In an online survey conducted by SHRM in 2010, over 1,000 HR professionals from top companies around the US gave their opinions on the state of employee recognition.  Results concluded that “nearly 6 out of 10 HR professionals say top management fails to make recognition a priority, and only 38 percent say top managers are very involved in employee recognition.”

So why such dismal numbers?  Part of the problem is top management must first understand the significance of employee recognition before a corporate cultural shift can be made.  Executives are concerned about expenses, (as they should), however, all too often the toll a disengaged workforce can take on the bottom line is far greater.

It’s important, then to build a strong business case of how implementing a well designed employee recognition and rewards program might seem expensive to implement, will actually save the company money in the long term, with returns of happy employees, greater productivity, and lower turnover.

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In a recent online video, Harrah’s CEO Gary Loveman sat down with the Wall Street Journal and talked about how they foster an engaging workplace environment by allowing their employees to be creative, and rewarding them for doing so.

Harrah’s is one of the largest casino gaming corporations in the world with their doors open 24/7 to customers.  Being in the service industry, employees interact directly with customers constantly.  If an employee is unhappy with their company, it shows.  In an effort to keep employees engaged, Gary believes in a well executed employee rewards program

Tangible Rewards - The first prong centers around a systemic approach that measures every category in the effort of their employees and then giving them a reward ‘that’s based on enhancements in measured guest service’.  In total, Harrah’s ‘has handed out over $120 M in cash or merchandise benefits to employees who have succeeded in improving service.

Intangible Recognition - Harrah’s also gathers valuable feedback from customers on how their employees are doing and how certain situations are handled, and personally recognizes those exemplary employees from the top.

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Many professionals know that their employee turnover in their workforce directly affects the bottom line, but how many know to what extent?  Many employee retention experts, along with human recourses consultant firm Bliss & Associates estimate that it will cost an average of 150% of an employee’s base salary to replace them should they leave.  Putting numbers behind the estimation, if an employees who’s earning $40,000 per year leaves your company, it will cost $60,000 to replace him/her.

Now that there is an understanding between employee turnover and profitability, the next question to answer is what to do about it.  In taking a look at the most recent Fortune 500 listing, most of these successful companies have initiated some type of employee recognition or rewards program into their corporate culture.  By rewarding for extraordinary performance and exemplary work ethic, employees feel a greater loyalty towards you as the employer because they feel they are a valuable asset to organization.

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Individuals who are categorized as part of the ‘Millennial Generation’ were born between 1977 and 1998, and are 75 million in numbers.  The oldest of the Millennials started entering the workforce in the last 1990’s, and will continue to grow.

It’s important to understand their personalities in an effort to continue to keep them engaged within your organization.  While Millennials believe they are highly valuable to any organization from the first day, they also possess a ‘can do’ attitude and charge-ahead mentality that other generations before them have struggled with.

Millenials are extremely loyal which has its advantages to you as the employer.  Implementing a strong employee recognition and employee rewards program will go a long way to keeping them engaged and work harder.  Millenials also want to have a friendship and feel a strong bond to their direct manager.  One way to strengthen these connections is to empower your managers to personally extend recognition to their direct report employees and reward them publicly.

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While implementing the right employee recognition program into your corporate culture is beneficial, it’s equally as important to include the right assortment of employee incentive offerings.  For decades, companies had been giving their employees either one type of reward, or at the most, a limited selection.  The employees of today are more empowered both in their personal and professional lifestyles, to where working hard for a single desk trophy is less of a motivator.  To optimize employee recognition, many companies are moving towards offering a large assortment of reward items in addition to the desk trophy.  Corporations who are currently using this strategy are finding greater returns on workplace morale and company loyalty, by letting their employees choose their own reward.

Your employees will be impressed when you deliver a rewards program offering a seemingly limitless selection of options.  Reward recipients will feel empowered in the fact they could select perhaps an iPod, or maybe a handbag they’ve been eyeing in the local department store. Employees might even choose a reward item not for themselves, but to give to someone else as a gift.

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Companies that have a well designed employee recognition and rewards program as part of their overarching HR strategy will experience:

• Increased Growth
• Greater Productivity
• Improved Profitability
• Growing Market Share

The companies who are rising to the top have discovered that once they implement the right employee incentives initiative, employees will become better engaged, more productive, and less likely to leave.

Studies by Hay Group Insight show that engaged employees can increase productivity by 30 percent, and that they are 2.5 times more likely to exceed performance expectations.

Gallup Research has also concluded that ‘engaged employees drive innovation, increase loyalty, boost revenues, and stay with the company longer’.

Through thoughtful employee recognition for their hard work and dedication, and offering meaningful rewards, will go a long way in showing them that they are a valuable asset to your organization.

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…no matter how small the employee recognition might seem to management.

Researchers Michael Kosfled and Susanne Neckermann of the Institute for the Study of Labor in Switzerland recently conducted a study(1) to find the differences in productivity of offering symbolic rewards vs doing nothing to motivate work performance.

150 people were hired to perform 2 hours of real work for a non-profit organization.  Everyone was paid a minimal flat rate, assigned to small groups and given cubicles to work in.  Half of the ‘employees’ were told they would be competing for special thanks and praises at the end of the assignment, while the other half would not.

What the researchers discovered at the end of the test, was that both groups were productive.  The key finding, however, was that those who were competing for a symbolic ‘certificate of appreciation’ outperformed (on average) 12% greater than those who did were not.

To continue to benefit from increased productivity and performance, Human Resource leadership must find ways to continue to motivate and engage their employees. Smart companies are finding ways to keep valued employees engaged while maintaining payroll and spending levels, through informal employee recognition, or a formal employee rewards program.

(1) Getting More Work for Nothing? Symbolic Awards and Worker Performance (Michael Kosfeld and Susanne Neckerman)

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