5 Best Practices in Employee Recognition

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Employee Appreciation & Productive Recognition

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What Is Employee Appreciation

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Timely, formal or informal, expressed and appreciative acknowledgment of a person’s or team’s efforts above and beyond the call of duty or reasonable expectations in the course of their professional endeavors, or behaviors and results which uphold the company’s goals and values.

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Does Employee Appreciation Even Matter?

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“The number-one reason most Americans leave their jobs is that they don’t feel appreciated.” - Gallup, Tom Rath and Donald Clifton “How Full Is Your Bucket? Positive Strategies for Work and Life”.

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Companies with strategic recognition programs report 71% and higher engagement levels among workers, as compared to companies without the same – 2012 SHRM/Globoforce Employee Recognition Survey.

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Disengaged workers cost the economy $300B+ every year – Gallup, 2010.

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Benefits Of Employee Appreciation

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60% of Best-in-Class organizations stated that employee recognition is extremely valuable in driving individual performance – Aberdeen Group, “The Power of Employee Recognition”, 2013.

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70% of North American workers hold timely recognition to be “effective” or “very effective” - surveyed by staffing firm OfficeTeam.

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Motivated workers invest more effort and enthusiasm in their work, since they feel they have a purpose – an important part to play in the company’s goals.

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Improved Work Culture

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Companies spending 1% or more of payroll on recognition, 85% see a positive impact on engagement – SHRM/Globoforce Employee Recognition Survey, 2012.

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Employee appreciation creates an environment where employees want to work and to continue making a difference on the company and on their colleagues.

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Lesser Turnover

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Organizations scoring in top 20% for building appreciation-rich cultures have 31% lower voluntary turnover than every other enterprise – Bersin & Associates “The State of Employee Recognition in 2012”.

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Higher turnovers affect morale and cost companies millions of dollars from employee investments, but well-appreciated employees stay longer in the organization.

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Better Teamwork and Cohesiveness

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“We are at our best when each other is at their best.” - Mark Welch, Northern Trust’s Chief Talent Officer.

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Peers are the #1 influence on their colleagues, not monetary compensation or bonuses, and the reason behind 20% of all employees going the extra mile – 2014 TINYpulse Employee Engagement and Organizational Culture Report.

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When offered the opportunity, 44% of all employees will organically give each other recognition on a consistent basis – 2014 TINYpulse Employee Engagement and Organizational Culture Report.

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Teamwork improves significantly with appreciation programs, because employees understand their efforts are recognized not only by supervisors but by colleagues and peers as well.

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Directly Improves Customer Satisfaction

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“We’ve seen retail clients increase customer satisfaction rates by 112% in retail stores that implemented recognition programs versus stores that did not...” Rob Catalano, Vice President of Global Expansion and Engagement – Achievers.

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41% of customer are loyal because of good employee attitude – MCA Brand Ambassador Benchmark

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5% increase in customer retention generates a 25% to 85% increase in profitability – Harvard Business Review

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Employee Recognition Best Practices

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Example: Instead of “Employee of the Month”, create a culture of “doing the right thing” by recognizing outstanding customer service when a problem arises.

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David Brown, founder and president of Datotel, replaced gift cards and “employee of the month” programs with handwritten notes and direct praise for commendable behavior and results, creating better morale and engagement.

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Random appreciation has less impact, and so recognition programs should align with company goals and values in order to reinforce behavior towards practices which really matter the most.

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Focus On Peer to Peer recognition

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Employees often view recognition from bosses as “political”, but consider peer to peer appreciation as genuine since colleagues are better acquainted with personal efforts and contributions than supervisors.

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Peer-to-peer is 35.7% more likely to have a positive impact on financial results than manager-only recognition – SHRM/Globoforce Employee Recognition Survey, 2012.

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Public Praise Trumps Monetary Appreciation Programs

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40% of surveyed employees felt that increased salaries and financial rewards were ineffective in reducing turnover – Kepner-Tregoe Survey.

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#1 motivator (37%) voiced by employees in a recent Forbes survey - “Recognize Me”.

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When asked what leaders could do more of to improve engagement, 58% of respondents replied “Give recognition” - Psychometrics, A Study of Employee Engagement in the Canadian Workplace 2010.

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“Story Telling” is one of the most powerful practices in employee recognition, carried out by publicly praising specific exemplary performances, sharing appreciation on social media, or mentioning the efforts on a company blog or newsletter.

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Keep your recognition programs simple yet frequent

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70% of employees are recognized annually or not at all - Bersin & Associates “The State of Employee Recognition in 2012”.

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Employees not adequately recognized at work are three times more likely to leave in the following year – Gallup

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Inculcate a simple culture of top-down as well as peer-to-peer complimentary appreciation, since frequent recognition motivates employees to give their best every day.

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Need for strategic recognition programs

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Having a recognition program is insufficient on its own, if not combined with strategic approach and tactical understanding of appreciation methods which would fulfill the needs of the employees.

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Only 58% of employees think that their organizations have recognition programs, despite 75% of organizations having them in some form or the other – Bersin & Associates “The State of Employee Recognition in 2012”.

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Northern Trust An exemplary case study

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Hailed as one of the most admired companies in the world by the Fortune magazine for 8 consecutive years, and recognized by Financial Times Group as the best private bank in US for the 6th time in 2014.

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They’ve pioneered employee appreciation programs over the past decade resulting in 96% employee appreciation reports, and 87% reports of recognition programs having improved work culture.

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85% of employees satisfied with recognition experience.

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85% of employees satisfied with recognition experience.

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