It goes without saying, that when organisations look to implement new processes and schemes which are costly and require additional resources, the question about adding value to the bottom line is at the forefront of the decision-making process. It may be easy to quantify certain new programmes, for example, the output moves from X-Y. Yet, at other times, what is being measured may be somewhat intangible, making it difficult to fully evaluate its worth. Things such as feeling acknowledged and recognised, job satisfaction and motivation levels usually cannot get a definitive figure attributed to it, as it extends deeper than the surface level.
An effective reward and recognition programme has many benefits, which can be seen from the get-go. It has the potential to increase productivity and job satisfaction, enhance teamwork, increase retention of the right calibre of employees, as well as lower the rate of absenteeism and stress levels.
It goes without saying that these programmes should be tailored to each individual business and there is not a one-size-fits-all approach, as each organisation has its own set of values and core behaviours. These employee recognition schemes should be constantly evolving and adapting to the ever-changing corporate landscape, and in turn, grow with the company. It’s becoming more commonplace for organisations, both large and small, to have some sort of recognition element in place as part of the overall business metrics as the results and benefits are far superior and lasting than that of the initial costing.
Below are some easily identifiable ways to identify if a value is being added to the bottom line:
Employee Retention
First and foremost, a well designed and implemented reward and recognition scheme can help improve employee retention within an organisation. Roles with a higher retention rate often point to happier and more satisfied employees. Once the correct calibre of a candidate is hired, the key is to retain them. High retention is a solid testament to how good it is to be a part of the company, as well as rewards the company with a positive and attractive reputation.
Recruitment is very costly: from interviewing, hiring, training and lost productivity. For example, for entry-level employees, it costs 30%-50% of their annual salary to replace them, for mid-level employees, it can cost upwards of 150% and for high-level employees, it can be up to 400%. This is mind-blowing. With this in mind, it’s a win-win if employees feel acknowledged and recognised. If a formal recognition platform was in place, where employees could nominate each other, they felt looked after, they were rewarded for their hard efforts, the chances are they will remain loyal, which will ultimately impact the bottom line.
Enforces a positive culture
The notion of company culture is often overlooked as something which is not business-critical. On the contrary, it is a factor that can make or break a business (and the bottom line) and yet, one that is perhaps too often overlooked or misunderstood. Contrary to what many believe, when it comes to corporate culture, simply creating a friendly working environment is not enough. The more positive staff feel about the business, the better your external reputation will be.
Implementing a reward and recognition programme that links directly to your organisation’s values ensures that your employees are engaged for the right reasons and in a way that will benefit the business and reinforce your culture. For example, if teamwork is important to your organisation, make sure people are recognised for it. However you manage your reward and recognition scheme, the key is to make sure that rewards are very clearly linked to one or more of your core behaviours, whatever they may be.
If a business can create a set of clear parameters for how and what it gives rewards for to its employees and it has a focus on culture and behaviour, then rewards can be a highly effective tool. For example, one company that we work with only offers rewards to its employees for demonstrating positive behaviour that reflects the company culture. The upside of this is that rewards can enforce a positive culture but also demonstrate the businesses are serious and committed to the culture it wants to create.
Once your employees feel part of the large culture, that they belong and can integrate the values into how they work, then there’s a good synergy. There’s nothing worse or more damaging than disgruntled employees who disagree with their company’s culture and values.
Does not have to cost the business
The key to success in keeping your employees happy and taking your reward and recognition experience to the next level lays in being thoughtful in your approach. After all, great work shouldn’t go unnoticed.
Companies are becoming far more innovative in the way they reward their employees. This is great as it not only sets this business aside from its competition but also allows the business to be far more flexible with its employees. Some great examples of this are rewarding employees with extra vacation days, or a company car and parking at the office for a month or the ability to shadow the CEO for a week.
Saying Thank You or Well Done in front of the team or on a Winner’s Wall on a digital platform can catapult your employees forward. We all need recognition, and to know what we’re doing makes a difference and that our contribution is adding to the greater whole, and this can be free. When nominating colleagues for financial and non-financial awards on a recognition platform, employees feel a sense of achievement and take pride in knowing they are noticed, and their teammates can congratulate them.
In conclusion, reward and recognition programmes offer a really impactful way to encourage and foster a company culture. Organisations that acknowledge exceptional performance and encourage specific values or behaviours are often those that have the most effective culture. Ultimately, it’s about saying thank you to employees for exhibiting certain behaviours in the workplace, whether that be loyalty, hard work, showing integrity, or just doing a really good job. This will add value to the bottom line.
Employee recognition can help boost employee productivity, engagement and business success. Download Xexec’s free e-book to find out more.