According to Gallup, companies with a highly engaged workforce outperform their peers by 147% in earnings per share. Yet, even with more evidence stressing its importance, the state of engagement in the UK remains low, with only around a third of workers being highly engaged. As a consequence, productivity continues to lag nearly 20% behind that of other G7 countries.
Gallup also found that companies in the top quartile of employee engagement achieve higher performance across other measures of business success (compared to bottom-quartile organisations), including:
- 21% higher productivity
- 22% higher profitability
- 41% higher quality
- 48% fewer safety incidents
- 37% reduced absenteeism
It’s no surprise, then, that engaging employees and promoting positive workplace culture are both high priorities for business leaders throughout the UK and beyond.
Recognition is key to success
Employee recognition drives employee engagement. The Harvard Business Review says: “Recognising employees is the simplest way to improve morale and employee engagement”. But with over 65% of employees reporting that they don’t feel recognised at work, it’s no wonder we find ourselves in a state of disengagement – at devastating cost.
The first step towards launching a successful employee recognition programme is preparing the case for recognition and securing senior management buy-in. When senior leaders are actively involved in employee recognition, companies are nine times more likely to have strong business results. Everybody wins.
Building a business case
- Present the ROI for engaged workplaces
A recent study of annualised stock market returns1 by Russell Investment Group identified a significant market increase over a fifteen year period between FORTUNE Magazine’s ‘100 Best Companies to Work For’ versus the S&P 500 and Russell 3000. FORTUNE’s list is comprised of employers that offer dream workplaces, and are measured on employee satisfaction scores. There’s no denying it, Fortune 100 Best Companies perform more than twice as well as the general market.
- Share the impact of employee engagement on financial performance
Engaged employees perform 20% better and are 87% less likely to leave their organisations.2 And organisations with high engagement rates are 78% more productive and 40% more profitable than those organisations with low levels of engagement3.
- Show how recognition has a strong impact on employee retention
There is a correlation between the effectiveness of a recognition programme and employee turnover rates. Research suggests that the less effective a recognition programme is, the higher the employee turnover rate will be. Companies with ‘Poor’ recognition programmes have 3.3% higher turnover rates than companies with ‘Excellent’ recognition programmes. Furthermore, recognition can reduce voluntary turnover by up to 31.4%4.
- Acknowledge that not all recognition programmes are created equal
Like most business disciplines, ‘doing’ recognition is not enough – it has to be done right. Dated, inappropriate and unequal schemes can actually do more harm than good. Employee surveys will tell you not only how engaged your people are overall (as well as generating engagement in their own right!), but also how they view your current recognition activities. You may find that you have the perfect programme in place already – or maybe you’ll discover that your current investment could be better spent to generate more impact and ROI. For example, a major digital employer we’ve worked with recently saw their engagement measure jump by over 25% (from 67 to 84) thanks to improved recognition.
Taking all these factors into consideration, you may find that you have a powerful business case for making positive changes to the way you recognise and drive performance within your organisation.
For more information, inspiration and practical resources, visit http://www.achievers.com/resource/
Achievers’ mission is to change the way the world works. Our Employee Success Platform is specifically designed to drive higher levels of employee engagement. It’s built to align everyone with business objectives and company values, driven by recognising shared victories every day. It’s designed to make success a way of life.
1 Moore, Tara. “Investing in the ‘100 Best’ Beats the Market, Hands Down.” CNN Money. Jan 2011. Web. Feb. 2014
2 Haydon, Reese. “Show Me the Money: the Bottom Line Impact of Employee Engagement.” TLNT: the business of HR. 11 Jun. 2013. Web. 10 Feb. 2014
3 “What Makes a Company a Best Employer?” Hewitt Associates. 2009. Web. 10 Feb. 2014
4 Achievers customer base retention for FY2015