Aside from the Thanksgiving meal, football games and holiday shopping, this is the time of year when we are thankful. We pause to remember that it is really the people in our lives who make living so precious, and we ought to show our appreciation.
While this is certainly important in our personal lives, it should not be ignored in the workplace. As I’ve written about previously, thanking employees is one of the easiest, cheapest and most beneficial ways to raise engagement. Yet it isn’t done nearly enough.
Employees are still leaving jobs as often for not being appreciated as they do for higher compensation.
And though many managers may believe their employees should be happy with a paycheck, those companies using social recognition programs are making measurable impact on employee engagement and retention. And social recognition is really more about the praise than it is the prize.
That’s because recognition is more than incentives. While incentives focus on the expected reward for achieving desired results, recognition is more about the surprising reward due to the outstanding effort to achieve results. Incentives are typically an extrinsic reward while recognition is more often an intrinsic reward.
Employees can spot empty gestures and these may even be counterproductive. However, when social recognition includes genuine gestures that take into account employees’ specific needs and perspectives, those employees will thrive providing bottom line results.
“Recognition can and should be planned and executed in a company like any other management practice with the potential to drive bottom-line results, and therein lies the opportunity for competitive advantage,” write Eric Mosley and Derek Irvine in their book The Power of Thanks. “When you elevate recognition to the level of other strategic practices, you create a fresh competitive advantage, one that is uniquely tailored to your company’s culture, goals, and strategy.”
Social recognition earns the support of executives because it engages them where they live: the realms of competitive advantage, high performance and profits.
According to a 2007-2008 Global Workforce Study, Towers Watson found that a 15 percent improvement in employee engagement correlates with a 2 percent improvement in operating margin. Further, Aon Hewitt’s 2013showed that for every percentage point increase in employee engagement drives a 0.6 percent growth in sales.
These are tangible bottom-line results from the intangible benefits of social recognition programs. But that doesn’t mean it comes without a financial investment. According to studies such as WorldatWork’s Trends in Employee Recognition, the budget for social recognition programs is typically between 1 and 2 percent of payroll.
Therefore, adequately funding such a program may require companies to reallocate dollars from merit increases, annual bonus pool, or even those individual department dinners and ad hoc events. But pooling this money to fully fund a well-planned and well-executed recognition program will pay bigger dividends beyond the usual high achieving individuals.
In their book, authors Mosley and Irvine provide a blueprint for initiating a successful social recognition program that include the following essential elements:
Sponsorship – All top executives must commit to the social recognition implementation because it elevates the program to a strategic status. This means it gets the constant attention and support in messaging, applying resources, and keeping it at the forefront of all company initiatives.
Design – Like every strategic initiative, the design of social recognition programs must include clear goals and objectives, metrics for measuring effectiveness, and stakeholder feedback. You must keep everyone informed as you rollout and adapt the program as needed.
Reach – Social recognition programs need to be integrated with other HR and company goals, involve as many people as possible, and ensure you calibrate awards to match achievement. Don’t limit your recognition to the same 10% who are over achievers already; instead, find ways to raise the engagement of the middle 70% of your employees with more frequent and meaningful rewards.
Adoption – The effectiveness of any strategic initiative requires quick and mass adoption throughout the organization. To do this means ensuring you educate, engage and excite when launching your social recognition program. Give it the care and attention it deserves to launch and stay relevant.
Rewards – Make the rewards as unique as the people they represent. While cash is always nice, consider gift cards because they are more likely to be remembered and used for something other than paying bills. And provide your people with a choice to make rewards most effective to each individual.
Thanksgiving is the time of year when we should be thankful. This year, remember to give thanks to your employees through a well designed, fully implemented and on-going social recognition program. It’s good for engagement, retention and the bottom-line. It will also make them feel appreciated.