Benefits of Employee Recognition in the Workplace: Reduced Risk & Raised Revenues

Feb. 1, 2011
Retaining engaged and talented employees is an important component in curbing risk.

When you have offices, departments and teams of loyal, committed, trained and qualified staff, you are reducing your risk. Give everyone an annual raise, make sure the air conditioning runs in the summer and the heat in the winter and voila… resignations will stop and retention is achieved. Right?

Wrong! Having an efficiently run work environment with comfortable temperatures and scheduled pay raises won't be enough to retain your staff. It will be enough to get them to show up every morning — but to take initiative, meet schedules and deadlines, operate with a seriousness of purpose and drive — that requires relationship-building and employee recognition programs that work.


How to get started. First, you need to make your employee recognition and appreciation program an investment and not an expense. It shouldn't be a line item like new equipment or the sales retreat, but rather part of your operating costs that can't be cut. Recognition programs that do not align with overall corporate strategies are impossible to defend and inevitably end up being considered an expense instead of an investment. In hard times, these aimless programs are among the first things to be cut. In order to get recognition programs embraced by management to avoid vulnerability, remember that recognition strategies and programs that tie into your corporation's business objectives or mission, vision and values are more readily defensible because senior management can see the link between your strategy and their business objectives.

Although corporations try and cut expenses, most will do their utmost to defend investments they believe will help grow the business and deliver profits to shareholders.

If your recognition strategy is linked to senior management's business strategies, it makes it much more likely that someone in the C-Suite will act as your recognition champion.

Take a hard look at your proposed recognition programs. Do you have a written recognition strategy? Does this strategy align and link up with your senior leadership's business objectives? Do your leaders understand the strategy and its links? Do your leaders actively support your recognition programs?


It takes lots of fuel to keep a professional sales team charged, which is why so many companies have reward programs that stand out. To retain top performers and keep them energized often requires a terrific reward unattainable any other way, from a fancy sports car to an all-paid luxury vacation. Companies that can offer these rewards should continue to do so because commission-based work is unique and requires another set of rules.

But what about the hundreds of other jobs and occupations that aren't eligible for the Cadillac payoff? How can we keep those employees engaged, committed, loyal and focused? Reward them with respect.

Recognition programs demonstrate respect for your employees. A meaningful, thoughtful employee appreciation program is about valuing employees' efforts and having respect for who they are and what they do. Teach your leaders that just because they give employees awards or prizes, it doesn't mean they have been recognized! All too often, senior management equates the “reward” with “recognition” when in fact, they are very different things.

Recognition starts with a person's name. Meaningful words can be much more powerful than the proverbial gold watch. Real recognition doesn't need to cost a lot; it just needs to be specific, sincere and timely.

You may have a hard time justifying your “rewards” budget, but you absolutely need to justify the concept of “recognition.” Challenge your senior leaders to practice recognition every single day. If they engage in this practice, it will become your company's silver lining.


Unless you identify your recognition program's key performance indicators (KPIs) and consistently measure them, you won't know if your recognition efforts are getting better or worse. Even with KPIs, a smart, effective recognition program won't start with measurement — it starts with a clearly defined recognition strategy that is aligned with your senior leadership's mission, vision values and corporate strategy. If you have this alignment, then the task of identifying your program's KPIs becomes much easier.

KPIs should be analyzed on two levels. The first ties into your business objectives (retention, engagement, productivity or all). Obviously, recognition only will be one of a number of factors that affect things like turnover, engagement and employee satisfaction.

The second level is much more specific. For instance, what is the program usage rate? What are your response rates? Conduct program surveys and don't only ask questions about the awards. Ask recipients about presentations and how the program makes them feel.


As a manager in times like these, it's easy to forget that the most important factor in keeping your company afloat is your people. But having an employee recognition program not only can keep your company from capsizing, it can increase productivity and raise revenues. The ability to effectively thank, reveal and coach with recognition can make a sustained difference to an employee's career and a company's future.

