage, adoption, frequency, reach of the reward and recognition program which can help HR analyze what is happening with the reward and recognition program across the firm.Culture metrics reports the satisfaction and engagement of the employees and Business metrics uncovers the program results on key business indicators as in profits and productivity.The data at program grade is genuine, simple and easy to understand. It also provides valuable information which is required to propel recognition program implementation and usage amongst the employees as well as their team leads.
- Assimilate Culture and Business Metrics that have been Tracked in Other Zones of the Business:
Once the recognition program is implemented it is about to grow, hence HR professionals must start to integrate more data points that gauge a company’s culture as well as business performance into their analytics. Strut suggests that companies use metrics that are and have been traced by HR professionals such as employee engagement, employee retention, customer satisfaction, productivity etc. He further adds on that by using these metrics the organization can go way far they wish in order to prove the impact, worth, value and influence of the recognition program on their organization.
- Align the Your Recognition Program with Business Goals:
Once you have the program, culture and business performance data then HR professionals of the organization can ascertain the ways that individual behaviors affect business result by starting the task of running correlations. Such information helps organizations to leverage their reward and recognition program as a tool to enhance the performance and meet the desired goals of the organization. According to Costello By aligning recognition program with the company’s goals one gets a better understanding of the behavior that should be rewarded and recognized. Companies can utilize reward and recognition strategies to shape their workforce culture and thereby fortify positive behavior.
- Make Sure that Reward and Recognition Platforms are Accessible:
In order to avail ample of data that would let you know about the return on investment on recognition program companies need to make sure that the reward and recognition program that they implement in their firm is easy to use and frequently used. The recognition program should be open to all the employees including managers across the firm. Technological advancements have made recognition platforms easily accessible through actual time dashboards, on-demand reporting, contextual analytics etc. Such tools have helped the managers a lot as in they keep the managers aligned and in constant touch with the performance of their teams. An easy access to recognition platform enables managers to develop appropriate strategies that not only enhance the staff’s performance but also the business performance too. A right recognition program offers a platform that shares, celebrates and instills the intranet with amazing success stories. It displays a record of an employee’s greatest achievements till date
We at Xoxoday offer employee reward and recognition platform. It gives your company a branded online presence and surrounding wherein you can celebrate value-based employee achievements.
As a partner in employee success, we make sure that our team is always there to assist you at every step you take to roll out the reward and recognition program. Whether you are a start-up of 100 employees or an established business of 1000+ employees we have the elements to make your employee reward and recognition program a great success.
- Continue to Re-evaluate the Data:
Today organizations are constantly juggling between reorganization, restructuring, growth and frequently changing workforce. This calls for the need to constantly re-evaluate between the firms' recognition program and the desired business results on regular basis.When quarterly reviews are performed, organizations can challenge the existing hypothesis about which strategy works best, when and where this is a need to formulate new hypothesis as well as make suggestion to constantly enhance their reward and recognition program.
What is ROI of Employee Recognition?
In today’s ever-changing economy implementation of an employee recognition program is a must. But what about the ROI on this program? Is it measurable? You spend an x amount on every employee year after year to make sure that their work is recognized. Don’t you think it’s necessary to know the quantifiable results backed by reliable metrics to justify the continuation of such practices?
Following are the ways how the ROI on employee recognition program can be evaluated:
Incorporating employee recognition program in your organization should focus on the following performance indicators that can be measured.
Reduced Employee Turnover:
According to Employee Recognition Survey by SHRM enterprises with the strategized employee recognition program have 23.4% less turnover than organizations without a recognition program. This itself is an indicator that indicates how recognition programs impact your ROI.
Your company has gone through a huge expense of hiring and training the employees. It comes as a massive blow when these top talents decide to leave your company. An email that mentions the achievements of your employees is one of the best ways that still works well. It boosts employee morale and infuses the trust factor in your employee towards you.
A reduced turnover means saving cost on recruitment, training and having more productive employees. This has a direct positive impact on your ROI. An evaluation of the turnover rate before and after the implementation of the recognition program will give you gaugeable outcomes.
