Failing To Provide Recognition Is A Risky Business

Top 3 frustrations HR leaders have with their recognition and reward programs

Now more than ever, managing the employee experience from pre-hire to retire is critically important for companies. There’s a skills shortage throughout the U.S. due to a shrinking labor pool. The unemployment rate has reached record lows while the U.S. Bureau of Labor Statistics reports voluntarily quitting has reached record highs. As an HR leader, I realize these are external factors that are out of your control when it comes to hiring and retaining top talent.

However, excitingly, new research from Reward Gateway suggests there is something within your control to keep quality employees. Many organizations are failing at a few simple things, creating unnecessary risks for the business. 

Companies that do not provide on-the-job recognition are increasingly exposed to losing valuable employees in this super-competitive job market. More than half of U.S. employees surveyed stated they would leave a company that didn’t praise or thank them enough for the work they did. Even if it meant a pay raise, they would rather work for a company that had a culture where people were praised and thanked regularly for doing good work than for a company that paid 10% more but offered no praise or thanks. 

The study also provides overwhelming evidence that HR leaders believe recognition and reward programs make a positive impact on business outcomes. In fact, 94% of HR professionals agreed that an effective recognition and reward program helps drive business results, and has a positive effect on employee retention. 

While it’s great to see so many HR leaders understanding the impact of employee engagement on business, traditional methods and manual processes to achieve current workforce employee engagement goals are no longer an option. The reality is that HR workers aren’t given what they need to deliver employee engagement successfully.

Thirty-eight percent of HR workers don’t agree that their current recognition and reward programs are as effective as they could be. In comparison, just 30% of managers strongly agreed that their company provides them with the tools and understanding of how to recognize colleagues effectively.  

The top three frustrations HR leaders have with their recognition and reward programs are: 
 

1.    Moments of recognition aren’t social –– so they are not seen or celebrated by other people. 
2.    They don’t allow for continuous or immediate recognition.
3.    Employees aren’t motivated by the rewards they are given. 

Using recognition and reward techniques that were introduced decades ago will miss the mark today, leaving employees underwhelmed and disengaged, or leading them to quit altogether –– a business risk you can avoid. Giving employees a pay raise to increase engagement isn’t enough, either. To keep our best people, we must make sure great work is recognized, employees are recognized consistently and not just once a year, and make sure they view the reward as something to work for. All of this is backed up by this recent research.

The good news is that 88% of HR employees surveyed said they would be likely to invest in recognition and reward programs within the next year. The right investment will be one that not only overcomes these frustrations but also addresses the employee engagement challenges of today’s fast-paced workforce. It must be able to promote timely, visible recognition that shines the spotlight on employees while reinforcing good behaviors that align with the mission, purpose, and values for their company. It also means delivering meaningful recognition and rewards that employees appreciate and can be seen and acknowledged by their peers.

So, what is the solution that HR professionals can utilize if they want to begin addressing these challenges? It starts by changing our approach to rewards and recognition and addressing the actual problem. Then, creating a better employee experience and controlling the internal factors that might make employees want to leave.