While salary raises are nice, in today’s climate that alone is not a sustainable strategy to maintain employee engagement. Especially because employees are looking for more than monetary compensation for their work. They are craving meaning and recognition. Employee recognition is a powerful intrinsic motivation tool that comes at a fraction of the cost (at 2% of your payroll costs). Let’s look at why and how it works.
Throwing Money at a Problem
Monetary rewards used to have more power over employee engagement – that’s why many leaders to this day think salary increases are enough. “We pay people to be engaged” – is a direct quote that Shawn Achor, the author of The Happiness Advantage got from a leader of a Fortune 100 company.
Things have changed. Most employees these days are lucky enough to be further up Maslow’s Hierarchy of Needs. A lot of them have satisfied their Physiological (e.g. food and shelter) and Safety (e.g. security, health & employment) needs. Work comes in at Belonging, Esteem, and Self-actualization. Those are the needs that the modern workforce is trying to fulfill.
Research confirms that salary increases alone don’t drive engagement – or job satisfaction for that matter. While it’s important to promote your workforce and give deserved raises to maintain fair compensation, this strategy needs to be complemented by others.
This is where effective recognition programs come in. Gallup conducted a study of the most memorable types of recognition and a “monetary reward” was down at position 5 on the list. The top 3 (out of 6) involved getting recognized by others. So let’s look at the Return on Investment (ROI) of employee recognition for your company.
The Power of Employee Recognition
Recognition helps to build a sense of belonging, esteem, and self-actualization, addressing the needs of modern-day employees. Studies indicate that employees who receive regular recognition are 4 x more likely to be engaged in their work – and 5 x times more likely to feel connected to company culture.
Furthermore, effective employee recognition programs have been shown to reduce turnover by up to 31% – leading to more cost savings as well as maintaining better company morale. Gallop has found that when recognition is an integral part of company culture, employees are 3 x times more likely to say that they feel loyal to the organization.
The ROI is clear: by boosting employee engagement with an effective recognition program, you’re also affecting the company’s bottom line, employee productivity, customer satisfaction, and other vital metrics the leadership is tracking.
Effective Recognition Programs
There is a caveat, however. In order to truly benefit from an employee recognition program, it has to be intentional and well-designed. It needs to align with the company’s goals – and become a regular part of the company culture.
Effective recognition requires implementation at all levels. Gallup has conducted a survey to see what were the most memorable sources of recognition for modern-day employees:
- Employee’s manager (28%)
- High-level leader or CEO (24%)
- The manager’s manager (12%)
- A customer (10%)
- Peers (9%)
- 17% cited “other”
Recognizing the Individual
Data shows that in order to be truly effective, the recognition needs to be authentic, honest, and personalized to the individual. When employees receive rewards that resonate with their interests and values, they feel a deeper sense of appreciation and connection to the organization.
This personal touch enhances the overall impact of your rewards and recognition program, boosting employee engagement and fostering a culture of genuine appreciation. By tailoring rewards to align with their individual preferences, you show your team that you value and appreciate them as unique individuals.
We know that it’s easier said than done – that’s why Wishlist is on a mission to deliver meaningful recognition – individualizing that process and applying principles of effective gifts in your personal life to the corporate environment. We aim to provide employers with personalized recognition and reward options for every employee, helping build stronger bonds between managers and their teams.
Wishlist can help you design an effective recognition program for your organization
When it comes to creating meaningful individualized recognition, we go a step further, harnessing the science-backed power of experiential rewards to boost team productivity. Our goal is to help you drive business outcomes by creating a sustainable shift in employee engagement – while relieving the administrative burden of such programs.
We will help you align the structure of your employee recognition program with company objectives, designing it for success. We will also help you build and present a business case to your leadership, regularly collecting data on the program’s benefits and ROI.
Ready to take your employee engagement programs to the next level? Fill out the form below and we will show you what Wishlist can do for your organization: