Employee Appreciation Day is coming up, and your company might be celebrating with a company-wide “Thank You” email from the CEO or an appreciative LinkedIn post on the company page.
But unless your voluntary turnover rate is below 10%, I can guarantee that you need to rethink how you show appreciation to your workers all year long and consider implementing an employee recognition and rewards program (ERRP).
What is an Employee Recognition & Rewards Program
Before you brush off an employee’s desire to be recognized and appreciated for their work as a “needy Millennial thing,” here’s your daily reminder that millennials are already the majority of the global workforce and will make up 75% of it by 2025.
Now that we got that out of the way let’s look at what an employee recognition and rewards program is:
An ERRP is a formal and systematic approach for companies to reward and recognize their workers for a job well done, a milestone, or contributions to business success. It’s an expression of gratitude that can positively reinforce certain behaviours and even create friendly competition between employees and teams.
Employee recognition is not just a managerial responsibility. Formal programs help create an overall culture of recognition by encouraging and enabling employees to recognize their co-workers and promoting successes within an organization.
While there are various forms of ERRPs, the most common and popular approach is a gamified system by which employees can earn points or tokens from their earned praises. Those items can then be exchanged for a reward.
Rewards can range from company merch or gift cards to monetary rewards, additional time off or even stock options or donations.
The Benefits of an effective and well-structured Employee Recognition & Rewards Program
The most obvious and important benefit of an ERRP is increased employee happiness and satisfaction. As a result, employees feel more motivated and connected to their peers. They deliver a higher quality of work and demonstrate an increase in productivity. Gartner states that “being recognized can increase an employee’s contribution by 11%”.
Equal recognition opportunities for all teams and departments
A well-designed employee recognition and rewards program creates equal recognition opportunities for all departments and teams. Most companies have their “golden child,” it’s usually the largest department and the team at the core of the business's product or service that earns all the praises. Groups that operate in the background, such as administrative staff, often go unnoticed and unrecognized. An ERRP can help create equality, mutual respect and improve self-esteem.
Employee engagement and satisfaction drive business performance
A recent Gallup study found that highly engaged employees lead to
- Fewer negative outcomes (i.e. 81% reduction in absenteeism, 64% reduction in safety incidents)
- More positive results (i.e. 10% increase in customer loyalty)
- Greater organizational success (i.e. 23% increase in profitability, 13% increase in corporate citizenship)
To learn more about the building blocks of an ERRP business case, read our The Business Case for an Employee Recognition and Rewards Program.
Check out our ROI calculator for an estimate of a possible return on investment for your program.