Here’s The Reason Why Money is NOT The #1 Form of Employee Recognition
It is critical, particularly during challenging economic times, that business owners recognize their employees for all their hard work. If you can reaffirm and re-enforce your team members’ value and contribution while your organization is coping with the global downturn, you stand a better chance of retaining your best people when the economy turns around and opportunities to leave become plentiful.
When we think of employee recognition, most may think of praise and financial rewards. However, it will require a holistic and integrated approach to ensure that members of your team know their importance to your continued success. Nearly everything we do as business owners in the workplace either contributes to or takes away from how recognized and appreciated our employees feel. If you, as the owner and leader of the organization, go into work feeling and acting as if you are a victim of the down economy, your team will follow your lead and adopt a helpless attitude and blame external factors for lack of growth and sales.
Employee recognition can be used strategically by employers to reward good behaviour and keep team members “present” and accountable for favourable results. It builds and reinforces the belief that they work for a company that cares and it reminds them to look for solutions (as opposed to focusing on problems or what is not working in the business).
But all employee recognition is not created equal. Almost all businesses use varying combinations of intrinsic recognition – health-care benefits, flexible work hours, time-in-lieu for volunteer activities, training opportunities and annual awards.
But recent studies (surveying thousands of workers across Australia) have clearly shown that the cornerstone of meaningful employee recognition is actually “opportunity”. An award may be a tangible, formal sign of recognition, but employees view opportunity as the primary indicator that their manager values them.
Opportunities don’t have to be expensive to be effective. You can provide the chance for a team member to better themselves by doing something as simple as trusting them with VIP customers or introducing them to a key figure inside or outside of the organization. It’s also been proven that employees find recognition more inherently valuable when it’s administered individually (i.e. in private) rather than in public.
The business owner or manager is the essential component when it comes to effectively recognizing valuable team members. Companies should employ the 80-20 rule-keeping in mind that team members respond best to a blend of diverse mix of employee recognition. Only a small percentage (20%) of an employee’s overall recognition can come from peers and financial means before it loses its effect. The remaining 80% should come from the business (i.e. intrinsic recognition) and direct praise must always come from the manager, and be delivered in private, in order to maximize the impact.
When you consider it from the perspective of the employee, it makes perfect sense. The manager or business owner ultimately decides who gets hired, who gets fired and who gets promoted. Timely approval and recognition from the owner or manager is the best way for an employee to judge his/her progress and stay accountable by focusing on targets and solutions. Opportunity is in fact the #1 motivator – and it often won’t cost the business a cent, which is great news in challenging times like these.