Employee Recognition Program: Trends, Prevalence, and Effectiveness

Friday, May 20, 2011

In January 2011 WorldatWork, a not-for-profit organization providing education, conferences and research focused on global human resources issues, conducted a survey of some 5,600 members on issues dealing with employee recognition programs. Following responses from 677 members in the US, Canada, and other countries, the results were published in May 2011.

Employee recognition programs address a broad range of activities from length of service to programs to stimulating certain behaviors to strengthening employee attendance. While such programs may include cash as one of many forms of reward, employee recognition programs are not to be confused with incentive and bonus plans. WorldatWork reports that over 80% of employers surveyed reported at least one employee recognition program in the period from 2009 to 2011, with the prevalence in 2011 at 86%. Programs fall into several general classifications, such as:

• Service

• Performance

• Peer‐to‐peer

• Retirement

• Sales performance

• Programs to motivate specific behaviors

• Employee of the year, month, etc.

• Suggestions/ideas

• Major family event

• Safety performance

• Attendance

While the survey did not query organizational employees directly, respondents were asked to gauge the effectiveness of recognition programs in four areas:

• Satisfaction

• Motivation

• Engagement

• Retention

The effectiveness of recognition programs in impacting employee satisfaction(64%), motivation(66%), and engagement(71%) were all rated above 50% as having either an extremely positive or positive effect, only retention(42%) fell below 50%. Respondents report the median recognition program budget at 1% of payroll.

Taken on face value, relative effectiveness measures in the low 60% to the low 70% appears to be modest at best. Certainly, 42% for retention questions whether there is value in continuing such programs without a major redesign of the program and its communication plans. Also somewhat interesting is that over a period of 9 years, the prevalence of recognition programs has remained at or above the 80% level .in spite of changes in the economy.

Bob Nelson, author of “1001 Ways to Reward Employees”, “Keeping Up in a Down Economy”, and other works, is the founder of Nelson Motivation, Inc., and co-funder of the National Association for Employee Recognition. In “1001 Ways” he cites examples of the various ways in which organizations and individuals recognize others. Examples include “Thank You’s” written on business cards, candy bars, newsletters pinpointing achievements, publication of the accomplishments of employees’ children.

How effective can simple forms of recognition be when compared to tangible rewards such as cash or a large ticket prize? To start with, it would be difficult to separate the effects of recognition and motivation as drivers in modifying behavior. Maslow argued that we as humans strive for a sense of recognition and achievement from those around us including our families, friends, employers, and co-workers.  If this is the case, even the simple act of thanking someone for a job well done carries a degree of value. To add greater value, that acknowledgement should occur within a public setting such as a staff or departmental meeting.