Regardless of industry or job sector, all employees have an innate desire to be recognized and appreciated for their hard work. Recognition can be something as simple as saying “thanks for the hard work today,” or it can consist of a more complex program in which employees are rewarded for achieving various goals. Unfortunately, many employers fail to realize the importance of employee recognition, and as such, their business suffers as a result.
Improves Productivity
Recognition plays a direct role in a company’s productivity (or lack thereof). The U.S. Department of Labor (DOL) cites “lack of appreciation” as one of the leading reasons why employees leave work. When employees don’t receive the recognition and appreciation from their boss, they tend to work slower, with less drive, or they may choose to not work at all.
By recognizing workers for their hard work and excellence, employers will benefit from increased productivity. Going back to the basics of behavioral psychology, recognition encourages people to push themselves, which in turn results in higher productivity.
Reduces Turnover Rates
Another reason why employee recognition is important is because it reduces worker turnover rates. According to a study conducted by the Center of American Progress (CAP), the cost of replacing a mid-range employee earning $30,000 to $50,000 annually is roughly 20% of his or her salary. Assuming these numbers are correct, it would costs around $8,000 to replace a worker earning $40,000 per year.
It’s important to note that turnover costs scale with the employee’s salary. The CAP study suggests that it costs an average of 213% annual salary to replace a senior or executive position employee. Employers can prevent the headache and financial burden of having to replace employees by implementing a strong recognition/appreciation program
Improved Customer Service
Does your business involve transactions or other interactions with customers? By recognizing and showing appreciation to your employees, you’ll encourage them to go the extra mile to ensure customers are happy. Workers who are appreciated are more willing to put the forth the effort to make customers happy. This alone is reason enough to implement an employee recognition/appreciation program in your company.
Promotes Teamwork
Yet another reason why employee recognition is important is because it promotes greater teamwork in the workplace. Employee recognition sparks the drive and determination that employees need to work together. And when there’s greater teamwork in the office (or any other workplace), the business will run more smoothly.
