I’ve certainly written about several surveys on this topic – from the academic, industry analyst and vendor perspectives. But here’s a new one that intrigued me. I’ll admit it caught my attention primarily because of who conducted the survey – the American Psychological Association (APA) Center for Organizational Excellence. (This article also summarizes the report quite well.)
A few findings to highlight:
1) A better recognition experience leads to better business outcomes.
When these conditions are met:
- Recognition practices are fair
- Direct supervisors provide recognition effectively
- Employees value the recognition they receive
Then employees reported:
- Higher levels of job satisfaction
- A greater likelihood to work harder because of the recognition they receive
- Stronger motivation to do their best
- A greater sense of feeling valued
All of that points to elevated performance and productivity, with direct impact on the bottom line. Another bottom-line impact comes from increased retention. As readers know, replacing employees can cost 50-200% of a position’s salary, which can run into the millions of dollars quite quickly. In terms of retention, the research showed:
“Employees were most likely to plan to leave their employer in the next year when they felt less valued, had lower perceptions of fairness regarding the organization’s recognition practices, and experienced lower overall job satisfaction. Working Americans who reported high levels of supervisor effectiveness in providing employee recognition and valuing the recognition they receive were more likely to say they plan to stay with their current employer 3 years or longer.”
2) Fair pay matters most, but don’t rely on that too much.
Unsurprisingly, pay matters most. As I’ve said before, base compensation (and deserved pay increases) must be fairly given for the work done. The APA research bore this out:
“More than a quarter of working adults (28 percent) said that written or verbal appreciation from their direct supervisor is important, but when it comes to the types of recognition that working Americans say are important to them, money tops the list. Six out of 10 employees (62 percent) cited merit-based salary increases as important, followed by fair monetary compensation (47 percent), performance-based bonuses (43 percent), and promotions or advancement (38 percent).”
My concern with this type of result lies in “who defines fair?” Readers of this blog know far better than I the good and the bad of information availability through sites like Salary.com and the movement for pay transparency. And merit-based pay may be well on its last legs (the differentiation just isn’t there anymore).
Additionally, cash as the primary form of recognition becomes an entitlement or an expectation. We can’t keep giving out the same raises every year. The budget just won’t allow for it. Recognition in other forms must fill the breach.
3) We rely too much on manager recognition.
In the survey, all conclusions drawn about the importance of the frequency or amount of recognition focus on that given by managers. But the survey shows only 31% of employees say their organizations offer recognition in the form of verbal or written appreciation from supervisors. Even fewer (17%) peer-to-peer recognition. This is a tremendous missed opportunity. Even the best managers can’t see all the good happening around them. And let’s be honest – what percentage of managers in your organization would you classify as “best?” Take the burden off managers alone. Empower all employees to notice, appreciate and recognize excellence in their colleagues every day and those benefits described in point 1 above will skyrocket.
One last observation – why would a psychological association be conducting this research? It’s a bit of an obvious and “common sense” answer – because whether or not we’re recognized for what we do all day impacts our psychological well-being. And that’s also a bottom-line impact – the health and wellness of our employees.
What do recognition practices look like in your organization? Which approaches are most successful in terms of business outcomes (productivity, performance, retention, engagement)?
As Globoforce’s Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. His articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.