Why Does Employee Recognition Matter?

Why Does Employee Recognition Matter?

At some level, everyone likes to feel appreciated for what they do. Even if it is a simple “thank you” or acknowledgement of hard work done, it feels good to know other people notice what you’ve done. This is especially true in our professional lives. This is why, as an employer, it’s important for you to understand this and find ways to recognize your employees and celebrate your employees in routine and consistent ways. Here are a few reasons why employee recognition is vital to the success of your small business. 

Employee Recognition Leads to Motivation

One of the easiest ways for anyone to lose their motivation is by feeling like what they do does not really matter. Equally dangerous, to both employee motivation and morale, is feeling like it does not matter how important their work is because nobody notices or appreciates it. This feeling is dangerous because it not only leads to disengaged or disinterested employees, but bitter and resentful ones that are more likely to actively consider leaving your company.

By recognizing the hard work done by your employees, you can achieve the opposite feeling within your employees, however. If you make sure to let them know you appreciate what they do for your company, they will feel more fulfilled and motivated by their jobs. Feeling satisfied by work is one of the best ways to ensure motivated and hard-working employees that are focused on accomplishing the company’s goals.

Company Culture

Company culture can be one of the most difficult things to define and cultivate, especially at a new or recently expanding small business. Ideally, you want company culture to grow organically as a natural extension of the company’s core values, its mission, its customer or client base, and the people who work there. However, things are not always this simple. After all, these things do not always easily translate into actual company culture.

This is why it is important to consider employee recognition programs as a vital building block of your company’s culture. By establishing a routine of recognition, it becomes an ingrained facet of your company culture. These programs set a tone that your company is the kind of place an employee would want to work for.

Performance, Productivity, and Profitability

It should be no surprise to you that happier, more motivated employees are more productive. Therefore, by implementing employee recognition programs at your company, you are not only doing the right thing for your employees. You are also doing the right thing for your bottom line.

According to Kim Harrison of Cutting Edge PR, this is a difficult metric to specifically measure, but the impact can still be seen.  

“Measuring the direct impact on profitability is difficult because it is only one of many factors influencing employees in every workplace. However, case studies make a persuasive case that bottom line benefits have been achieved through recognition schemes. The Walt Disney World Resort established an employee recognition program that resulted in a 15% increase in staff satisfaction with their day-to-day recognition by their immediate supervisors. These results correlated highly with high guest-satisfaction scores, which showed a strong intent to return, and therefore directly flowed to increased profitability.

Likewise, Sears, Roebuck & Co. found for every 5% increase in employee attitude scores, they saw a 1-3% increase in customer satisfaction and a 0.5% increase in revenue.

On the other hand, the cost of extremely negative or ‘actively disengaged’ workers comprises about 10% of the US Gross Domestic Product annually, including workplace injury, illness, employee turnover, absences and fraud.”

These numbers show the importance of employee recognition. It is not only good for your employees and company culture, but for business as well. If you are not making a point to utilize employee recognition at your company, then you are likely leaving money on the table. 

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