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Why Gratitude Is the Best Employee Retention Strategy

Lauren Wingo
Lauren Wingo

Employee retention is important to keeping morale high and costs low. Here's why gratitude and employee appreciation are important elements of retention.

It doesn't always take attractive benefits or a high salary to keep employees satisfied. Many times, a heartfelt thank-you is greatly appreciated by your employees. 

In a report by Appirio, 60% of surveyed workers said they put the most value on being appreciated by management, and that appreciation plays a big role in employee satisfaction and retention. 

"Our survey found that appreciation, connectedness and emotional safety all outrank compensation as important factors in career decision-making," said Harry West, vice president of services and product management at Appirio. "Employee engagement can't be solved by simply showering workers with raises and bonuses. Companies must be dedicated to providing transparency, support and technologies that keep high-end tech talent happy." 

Appreciation is generally defined as the "recognition and enjoyment of the good qualities of someone or something." Spreading employee appreciation throughout the workplace increases connectivity to the company as a whole and impacts how you're viewed as a team leader and business owner. Recognizing employees for their hard work shows you're not only paying attention to the betterment of the company, you're establishing strong workplace relationships that could keep valuable employees around longer. [Read related article: 10 Creative Ways to Show Employee Appreciation] 

In one long-term study by O.C. Tanner, recognition was cited as the main factor as to whether or not someone stays with their current employer. The same study reported that 79% of employees who left their jobs cited lack of appreciation as their main reason for leaving. 

Studies reveal several key insights as to why and how employees want to feel appreciated: 

  • Satisfaction isn't necessarily directly correlated with compensation. According to the Appirio survey, employees desire a personal connection with their boss. Respondents said the worst qualities a boss or manager can have are being emotionally distant and uncommunicative. Some examples of that behavior include failing to give credit to workers (32% of respondents), rarely giving praise or expressing support (28%), failing to help employees with promotion (24%) and viewing workers as replaceable (13%). Another survey from O.C. Tanner reports that employees who receive recognition and appreciation from their supervisor have stronger relationships with their boss. "Employees say recognition for ongoing effort would improve manager relationships more than a 5% salary bonus," concluded the O.C. Tanner Institute. Recognizing an employee also affects their overall well-being, ultimately affecting performance. Over half of O.C. Tanner survey participants said that appreciation in the workplace makes them "feel able to take on anything." Further, when survey participants received workplace appreciation, the level of stress reported by employees decreased. 
  • Employees care most about feeling appreciated by their bosses. When considering a job offer, 60% of respondents in the Appirio report said that feeling appreciated by their managers is the most important factor. Only 5% said they were most concerned with climbing the corporate ladder, and 4% said they cared most about raises. 
  • Most workers value recognition for a job well done. Appirio found that 55% of respondents said they'd feel most disappointed if a manager never thanked them for a job well done on a big project. Support and gratitude seem to be more motivating and cherished than any other type of reward, West said. "The human touch is becoming even more important in a world where people spend so much time in the digital space," he added. 
  • How do you express your gratitude in an effective way? Timing is everything, with on-the-spot recognition being key. As the business owner and boss, expressing your appreciation in real time to your employees is not only authentic, it gives the employee motivation and inspiration to continue the work they're doing in the moment. "One of the main ways a manager can show appreciation is by providing ... a 'thank you' that is delivered in real time," West said. "Consistent, verbal feedback is a key motivator for the current workforce." Yearly and quarterly review reviews are a great time to lay out the general efforts of an employee, however, a timely thank-you is seen as a more genuine and valuable gesture. Delays in recognition could be seen as an afterthought on the manager's part and raise doubts among employees as to what management needs from their work. 
  • Everyone has their own way of giving and receiving appreciation in the workplace. In a survey led by Bonusly, gifts and words of affirmation were the top two ways employees expressed how they'd like to be recognized. A few ideas for employee appreciation gifts include a luncheon outside the office or gift cards. Managers could also get creative with an outing sponsored by the company or by giving the employee their choice of office swag, such as a sweatshirt with the company's logo or a coveted coffee mug. Words of affirmation could be as simple as, "Thank you for the hard work you did on X project," or publicly voicing your appreciation of the employee. 
  • Recognize all of your employees. As a manager, employees look to you to uphold the ethical standards and values of the company. This includes avoiding favoritism within your team. It's important to be mindful of how other employees might feel when you praise another team member. Extend your praise to other employees. Additionally, avoid thanking the same employee repeatedly in a public setting; instead, give each employee some time in the spotlight. Consistent praise of overall team achievements eliminates any thoughts of favoritism and boosts employee morale. 
  • Managers can also present their appreciation in writing. Letters of appreciation are a great alternative if the moment has passed to thank an employee for a job well done. A letter allows you, the boss, to gather your thoughts before putting pen to paper. Further, a written thank-you has more permanence. Your employees, if they are having a rough day, can refer back to your thank-you note. 

Try your hand at writing an employee recognition letter. It can be an email, a card or a letter. When writing the letter, contemplate the following: 

  • How has the employee contributed to the company through projects, accomplishments or their presence in the workplace? 
  • What qualities stand out with this employee when you think of their recent work, including projects and completed tasks?

  • Gather info about the employee, such as how long they've been there, promotions, etc., and reference these data points in your closing remarks. 

Next, draft a thoughtful letter recognizing the employee's accomplishments and their continual efforts. Be sure to send the letter promptly. 

  • Companies that struggle with high turnover should implement an employee recognition program. The O.C. Tanner Institute found that employees stay with a company that has an employee recognition program two to four years longer compared to companies without a program. Employee recognition programs can look different depending on the size and staffing needs of your company. Even if you run a very lean small business, the cost of an employee recognition program could be much less than losing any number of valuable employees in the long term. 

While every employee is different regarding their preferred way of being recognized, the bottom line is that simplicity is often the best policy. Say "thank you" the next time an employee completes a time-sensitive or especially difficult task or who carefully and conscientiously works through a thorny problem with one of your customers.   

Sammi Caramela contributed to the reporting and writing in this article. Some source interviews were conducted for a previous version of this article.

Image Credit: Sjale / Getty Images
Lauren Wingo
Lauren Wingo
Business News Daily Contributing Writer
Lauren is a freelance writer based out of Virginia. A longtime lover of writing, she attributes her keen eye for detail to her business development and intelligence analytics background. When she isn't writing, Lauren is sharing her yoga mat with her two cats or making lattes. You can read Lauren's blog at