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Lead Your Team Managing

Employee Recognition Linked to Better Business Performance

engagment Credit: Dreamstime.com

As the old saying goes, “You reap what you sow.” It holds true when it comes to how companies treat their employees, too.

Research from human resources firm Bersin & Associates suggests that companies that excel at employee recognition are on average 12 times more likely than their peers to generate strong business results, including higher profitability and better market leadership positions. In addition, in organizations where recognition occurs, employee engagement, productivity and customer service are about 14 percent better than in companies that do not reward and recognize employees well.

"Nearly 80 percent of organizations unfortunately focus on ad-hoc or tenure-based recognition programs that fail to reinforce consistent messages or make a strategic impact," said Stacia Sherman Garr, principal analyst of performance management at Bersin & Associates. "Used correctly, employee recognition is an important talent management tool that can help guide employee performance, maintain increased employee engagement, reduce employee turnover and ultimately drive business performance."

Based on advanced statistical analysis and customer interviews, Bersin & Associates has developed a set of best practices businesses can follow for improved employee recognition, including:

  • Set the tone for recognition: When senior leaders clearly communicate their expectations so that employees understand their goals and their teams' goals, the organization is much more likely to have strong business performance.
  • Create clear recognition criteria: Those companies who excel at business performance focus on recognizing people for accomplishing special projects, achieving company goals and demonstrating company values.
  • Use technology: Employees at organizations that were highly effective at integrating technology into recognition were three times more likely to be in the top quartile of business performance. This is because the technology can make recognition more accessible to employees, enables organizations to adapt their recognition programs to fit different business needs and results in more frequent recognition.
  • Engage in a multifront recognition offensive: Although there are benefits to using employee recognition software, it should be part of a comprehensive approach to employee recognition that includes offline elements. These may include praise and appreciation, special projects, certificates, trophies, plaques and "token rewards" that include rewards of smaller values or points that may be converted to other items.
  • Provide recognition and rewards employees' value:Employees want to receive rewards that are high quality, have high financial value and that they can choose.

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Chad Brooks

Chad Brooks is a Chicago-based writer and editor with nearly 20 years in media. A 1998 journalism graduate of Indiana University, Chad began his career with Business News Daily in 2011 as a freelance writer. In 2014, he joined the staff full time as a senior writer. Before Business News Daily, Chad spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including local and state government, crime, the legal system and education. Chad has also worked on the other side of the media industry, promoting small businesses throughout the United States for two years in a public relations role. His first book, How to Start a Home-Based App Development Business, was published in 2014. He lives with his wife and daughter in the Chicago suburbs.