The Importance of Employee Recognition

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Author(s): Lynn Jackson is vice president of client services for OI Partners-Russell Montgomery Associates in Tennessee

In this age of downsizing, right-sizing, redeployment and restructuring, employees may feel less and less important to their companies. Because of this fact, companies are realizing the importance of recognizing good behavior and performance in their employees. People who feel appreciated are more positive about themselves and their ability to contribute. Recognition awards and incentives can be effective if they are offered in a timely manner and the employees feel they are rewards that the employees care to receive.

Many companies have attendance awards and employee of the month awards and after a while these become mundane and fail to inspire employees to do their best work. Expected rewards can even become entitlements and lose their ability to reward and recognize good performance. An entitlement is any reward or recognition that is expected; once the reward is an expected event or recognition, it becomes more of an expectation or entitlement and less of a reward. As an example, one employer provides lunch for employees every Friday. Because it is an expected recognition, it is not motivating. Using the element of surprise to recognize employees is very effective.

Employee recognition needs to be simple, immediate and important to the people being recognized. Companies should offer the recognition and rewards close to the time that the desired behavior is performed. Rewards for performance that happened several months earlier can lose their importance. Criteria for awards should be clear and communicated to each and every employee so that they can see what their behavior or contribution needs to be in order to be eligible for the recognition or award.

Companies that fail to offer recognition for good behavior or performance miss out on an opportunity to allow employees to see how their work contributes and matters to the overall success of the company. One company bought clocks for all of their employees to thank them for exceeding production standards. However, every clock contained a defect that allowed the hands on the clocks to fall off. The company apologized to the employees but turned the incident into an opportunity to discuss the importance of quality in the manufacturing process. Instead of being angry that they each received a defective gift, the employees increased their efforts to ensure that their products left the assembly line with zero defects. Management pointed out that each employee experienced the disappointment and frustration that customers feel when a product does not work properly. The employees took the lesson to heart and increased their dedication to producing products that were free of defects. The experience offered an important lesson on the value of quality in the manufacturing process and it recognized the employees for their hard work. They later received an additional reward for meeting higher quality standards.

Recognition works as long as it is well thought out and relevant to the recipients. Companies can engender loyalty, a sense of belonging and higher self-esteem in one's work by showing employees that their work efforts are appreciated.

Employee recognition programs are the newest method for motivating employees. Many companies have given prizes, gift baskets, sports tickets and other trinkets to employees to build morale and increase motivation. These tactics can work as long as the employees understand the company's goals and objectives and can see a correlation between the work that they do and the objectives the company is to meet. Too often, companies offer incentives and prizes and recognition that offer no real meaning to the employees. In order for recognition programs to be meaningful and effective, they must reflect things that the employees care about. Companies must communicate with their employees to find out what matters to them, how they want to be motivated and what works best to get the best result. Below are quotes from three successful companies that have discovered what works best for their employees.

Newly appointed president of O.C. Tanner Company, Dave Petersen said, "At the top of any leader's list is the need for people who are engaged and connected to the company's mission. Recognition is strategic; it helps us connect and engage our people and transform our cultures."

Mark Servodidio, executive vice president of human resources for the global rental car giant Avis Budget Group, pointed out that "locations with the highest employee engagement have the lowest turnover rates. And our top performing locations have seen an increase of almost 200 percent in the use of our recognition program since 2004." Every day, Avis Budget Group sends out an email to its entire employee base recognizing an employee or a group for a great customer-service experience. Mark told how he was profoundly touched by a recent email that profiled an employee group that was recognized for welcoming home a wounded soldier whose father was renting a car.

Jim Olson, chairman of Harman Management Corp., the nation's largest and most profitable KFC franchisee said, "Recognition matters because it builds people, and building people is the real business of any leader." From his 40 years of experience, Jim said "We are not in the chicken business, we are in the people-development business. Chicken is the product we sell that generates the revenue we need to operate our people-development business."

These three successful business leaders all believe in recognizing employees as a key business strategy for success. And while there are some who think that employee recognition is over used and can be detrimental to a business. Studies show that those companies that have managed to balance strong leadership with recognition programs that are meaningful and tied business objectives can achieve greater results for the bottom line and a satisfied workforce.

Lynn Jackson is vice president of client services for OI Partners-Russell Montgomery Associates in Tennessee. She has over ten years of experience in career management and human resources consulting. Lynn can be reached at 901-763-1818 or ljackson@oipartners.net.

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