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4 Reasons Why Recognising Your Employees Is Important

Quote from Poet and author Ella Wheeler Wilcox

There are a whole series of interrelated benefits that can bring to an organisation through a well-structured, well-implemented Employee Recognition program.


  • Happier Workers

  • Higher employee engagement levels

  • Strengthening corporate culture and values

All of this leads to Improved profitability to the organisation.

1. Employees will want to stay

People that are happy at the place they work at will want to stay there. So when they feel appreciated, employees will go the extra mile. But there are more benefits from employee recognition, let's consider the costs of training a brand-new employee to the point where they can work as confidently and as efficiently as a company veteran. Welcoming a new employee in the fold could cost as much as $3,500 in recruiting and as much as $1,200 and 32 in ongoing training each year. All told, a new hire may cost $4,129 in lost or compromised productivity, for as many as 42 days. If it sounds like you don't need the headache, you're probably right.

2. Appreciative leaders are appreciated

The relationship between employees work in two ways. It is a lot easier for employees to respect their co-workers if these coworkers show mutual respect to them. A similar philosophy applies to the hierarchical relationships within companies. You may think that a proverbial leap of faith is what's needed to create trust — the base for a trusting relationship has to begin somewhere we're all familiar with. Put yourself on a limb, trust your workers and see if that trust is being rewarded. You don't just have to shoot, and forget. Often you just need to create a strong base for it to succeed. The cornerstone in our case today is appreciation.

Read more: 5 Reasons Why Employee Incentives Are Going Digital

3. Re-enforcement of Company Culture and Values

This is to ensure that behaviours that re-enforce one or more company values are recognised and socialised as part of the programme. What are the benefits of doing this? Well, most organisations have a unique culture that they wish to preserve as time passes and the organisation develops. A set of company values is one way in which the things that the company stands for can be committed to in writing and promoted internally. Consistency in good and bad times, is something for employees to hang on to. A framework in which to recognise employees who have performed exceptionally well, what ‘well’ means they can be supported by values to give context and examples of things that are considered highly desirable behaviour in a particular organisation. Some of these will, of course, vary from one organisation to the next, so it is essential to provide clarity to all employees. A Recognition Programme with a social media style wall will allow employees to share, like, and comment in addition to any interaction that takes place directly with management. Each social interaction can be linked to company value, thereby re-enforcing values with every nomination, recognition, like and comment.

4. Improved Profitability to the Organisation

A new study by the University of Warwick showed that happiness resulted in a productivity increase of 12 per cent, while unhappy workers were 10 per cent less productive. "We believe that human happiness has significant and beneficial causal effects on productivity as the research team put it. Positive feelings tend to invigorate people.' Tower Perrins-ISR carried out a global survey that included data gathered from opinion surveys of over 664,000 employees from over 50 companies around the world, representing a range of industries and sizes. The survey compared the financial performance of organisations with a highly-engaged workforce to their peers with a less-engaged workforce, over 12 months.

  • The global survey of 664,000 employees shows that higher engagement results in 19.2% growth in operating profit. Low levels show a 32.7% reduction.

  • Standard Chartered Bank was able to demonstrate in 2007 that branches with higher increases in engagement levels had a profit margin that was 16% higher.

  • Increasing revenue on Hewitt scale

  • Employers with an Engagement score of more than 60% enjoy a Total Shareholder return of 24%

  • Those with Engagement scores between 40%-60% have a Total Shareholder return of 9%

  • And those with a score below 40% have a Total Shareholder Return of -3.4%.

There is conclusive proof that higher levels of Employee Engagement lead to higher profitability. One of the most potent and most sustainable ways for an organisation to improve its Employee Engagement is to operate a great Employee Recognition programme. Nevertheless, the question still remains of how many resources to dedicate to such a cause. Meanwhile, there is a need for more research to determine which practices are most successful in generating those results. Although there is reason to believe that this is one of those rare instances when you can really make all happy.

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