How Employee Recognition Programs Can Stop the Worker Exodus

Companies can stop The Big Quit by recognizing employees for good performance.

How Employee Recognition Programs Can Stop the Worker Exodus

istock photo

The Great Resignation trend continues unabated, and consultant and author Bob Nelson, Ph.D., believes there’s a remedy available for beleaguered companies: thoughtful and intentional recognition programs that foster a strong sense of pride among employees, both in their work and the companies that employ them.

“Whatever you’re trying to get more of from employees, you’ll get it if you recognize them for doing it,” says Nelson, owner of Nelson Motivation in San Diego, a keynote speaker and author of business books including 1,501 Ways to Reward Employees. “If you want any type of behavior from an employee — or even a spouse, your kids or your neighbors — thank them for the things they do that you want them to do more of.

“It’s a very simple but very powerful concept.”

Nelson says his years of research into the power of recognition and employee pride — including a three-year study that involved 47 American companies — revealed why so many managers don’t recognize employees. The most common one was they didn’t feel it was important, says Nelson.

Managers also said they didn’t have time, believed it wasn’t part of their job description or feared offending those employees who weren’t getting recognized. Some managers even felt that because they didn’t get recognition, they didn’t feel the need to recognize employees.

“It looked like a long list of excuses to me,” he says. “Ever since then, I’ve spent my career trying to help managers and organizations see the power of this pride principle and get in the game.”


Recognition Pays Off

But there are a host of compelling reasons to keep recognition top of mind. Or, as Nelson puts it, “If you see something, say something.”

For starters, a dispirited workforce leads to high turnover and low engagement. The cost of replacing an employee is estimated to be about 40% of their income (or up to two times the salary of senior executives). Furthermore, a Gallup poll shows that the cost of involuntary turnover is $1 trillion for businesses across the U.S.

As if that isn’t convincing enough, Gallup says that actively disengaged employees cost businesses in the United States anywhere from $450 to $550 billion annually. Gallup results also show that disengaged employees have 37% higher absenteeism, 49% more work accidents and commit 60% more errors.

On the positive side, consider that a study Nelson conducted in 2021 with Rick Garlick, Ph.D, also a researcher and consultant, determined that when compared to employees with low levels of individual pride in their work, high-pride-level employees are:

• 10 times more likely to be satisfied with their jobs.

• Eight times more likely to recommend their company as a good place to work.

• Eight times more likely to look forward to going to work.

• Seven times more likely to feel they’re paid fairly.

• Six times more likely to happily spend the rest of their careers with their present employers.

• Six times more likely to stay at their current job even if offered significantly higher pay to work elsewhere.

Given that consistently high levels of recognition result in strong individual pride, there’s clearly a hand-in-glove relationship between the two that’s worth cultivating, Nelson says.


Effective Recognition Matters

Many companies believe they already recognize employees because they hold a company-wide holiday party or give employees token gifts for things such as employment anniversaries or reaching certain work anniversaries. In other cases, managers think it suffices to make time to celebrate employee birthdays by serving cake at a team gathering.

While well-intended, these are ineffective methods for recognition, Nelson asserts, because they’re perfunctory and don’t truly make employees feel valued.

“What you’re actually doing is reinforcing presence, not performance,” he explains. “You’re merely reinforcing the fact that they show up for work. This ends up creating a culture of entitlement, as in, ‘I’m here, so reward me.’”

Performance-based recognition is much more effective, Nelson notes.

“If you want good performance, recognize good performance,” he says. “It becomes a self-fulfilling strategy. And people who perform well feel great about themselves. It helps them learn and grow, and the company benefits from their progress.”

While there’s a possibility of overdoing recognition to the point that it becomes meaningless because everybody gets a trophy, that won’t happen if the recognition is sincere, specific and strategic.


Power of Empowerment

Empowering employees is a great way to generate pride. As an example, Nelson cites a Connecticut-based company, Boardroom Inc., a book and newsletter publisher. Years ago, the company established an “I Power” program, which encourages all employees to submit two suggestions a week for improving the business.

A volunteer employee — a different one every week — evaluates all suggestions the same week they’re submitted. If the employee deems an idea worth pursuing, the suggestion is returned to the employee who submitted it, along with permission to implement it.

Company officials credit the program for eventually increasing annual revenue by 500% in a three-year-period as well as boosting employees’ morale and energy while virtually eliminating turnover, Nelson says.

In one case, a shipping clerk suggested that the company trim the paper size of the books it publishes by 1/16th of an inch, which would qualify them for a lower shipping rate. The result? An annual savings of $500,000 a year.

Another company gives out “unsung hero” awards. It finds candidates by calling customers and asking them to identify employees who provide great customer service.

“Just ask your customers who they always ask for when they call your company,” Nelson suggests. “Then invite a representative from that company to come in and present the award. This makes the employee a hero — they’re on cloud nine.”


Only Thing to It Is to Do It

Nelson says annual employee surveys that pose strategic questions are a great tool to help companies understand if their employees lack a sense of pride in their work or the company.

Of course, it’s also critical to measure the effectiveness of recognition programs. As Nelson points out, the late management guru Peter Drucker once said you can’t manage what you can’t measure.

But for companies plagued by things such as high turnover and low engagement, the most important thing is to ignite a pride movement through strategic recognition.

“If companies won’t do it, managers should just work it into their own behavior,” he advises. “Don’t worry about upper management, worry about what you’re doing for your direct reports — strive to catch them doing something right.

“It’s shockingly simple,” he continues. “There probably are hundreds of studies that make a clear case that the power of recognition is real — that whatever you recognize gets repeated.

“The potential for increasing pride is there for every employee and every company,” Nelson concludes. “It’s just a matter of tapping into it, you turn it on and it becomes a flood.”


Comments on this site are submitted by users and are not endorsed by nor do they reflect the views or opinions of COLE Publishing, Inc. Comments are moderated before being posted.