New Gallup Research on How to Design Recognition Programs That Drive Business Impact
Many HR leaders inherently know that employee appreciation and recognition is good for business. Happy employees equal happy customers, right? But when it comes down to proving the return on investment in hard numbers, that can feel a bit more elusive.
Here’s the good news: Workhuman recently partnered with Gallup on new research to help solve this very challenge. Gallup is a global analytics and advice firm that helps leaders and organizations solve their most pressing problems. The trust Gallup has built globally is truly unmatched, especially in the employee engagement space.
As part of this research, Gallup surveyed more than 7,000 full-time and part-time workers in the U.S. and more than 5,000 workers in Western Europe about their recognition experience in their professional lives. Here, recognition is defined as “the act of praising, acknowledging, or expressing gratitude to employees for who they are and what they do. It involves taking time to thank employees, give them credit for good ideas, and acknowledging their accomplishments.”
So, what did we learn? First, most companies are not providing a stand-out recognition experience for employees.
- Only about one-quarter (23%) of employees strongly agree their organization has a system in place to recognize professional milestones such as promotions and work anniversaries.
- Only 15% of employees strongly agree their organization recognizes people for life events such as birthdays, wedding, and other personal events.
When you consider these numbers in the context of the outsized impact a well-designed recognition program has on engagement, retention, belonging, and well-being, it’s clear companies have an opportunity to approach recognition more strategically. In fact, 81% of managers and leaders say recognition is not a major strategic priority at their organization.
Here’s where finance folks – and anyone looking to show the ROI of recognition – will sit up and take notice. This research found an organization of 10,000 people can save more than $16M annually in employee turnover costs when they make recognition an important part of their culture. That’s in addition to cost-savings from employee engagement and productivity.
A good recognition experience makes people less likely to leave your organization and more loyal. Seventy-seven percent of employees who feel they receive the right amount of recognition at work strongly agree they feel loyal to their organization – 3x more than those that do not receive the right recognition at work. More than 40% of employees view the right amount of recognition as a few times a week or more, and increasing the frequency to this level has noticeable benefits.
This research also shows links between recognition and employee well-being. Twenty-five percent of employees report being burned out at work “very often” or “always,” which means one-quarter of the workforce’s energy, motivation, and productivity is dwindling. How can organizations combat this trend? Cater to the whole human. Just intentionally celebrating employees’ life events more than triples employees’ perceptions that their organization cares. Further, more than 70% of employees who have good recognition experiences at work rate their lives more positively overall and are more likely to be thriving in their everyday lives compared to those who are not being fully recognized.
Based on this research, how can you design a recognition program that’s better for employees and better for your business? Start with these five pillars of recognition:
- Fulfilling: Most employees want to be recognized at least a few times a month, but this should be regarded at the base minimum. Employees who feel fulfilled by the recognition they receive are 4x as likely to be engaged.
- Embedded in culture: Recognition can be a practice, or it can be the way of life at an organization. Having formal programs, as well as monetary incentives tied to recognition, can help to reinforce the culture.
- Authentic: If recognition comes up hollow, it won’t have the desired impact and can even undermine the experience. Only about one-third of employees strongly agree the recognition they receive at work is authentic, indicating there is considerable opportunity for employers to make recognition more meaningful.
- Equitable: Only 19% of Black employees and 21% of Hispanic employees strongly agree they receive a similar amount of recognition as other team members with similar performance levels; whereas 28% of white employees do. Recognition is an important exemplification of inclusivity at an organization.
- Personalized: Only 20% of employees strongly agree they have been asked by someone at their current workplace how they like to be recognized.
The report is full of data and insights for anyone looking to build a solid business case for recognition – or to see how your current program stacks up. Are there opportunities to enhance the recognition experience for employees?
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