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Employee Recognition


Employee recognition is an effective tool that can help reinforce and reward the contribution that employees make to the success of a business. When employers and managers recognize, whether formally or informally, the value and effort that their employees make to the day to day operation of the business, they are reinforcing the actions and behaviors that they want to see demonstrated in the workplace.

While the importance of employee recognition is not disputed, there’s a widely held belief amongst many employers that, in order to attract and retain the best employees, you have to offer the best salary.  Although financial compensation is undoubtedly an important factor that people will consider when choosing whether to accepting a role or remaining in their current employment, it is not necessarily always the best way to recognise and reward exceptional performance.

Both industry research and motivational studies have shown that the most common reason why people look to seek alternative employment opportunities is due to them receiving limited recognition and praise from their employer.  A recent study conducted by employee recognition program provider, Reward Gateway, suggest that many employees value respect, appreciation and recognition just as much as, and often more so, than monetary rewards.  The research found that:

  • 70% of the 500 employees who participated in this research stated that they would rather work for a business which has a culture of providing recognition and employee acknowledgement for work well done, as opposed to working for a company where they were given a higher remuneration package but did not receive any recognition for their performance.  
  • The value placed on employee recognition was further supported with 56% of employees responding that they would be likely to leave an employer if they were not regularly recognised for their efforts.
  • 79% of the Australian employees reported that their preference was to be thanked by their employer on a continuous, all-year round basis, rather than only receiving such recognition formally on an annual basis such as on the achievement of their work anniversary, during their annual performance review, or at dedicated company events, such as award nights.
  • A massive 85% of employees think managers and employers should acknowledge good work and provide positive feedback and thanks as and when the good performance happens. A majority of employees think this form of recognition should occur on a continuous basis throughout the year.

The results of this research demonstrates that taking steps to recognise and acknowledge the contribution that your employees make to your business, and simply saying 'thank you', can go a long way in helping to motivate and, in turn retain, valued employees. However, despite the value that employees place on respect, appreciation and acknowledgement, a majority of the approximately $62 billion that Australian employers spend each year on employee recognition programs continues to focus primarily on rewarding employee’s for tenure (through initiatives such as long service awards and annual salary increases.

Glenn Elliott, Reward Gateway Founder and CEO, states that if employers want to improve the engagement of their employees, and to improve employee motivation and retention, “they need to urgently divert investments from tenure based, long service award programs which aren’t working but are costing businesses a fortune”. The disconnect between employer recognition programs and what employees actually want is also apparent with almost 8 in 10 of the employers who participated in the survey saying that they prioritise showing appreciation and recognition to employees who have performed good work in both a timely way and on a regular basis. In contrast, more than 60% of employees felt that their colleagues could be thanked and praised more regularly by their managers and employers.

While the importance of staff recognition as an effective and proven strategy for improving employee engagement is increasingly becoming more widely accepted, to be effective, both formal and informal forms of recognition should ideally become incorporated as a normal part of day-to-day life in the workplace. While money will always continue to motivate some individuals, what motivates one employee will not necessarily motivate another.

When implementing an employee recognition program, employers should consider the following points:

  • Provide recognition to employees as close as possible to the actual performance of the actions or behaviours that are being acknowledged. This will help to ensure that the recognition is reinforcing the desired behaviours.
  • Remember that different employees will value different forms of rewards.

For instance, some employees will like being publicly recognised for their efforts at formal events and in front of their colleagues, whilst other individuals will prefer less public forms of acknowledgement.

  • Ensure that employee’s are being recognised consistently.

For employee recognition to increase motivation, engagement and in turn, employee productivity, it must be applied consistently.

If an employee is being recognised for demonstrating a specific behaviour on one week, other employees who also meet those same standards on the following weeks should also be recognised and rewarded.

  • Managers should always be authentic when they are commending their employees. An employee will not feel appreciated if they believe that the praise is simply being provided as a strategy to boost productivity.

For further assistance please contact a member of our HR advisory team via email at [email protected] or via telephone at 1300 720 004.

Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors such as government legislation changes, may not be up-to-date at the time of reading. It is not legal advice and should not be treated as such.

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