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Why Is Employee Recognition Important For Your Business?

Why is employee recognition important for your business, now, more than ever? For the success of your business, it’s critical to attain and keep talented, engaged employees. But how can you do that? The fact is, employees stick around when they feel valued and like they’re contributing to their workplace.

Making it a point to recognize them regularly is the key to showing them how much you value their work for your organization. Yes, you can occasionally throw out a word of thanks, or give them a tiny spoon with your company logo printed on it, but that’s not going to cut it in today’s workplace. 

What more can you do, beyond that word of thanks, that will be organized, streamlined, consistent, and not time-consuming to track? A rewards program answers the call. A rewards program meets these needs and more by offering customized gifts that employees can choose for themselves and that matter to them.

Why is Employee Recognition Important? The Growing Need for Employee Recognition in Today’s Workplace

The COVID-19 pandemic has truly shaken up the workforce, and has changed the way we work. As we continue to adapt to post-pandemic ways of working, we must embrace that things aren’t going “back to normal”. Instead, it’s the “next normal” we’re headed to, and organizations must be ready to work through the changes it brings.

These changes refer to different work practices (rethinking the five-day work week), new employee expectations, and companies learning how they can be more effective and efficient in retaining employees.

One way to address these challenges is to offer employee recognition rewards to show employees that their contributions are appreciated and valued. Below, we discuss the various workplace trends driven by the pandemic and how employee recognition can address various challenges.

The Future of Work is Employee Wellbeing

Employee wellbeing is no longer an employee benefit that’s nice to have. It’s now a must for organizations. Wellbeing is now an opportunity for companies to support employees in all aspects of their personal and work lives. This goes beyond ensuring physical wellbeing. It also includes emotional, financial, career, and social wellness.

But why is employee recognition important in ensuring employee wellbeing? Let’s take a look.

Changes from the COVID-19 pandemic have increased demand for certain products and services, placing more and more pressure on employees and leading to more work hours. As a result, many employees have experienced increased anxiety, stress, and burnout.

According to Gallup’s latest State of the Global Workplace report, U.S. and Canadian workers ranked the highest for daily stress levels of all groups surveyed. In fact, this started long before the pandemic–employee stress levels have been trending upward since 2009.

Since the pandemic started in 2020, concerns over the virus, sickness, and financial insecurity have only added to these anxieties. So, how can employee rewards and recognition help alleviate stress and anxiety for workers? 

It does this by showing them their hard work is contributing to a greater purpose, which involves creating a culture of recognition. According to a report by Harvard Business Review, when organizations publicly recognize employees for a job well done, this decreases feelings of stress and increases feelings of connection and belonging.

And research shows that companies with high recognition cultures perform better and have less turnover than those that don’t.

Efforts to Promote Employee Wellbeing Can Stem the Great Resignation

Raising wages is one way to attract and retain employees. However, another way to attain and keep top talent is to offer workplace rewards that support wellbeing. In a recent survey, 62% of employees identified employee wellbeing as a key deciding factor when applying for a new job.

Many employees are also leaving their current jobs because their employers aren’t taking the initiative to support their mental health. In fact, this is one of the major drivers of the Great Resignation. Mind Share Partners’ 2021 Mental Health at Work Report revealed that 84% of employees have experienced at least one workplace factor negatively impacting their mental health. And about 50% of full-time American workers have left a previous job due to a mental health issue.

Related: How Memorable Employee Recognition Awards Can Change Your Workplace

But employee wellbeing isn’t the only thing causing workers to leave their jobs at record numbers.

Other driving factors of the Great Resignation include:

  • Employee burnout: Burnout is one of the main culprits behind the scores of people leaving their jobs over the past two years. And it’s not a new challenge that organizations are facing. However, the issue has been exacerbated by the pandemic and its myriad problems, including longer hours, little to no time off, and little separation between work and home life since remote work became the norm. Addressing employee burnout is one of the key answers to the question “Why is employee recognition important?” To prevent burnout, employers can implement employee rewards and recognition programs that facilitate high engagement, are synonymous with wellness perks, and lead to feelings of security.
  • Toxic corporate culture: A toxic culture is 10x more likely to contribute to attrition than compensation. Top factors that contribute to a toxic corporate culture include failure to promote diversity, equity, and inclusion; ineffective leadership; workers feeling disrespected; and unethical behavior. To address this challenge, organizations can work to create a more positive work culture through a strong employee recognition program. This can promote a better sense of belonging, community, and purpose among team members.
  • Feeling unappreciated. Failure to recognize employee performance is another significant contributor to employees leaving their jobs in droves. Employees are more likely to leave companies that fail to recognize and reward strong performance. When companies fail to deliver, this leads to higher rates of attrition, which means companies could be losing some of their most productive workers during the Great Resignation. This is why cultivating a culture of recognition is so vital. Employees are less likely to leave if they feel like their employer values them and appreciates their achievements.
  • Lack of flexibility: To reduce the spread of the coronavirus, many organizations have shifted to remote work and hybrid work models. But now that we’re two years into the pandemic, a lot of employers have moved or are in the process of moving operations back to the office. And unfortunately, some of these organizations aren’t giving employees the flexibility to choose their working arrangements. It turns out that an increasing number of workers will find new jobs if their company doesn’t offer flexible working arrangements. Failure to deliver what today’s workers need could result in employers losing talented people–and struggling to replace them. On the other hand, a flexible employer that rewards top-performing employees with work schedules that make their lives easier along with meaningful recognition can retain their best workers.

