value of employee recognitionA large repository of studies on employee recognition has proven its benefits for companies.

When you recognise your employees, a positive chain of events is set in motion:

  • Employees feel valued,
  • They feel a shared sense of purpose
  • And alignment to the company’s objectives and values.

And, because they understand the behaviours that lead to these emotions they are more likely to repeat such exceptional performances.

Companies who recognise their employees for doing great work tend to have more productive, engaged workforces who deliver better customer experiences. This leads to greater customer satisfaction and loyalty and ultimately improves the company’s bottom line.

Sounds good right?

In a broader sense employee recognition also positively impacts company culture, relationship with the direct manager, employer value proposition (EVP), employee retention and over time, shareholder value.

To fully understand the real value of employee recognition, we need to understand what it actually is and why it’s such a deal-breaker if employees don’t receive it frequently.

So what is employee recognition exactly?

Employee recognition (sometimes referred to as social recognition) is a timely acknowledgement of an individual or group’s behaviour or effort in an informal or formal way that helps the company to achieve its goals.

The performance by that individual or group is one that is over and above a standard performance.


Why does acknowledging someone for doing a great job mean so much?

Humans have a basic fundamental need to feel appreciated. Employees are people and people respond to a sense of belonging and feeling valued. It is an important aspect of work that people feel that their contributions are helping the company to realise its goals – it creates a sense of alignment and renders employees are contributors or partners.

value of employee recognitionThis can also lead to increased employee satisfaction and productivity because they are motivated to continue delivering exceptional work. Every great workplace has a recognition-rich culture because employees want to be respected and valued for their contribution.

Are you starting to see the real value of employee recognition and how you can cultivate a high-performance culture within your company?

Employee recognition is important in strengthening coworker and manager-employee relationships. Using the right recognition and engagement technology is critical to ensuring that, as an employer, you are able to recognise your employees timeously, consistently, frequently and in a meaningful way.

Recognising your employees in ad hoc way won’t get you the results or the shift in performance improvement stats that you’re looking for. That’s why companies need to understand the value that technology-based employee recognition and engagement solutions, like bountiXP, offer in unlocking human and business performance.  

We operate in a digital age and the way companies engage with their employees needs to reflect this. And with multiple generations occupying the workplace a shift in the design of the overall employee experience (and this includes how employees are recognised) must be a top consideration.

Now that we have unpacked what employee recognition is and why it’s so important to give it to your workforce, we’ll now delve a bit deeper into the impact of employee recognition across a range of touchpoints:


Workforce impact

According to global employee engagement researchers, Gallup, in  the United States the “majority of its workforce (51%) is disengaged”. No matter where in the world you’ve set up shop, your engagement stats could still probably need improvement. According to an article in the Harvard Business Review, “40% of employed Americans said they would put more energy into their work if they were recognised more frequently.” Those are some numbers than speaks volumes about the importance of giving your employees frequent recognition.


Bottom-line impact

Employee recognition can improve a company’s bottom line. According to several studies including Gallup, when employees are engaged that leads to a 21% increase in profitability.

As an example, the Walt Disney company implemented an employee recognition program and the results were quite astonishing: A 15% improvement in employee satisfaction as a result of daily recognition from their managers. This resulted in an increase in guest satisfaction levels. This in turn positively impacted their bottom-line results.


Customer impact

Happy employees lead to happy customers – and by happy, we mean ‘engaged’. The state of your employee engagement determines the direct or indirect experiences that your customers will receive.

value of employee recognitionStudies have shown that customers are more than likely to abandon companies due to poor service experiences and as the saying goes, “it costs more to acquire new customers than to keep existing ones.”

Employee recognition is a cog in the employee engagement wheel. Because employee engagement is a critical point of sustainable competitive advantage, its importance to business success cannot be overstated.

Customers who enjoy a great experience with your company are engaged in a positive feedback loop that leads to an increased level of customer retention and loyalty. It also helps the employee feel as though they are part of something meaningful in their daily work life.

The customer experience is directly aligned to the employee experience. Take the time to think or possibly rethink the way your company connects your employee goals to your customer outcomes and implement a recognition program that inspires to deliver better customer experiences every day.

According to Gallup, companies with highly engaged employees outperform their competitors by 147% – that’s not a statistic to take lightly.

According to Gartner, 89% of companies are competing with their rivals on customer experiences.

With an onslaught of brick-and-mortar and e-commerce brands at their disposal, customers are spoilt for choice and as a result, are demanding an above-average customer experience every time they engage with your company.

Did you know that 87% of Starbucks’ customers affinity for the brand is driven by the way they treat their employees?


Employer Value Proposition impact

As a business leader you probably already know that your Employer Value Proposition (EVP) plays an important part in attracting and retaining talent. People want to work for companies who treat their employees well and who actively create a culture of recognition, learning and well-being.

Companies that do this successfully are often featured in the top companies to work for or the best workplaces lists. They signal to recruits that their company is one who continually recognises its employees for doing great work, and have successfully created brand advocates that attest to these great attributes.

Implementing employee recognition programs into your workplace enables employees to acknowledge their peers’ contributions as it relates to the company values and presents them with opportunities to be nominated for driving such positive behaviours in the workplace.

There’s no question that employee recognition is important to business performance and is a powerful catalyst for employee engagement. And, because engaged workforces have a big impact on your company’s performance, it’s probably something worth considering.

Remember to always include (or ensure your recognition technology has) the capabilities to do the following:

  1. Thank the person by name.
  2. Write a specific message to ensure the person understands what behaviour is being recognised. This reinforces the desired behaviour you want them to repeat.
  3. Add a company value to it to reinforce that behaviour.
  4. Share it with everyone in the company.

Do you have any other employee recognition activities that you implement in your company?

value of recognition

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