When people are financially invested, they want a return. When people are emotionally invested, they want to contribute.
If employee engagement is a boat, then rewards and recognition is the well-oiled engine required to steer it to its destination.
It isn’t rocket science. It’s Management 101. Treat your employees well, and they’ll return the favor by being more productive.
According to a survey, almost 78 percent of employees would work harder if they were better recognized.
It’s a war over talents out there. To attract the top performers, it’s almost an essential need to have a rewards and recognition program in place.
Yet, it is always good to understand the ROI behind something before actually investing in it. Companies seek to justify and implement rewards and recognition; they must connect that investment to noticeable business benefits.
Here is how a reward and recognition program will work to reflect the desired results in your organization.
1. Increased Employee Engagement
Great companies know that the more the amount of gratitude in it, the greater the level of employee engagement.
An astounding 84 percent of HR leaders in organizations with a current employee recognition program reported that it helps with employee engagement.
Additionally, a recent study by Lighthouse Research revealed that:
High-performing companies (i.e., those with higher profits, employee retention, and engagement scores) were 14 percent more likely to focus on employee strengths. 37% were more likely to use recognition as a tool to encourage and reward outstanding performance.
Employee rewards and recognition programs can be a crucial component for creating a motivating workplace culture. Employees thrive on positive reinforcement, and such programs put an additional spotlight on the effort people put into their jobs.
2. Reduced Turnover Rates
Now, more than ever, employees are likely to stay at a company where great work is frequently appreciated.
A combined report from Globoforce and SHRM revealed that 68% of employers who run a value-based employee recognition program saw an improvement in employee retention.
In yet another study, organizations with recognition programs have reported an almost 31% lower voluntary turnover rate.
Employee turnover is an expensive setback that organizations face after spending close to hundreds of dollars in recruiting and training. Moreover, a higher turnover rate results in decreased morale, insecurity as well as reduced productivity.
A rewards and recognition program is a well-founded solution to battle the dwindling motivation and ultimately increase the level of employee retention in your organization.
The ROI of employee turnover is pretty quickly seen when you compare the number of employees leaving before and after implementing an R&R program.
3. Better Business Results
It’s vital to treat employee recognition as not just a program but a management practice that has a very real business impact. Social recognition has a proven ROI, and it only takes an investment of 1% of payroll to see the results.
According to an SHRM study, a majority of human resource professionals state that their employee recognition program positively impacts:
- organizational culture (85%)
- employee engagement (84%)
- employee experience (89%)
- employee relationships (86%)
- organizational values (83%)
The same study states that a recognition and rewards program is more than 2X likely to drive better business goals.
Frequently appreciated employees are keener on giving better performances. Additionally, they start taking a personal interest in the organizational goals and business success, as well.
When a business invests in its employees, it is, infact, investing in a better customer base. Well-appreciated employees not only work harder but also turn into your company’s very own personal advocates.
The foremost business goal of any company is to increase profits. Profits come in when you have a dedicated customer base. Many studies have demonstrated that treating your employees well is necessary to provide a better customer experience.
See the connection here?
The positive ROI of rewards and recognition is undeniable on whether it can contribute to real business success.
4. Innovation and Productivity
With a base salary, employees will just work at a level that’s expected from the job.
Suppose companies want their employees to go above and beyond. In that case, employers may consider offering their employees the opportunity to earn additional perks and frequent recognition.
Companies have attributed employee recognition to improving sales, customer service, patient satisfaction, and even quality metrics.
Recognition is more effective than a salary bonus at encouraging people to be more innovative and productive.
According to an O.C Tanner study, employees who receive strong recognition are 33% more likely to be proactively innovating. All this while generating almost 2x as many ideas per month as those who aren’t recognized enough.
Additionally, according to Globoforce, 78 percent of employees would work harder if they were better recognized.
When employees receive necessary recognition, they are left with being more confident, self-assured, and better performing. On a fundamental level, appreciation makes a person go the extra mile for the organization they work for.
Modern employees just don’t need higher salaries to be more productive. The simpler alternative is providing meaningful recognition for a job well done, innovative company culture, and encouraging leaders.
5. Ultimate Brand Value
Almost 66 percent of companies with value-based recognition said it helped them build a stronger employer brand vs. only 28 percent of those with non-value-based recognition.
A brand’s worth is the perception of the company by the people about an organization.
The organizations where the employees come first are the ones that have an actual impact on the outside world.
It is easier for people outside your organization to see if employees are engaged or not. When employees are happy, motivated, and stress-free, it helps portray that the company culture is highly positive.
A strategically implemented rewards and recognition program can accelerate the business growth and help a company achieve its necessary goals, thus improving the brand value.
Wrapping It Up
The positive ROI of employee recognition and rewards is evident from the improved employee engagement levels, reduced turnover rates, increases productivity, and positively impact employee morale.
However, no workforce is created as equals. What worked for some other company might not work for you. The bottom line is that positive ROI can only be seen when choosing the right rewards and recognition platform.
Once you classify the perfect recognition and rewards platform, it becomes easier to make employee recognition a part of your ongoing company culture.