Hybrid Work is What Most Workers Want

83% of workers prefer a hybrid work model, and workers report that the freedom to work from anywhere is an important benefit of their job. While many organizations are taking heed, a lot of them are having difficulty with their approach to management when it comes to hybrid working.

Challenges of hybrid work models include creating a fair and equitable workforce for all employees regardless of location and managing employees from a distance. 

In today’s hybrid working world, it’s also becoming more challenging to keep employees engaged due to remote working and less face-to-face interaction. This means employers have to get more creative to boost employee engagement.

Implementing an employee recognition program can help organizations keep employees engaged in both traditional and hybrid work environments. This might involve offering a program where employees can earn rewards, such as gift cards to their favorite store or for a night out at their favorite restaurant. The investment made in recognition will boost engagement for any employee and pay dividends in the long run. 

Related: Cultivating Mental Wellness in Our Virtual World

Creating a Culture of Recognition for the Modern Employee: 3 Keys to Meaningful Employee Recognition Programs

As companies adjust to the new normal, they must adapt to new employee expectations. Thanks to the pandemic, many employees have experienced increased stress, burnout, financial insecurity, and mental health issues related to their jobs. As a result, workers are looking to their employers to improve work conditions and cater to their mental, physical, and emotional wellbeing.

A key way to do this is to create a culture of recognition that addresses many aspects and challenges of the post-pandemic workforce, including lack of flexibility, lack of engagement, mental health problems, and feelings of unappreciation.

“Why is employee recognition important?” is a common question many business leaders ask;  here are some key ways an employee recognition program can make a difference.

Below, we’ve listed 3 best practices to empower your workforce with an employee recognition program. These strategies will not only help you recognize employees for their hard work, but can also motivate them to keep performing at a high level.

1. Recognize People Based on Specific Results and Behaviors

When it comes to creating a successful and effective employee recognition program, there are three words you should always remember: timely, appropriate, and specific.

Timely rewards refer to recognizing employees at the right time. So, if an employee is producing results for your company, reward them at that moment. Don’t wait until next week or next month. Recognition that arrives months after the fact isn’t as meaningful as recognition that you give out promptly.

Rewarding employees as they’re making contributions ensures they clearly understand expectations and the behavior you want them to keep displaying. That way, employees are more willing and able to repeat desired behaviors and actions more frequently.

Appropriate and specific rewards are also key to a successful recognition program. Offering different rewards for sales incentives, new hires, account managers, or any other category will ensure your rewards are more meaningful and relevant. 

Recognizing and rewarding based on those group-specific metrics can help you build cohesive teams that achieve goals together. This can bring a significant boost to company culture and overall employee engagement.

You can also base employee rewards on individual preferences. While some employees might like public recognition, others may prefer to be recognized in private. One employee may enjoy a free membership to a book club, whereas another might like a free gym membership. Being able to meet employee recognition needs based on individual wants can help you create more meaningful rewards that are more likely to resonate with each employee.

If you’re having trouble determining the best ways to learn which rewards employees want, the solution can be as simple as conducting a workplace survey. And if you want to take things a step further, personally interview each employee and ask them how they’d like to be rewarded.

2. Tie Recognition to Your Own Company Values or Goals

Every company has its own unique values and goals. So, creating a rewards program should never be a one-size-fits-all approach. The goals and expectations you set for your organization are unique to your particular business model, company values, and the types of people you employ.

When you align your company values and goals with employee recognition, you’re a lot more likely to see success. Why? Because if employees know exactly what your company stands for, they’re more likely to deliver the results you want. And this empowers them to receive (and you to give them) the rewards they deserve.

3. Make Recognition Easy and Frequent

While many companies have a recognition strategy of some kind in place, they either underutilize it or forget it. This is often due to not having the time to track relevant KPIs and offer specific, meaningful rewards that correspond to each achievement. But by automating your recognition program, you can apply it to your team, department, and entire organization with ease.

You can do this using employee rewards and recognition software. From giving out rewards points to allowing peer-to-peer recognition, employee recognition platforms can help you streamline and easily manage employee rewards programs.

Use a Recognition Platform to Deliver & Track Rewards

Whether your employee rewards program centers on employee wellbeing or workplace flexibility, handing out rewards is a step in the right direction. And we all know that offering meaningful rewards is the key. But what if you could easily choose custom rewards to fit your employees and company values, while allowing employees to have the final choice? And what if you didn’t have to manually track these rewards?

Using a rewards and recognition platform like Xceleration, your employees can earn reward points and spend those points on rewards that mean the most to them. Contact us today to learn how our platform can equip your business with the tools you need for an effective, impactful employee recognition program.

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