When does an employee remain engaged with an organization? Well, when he is aligned with the company’s goals and is loyal towards the success of the company. An employee who is engaged performs at their best level with passion in what they do which lead to innovative practices.
According to Gallup highly engaged employees out-perform disengaged employees by 21%. Businesses, where employees are highly engaged, acquire a 10% increase in their customer ratings and 20% increase in their sales.
Better Business Results:
Your product or services that you offer becomes the main focal point of your business. For this purpose, various departments within your organization strive hard to enhance your product and services in order to increase sales and bring about brand awareness of your business presence in the markets.
Employee engagement leads to building a connection between the employee and the organization. When their efforts are recognized they put in more efforts to deliver the best to the clients which lead to an increase in customer satisfaction. They are motivated to remain loyal to contributing effectively to attain the desired business goals. This brings about and increases in sales and strengthens the bottom line too.
With the best recognition practices, your business can grow tremendously, make great profits by selling your services and products and develops a huge customer base too which is the main goal of any business. Isn’t it?
Innovation and Productivity:
In this challenging economy, in order to stay updated with the market and stand apart from the crowd, you need to be innovative and enhance and try out new strategies.
A research by O.C. Tanner found that employees who receive strong recognition are 33% likely to be proactively creative and that they generate twice as many creative ideas per month than those employees who are not recognized. From companies point of view, the employee who is effectively recognized for their performance is more than twice as likely to be more creative.
The research states that when employees were asked for which benefits would encourage creativity and efficiency in their work the following was the answers:
- 27% of employees stated that they want to be recognized for their ongoing continuous efforts
- 41% needed recognition for going above and beyond their usual work
- 32% of employees stated that a bonus of about say 5% would also make them feel recognized and rewarded for their hard efforts at work.
All of this shows that having performing employees recognized on regular basis leads to an increase in innovation and productivity.
If your firm has creative minds coming up with mindboggling innovative ideas then a reason behind it could be that your employee recognition practices are carried out just the way they need to be carried out and that the ROI is sturdy.
What does your brand represent? Well, it represents people’s perception about an organization, the customer services that they provide the brand reputation and the employees. Employees who are happy and highly engaged will portray a positive image of an organization. It doesn’t end here they also concentrate and ponder on how to get high brand value.
For any organizations first come the employees and then the customers. Hence every firm should think about how to increase their brand value from inside first i.e. their employees first and then go ahead and think for their customers. A performance-based employee reward and recognition program positively infuses a sense of belongingness in the employees towards the organization.
Brand value can be enforced byways like merchandise that bears the company logo or certificate of appreciation are a few to name that show recognition for employees efforts and work and make them feel connected and belonged to the organization.
ROI for investment in employee rewards and recognition platform can be gauged in terms of reduced turn over, reduced absenteeism, enhanced employee morale, engaged employees and the brand worth of an organization.
Few Principles to Bear in Mind are:
- Craft and create a recognition strategy that rewards the activities that have a direct link to specific business goals/ objectives or the desired organization’s cultural values.
- In order to develop the culture of recognition within your organization, you must make use of both formal and informal recognition.
- Make sure that your HR teams look for a variety of options when it comes to reward and recognition platform. They should bear in mind that what is reward for one may not necessarily be the same reward for another employee.
- Keep a track on increased quality in performance rather than tracking the quantity of efforts.
- In order to keep your workforce highly motivated make sure you conduct reward and recognition programs on regular basis.
- Measure the ROI for investment in employee reward and recognition program by measuring the expenses of the reward and recognition program and the benefits obtained from it.
Offering employee reward and recognition program can help today’s business owners to craft a series of success stories to your business. Recognizing and rewarding top performers in your firm infuses a positive environment and culture which is the answer to business success.
Measuring the effectiveness of reward and recognition program shouldn’t be a complex one. With basic performance metrics, companies can begin to strategize a plan of action for rewarding and recognizing their employees’ efforts that is comprehensible with the overall business plans. And has a positive impact on the bottom line of the organizations.
This is why it’s imperative to have a reward and recognition program that reverberates with your workforce. When you identify the right platforms to appreciate your employees’ performance in ways and means that matter a lot to them only then you will be able to acquire the constant ROI on your investment.