Holistic programs aimed at building relationships and improving the performance across organizations can influence the overall success of any recognition program. When people inside your company (employees) feel visible and appreciated, they will extend that same attitude and commitment to the people outside your company (customers). This formula is the reason why recognition alone or combined with rewards can change the future for all businesses.


Under performance-based recognition, organizations don't simply recognize the result. Recognizing workers on the journey, rather than at the destination, increases the frequency of recognition.

That increased frequency means employees receive coaching and motivation on a regular basis, providing more opportunities for course correction and improved personal performance. Ultimately, the impact on results is significant.

We often compare this approach to the way Tiger Woods owns the golf course. To hit a drive 350 yards, Tiger just doesn't step up to the tee and crank the ball. Instead, he's at the driving range, in the gym, reviewing video, walking the course and receiving constant feedback from his coach. It takes practice, plus the fostering of his competitive spirit, for Tiger to make that one single drive. The same attitude applies to employees on the front line.

Authenticity is another key component of performance-based recognition. Saying thank you isn't enough. Saying thank you in a way that is honest, genuine and meaningful — treating the employee as a person and not a body — will produce a level of loyalty, commitment and positive momentum that no amount of bonus money can buy.


To initiate a performance-based approach, begin with the basics: Understand what your organization wants the program to achieve. This is an obvious first step for many business practices, but executives often view recognition differently, lumping it in the category of “probably important but can't be measured.”

But it can. To be successful, any recognition system must have the ability to directly connect measurement to its strategic foundation. Original measurement such as telephone interviews and focus groups will reveal program awareness and usage. Links to existing measurement vehicles like employee surveys will show the relationship to key issues such as engagement, retention, recruitment and absenteeism.

Therefore, it is imperative to create a detailed assessment that evaluates your current program by reviewing internal surveys and research to determine how specific internal trends are influencing the business. Surveys often will reveal high disengagement at call centers, thus explaining high turnover. Managers need to understand what kind of impact recognition has on employee morale.


As a recognition company, one of our biggest challenges often is to create a kind of “ah-ha” moment in managers who oversee day-to-day operations. Employees commonly are disengaged because of direct managers. From the initial audit, our program experts often learn that most managers don't have the resources or motivation to create an engaged work force.

The solution is to demonstrate how a recognition program can be transformed into a performance-based recognition system to create incentive for managers to genuinely thank employees for performance and influence engagement in the process. Recognition is not an innate behavior, it's learned. The updated system needs to simplify the program, make the business case with managers and regularly communicate to employees. Rideau uses Recognition Professionals International's (RPI) Seven Best Practice Standards to benchmark the areas of improvement.


Social networking no longer is forward-thinking technology — it is the here and now and forever. To boost day-to-day recognition, social networking tools will be the most effective way for branch communications to connect employees. By building a complete online recognition portal, your organization will be able to facilitate the administration of your recognition program while having a tool to encourage both employee and management involvement.

In addition, by including a social media component similar to the immensely popular Facebook and Twitter, social media holds significant promise for recognition. Here's how:

Recognition is the action inviting a closed community — a company, an office, a family — to make a contribution. Social media asks for the same thing. Used effectively, it can facilitate the human aspect of building relationships. Success will require training select managers to be forum moderators and ensuring usage by all employees.

Generating visibility and participation for your in-house social networking tool will require a launch that will move employees to action. Introduce a contest consisting of branch challenges by uploading photographs and stories. Not only will the creativity of what each department is doing be shared, but this type of recognition can be combined with your awards program by rewarding the best of the group.

The bottom line to beneficial employee engagement is crossover. No one tool will increase employee engagement or positive motivation to increase productivity and loyalty; it will be a blend of tools, qualitative and strategy driven ideas and implementations that will make a difference to your employee performance and external relationships.

Peter Hart is president and CEO of Rideau Recognition Solutions and has been advising and serving the industry for over 20 years. He can be reached at [email protected].

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