Academic studies, research by firms such as Gallup and personal experience all confirm the following statements:
There is a direct correlation between effective employee recognition programs and employee engagement. Engaged employees are critical to long term financial performance
Shawn Anchor, author of The Happiness Advantage, states: “A decade of research proves that happiness raises nearly every business and educational outcome: raising sales by 37%, productivity by 31% and accuracy on tasks by 19%.”
Still not convinced employee recognition is all that important? Consider the following conclusion from the Carrot Principle based on surveys done by Health Stream Research and supported by data from Towers and Perrin.
- Companies that effectively recognize excellence enjoy an ROE (return on equity) three times higher than the return experienced by firms that do not;
- Companies that effectively recognize excellence enjoy an ROA (return on assets) three times higher than the return experienced by firms that do not;
- Companies in the highest quartile of recognition of excellence report an operating margin of 6.6 percent, while those in the lowest quartile report 1 percent.
The next time someone asks you if employee recognition programs pay off, don’t hesitate. Your confident answer should be, “Yes!”
Republished with gratitude from Dealer Communications’ “No-Nonsense HR” column by Kathryn Carlson.
Tags: employee morale, employee recognition, HR best practice