Nice Job: The Many Benefits of Employee Recognition

April 6, 2022

This article originally appeared in Protocol and was written by James Daly.

people in the office sitting at desksAs the return-to-work movement gains steam, managers are looking not to just replicate the office environment that many of us left more than 18 months ago, but improve it.

There's a good reason to get it right. The Microsoft Work Trend index estimates up to 40% of people are considering changing jobs in the next year. Part of that is attributed to The Great Resignation, the informal name for the widespread trend of workers leaving their jobs during the COVID-19 pandemic. According to the U.S. Bureau of Labor Statistics, 4 million Americans quit their jobs in July 2021. A survey on the external workforce reveals that employee burnout has been on the rise for years, and amid the pandemic has reached an all-time high.

"The way that companies have historically looked at employees must change," said Chris French, executive vice president at Workhuman, which produces employee recognition and continuous performance development software. "We went from an age where employees were thought of as resources to be used until no longer useful to convincing people they could be happier at work with more perks. But we've entered a different era — the human era. The chief goal is to create an environment where humans can thrive."

One solution is replicating that old-fashioned pat on the back through recognition software, which encourages praise among peers. Users say that one of the major reasons why employees resign from their jobs is due to a lack of work satisfaction. This happens when they feel that they are failing to achieve their goals despite their hard work. Soon, they feel dejected and undervalued. As a result, they quit their jobs and look for new opportunities.

That is particularly tricky these days as managers struggle to maintain a corporate culture of engagement, retention, wellness and productivity during a pandemic with workforces scattered all over the world. In a study of what leaders believe they could do to improve employee engagement, 58% of respondents replied: "give recognition." Specifically, timely and precise praise from coworkers.

Increasingly, software that helps recognize and reward awesome employees through badges or bonuses is part of that mix, helping create a company culture that values everyone's efforts and hard work.

Such a program also has retention benefits. LinkedIn, for instance, uses Bravo, a global peer-to-peer recognition and rewards program that had a significant impact on employee retention and performance for the company's more than 16,000 employees.

Eighteen months after launch and with high adoption of the program, LinkedIn examined the correlation between social recognition experience and the retention of key employees. The LinkedIn data shows not only the ripple effect that occurs in terms of performance, but the power that receiving praise has in creating additional moments of gratitude.

"People are becoming happier and more engaged, and they're part of the process of making other people more positive and engaged," said Shawn Achor, a psychological researcher who worked with the company on the program. The study found that every time an employee is recognized, they're likely to recognize two other people in the organization. As the number of awards increases, so do retention rates.

For new hires — a group LinkedIn specifically targeted with Bravo — retention rates are nearly 10 points greater for employees who receive four or more awards as opposed to employees who don't receive any. The company has also seen a significant impact on employee performance since launching Bravo.

If employees received three or more awards, 54% of those employees improved their performance rating year-over-year, LinkedIn research revealed. The award doesn't have to be high-value — the average award size is $135. It's about the sentiment of gratitude, not a large monetary value. Recognition provides the motivation that inspires people to do their best work.

Those long-term benefits accrue and lead to long-term impact. Linda Cai, VP of Talent Development at LinkedIn, noted that studies show seven out of 10 employees who receive appreciation for their work say they're happy with their jobs. Being appreciated, Cai noted, also leads to higher creativity and productivity. "It changed the way employees approach their day to day, reimagining how and why they work," she said.

How should praise be doled out? Three points are key: Praise should be timely, precise and come from peers (as opposed to a manager). "At that point, recognition becomes part of a self-sustaining system," said French. "As an employee, you're looking for good behavior and you think it's part of your job to recognize it. That requires frequency and practice, but that's when the magic happens."

In creating that culture of support, LinkedIn has expanded the ways it recognizes and empowers employees in the workplace. These include a Career Month that emphasizes professional development, networking and skill building, as well as a LiftUp initiative that provides mental health resources, meeting-free days and surprise moments like when the entire company was given a week off.

Employers have found, too, that recognition software can also be useful in maintaining staffwide esprit de corps in an age of hybrid work when there are fewer ways to bring people together. It can be particularly important with gig workers, independent and contract workers who provide services to the company's clients and make up a growing sector of staffing.

Ultimately, recognition software is part of a growing corporate mindset that recognizes the value of employee wellness on a physical as well as emotional and mental level. "People don't necessarily live to work anymore," French said. "They work to live. They are humans first, employees second."

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