Does Employee Recognition Work?

In a word … YES, but a better question may be “does it matter”?

The answer is still YES and for what most of us would view as obvious reasons.  Towers Watson published a study in 2008 that suggested that companies with a highly engaged employee population turned in significantly better financial performance (a 5.75% difference in operating margins and a 3.44% difference in net profit margins) than did low-engagement workplaces.

Serious increases in engagement came about, according to the Towers Watson study, when employee recognition was a normal part of the corporate culture.  If you define engagement as an employees understanding of their role, a passion to perform that role and a willingness to put in extra effort, you can see how important recognition becomes, especially in a down economy.

Even in workplaces where opportunity and concern for employee’s well-being was considered low, recognition can have a dramatic impact on engagement (a 60% increase according to the study).  In workplaces that are a bit more enlightened and where employees feel there is a concern for their well-being and opportunity for advancement exists, recognition can increase engagement by 20%.

There are literally an unlimited number of ways to recognize someone.  Start with a hand-shake, a hand written note, or a thankful e-mail.  It’s not just a sound business practice, it’s the right thing to do!

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