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Career Coach: Recognition not only boosts employees, but can also give a lift to the bottom line

By Joyce E.A. Russell
Monday, October 25, 2010; 23

Suppose someone asked you the following questions: Do managers in your company do a good job of recognizing employee contributions? Have the employees in your firm recently received praise or recognition for their work?

What would you say? Let's hope you answered positively. But for a majority, getting a pat on the back may be a rare thing.

Based on a very large study of employees at U.S. organizations over a decade, Adrian Gostick and Chester Elton, who write books and conduct training programs on the power of recognition and team-building, reported some disheartening statistics:

-- 79 percent of employees who quit their jobs cite a lack of appreciation as a key reason for leaving.

-- 65 percent of North Americans report that they didn't receive recognition at all in the previous year.

The lack of recognition is not only demoralizing to employees, but it can hurt company performance. When employees know that their strengths and potential will be praised and recognized, they are more likely to produce value. Recognizing their efforts is not about making sure everyone gets a trophy. It's really about taking the time to thank people for the contributions they give to making the company a better place. This is especially meaningful these days when job insecurities run high and employees find themselves working longer hours for less pay and fewer perks. Getting a genuine thank-you from the boss can really make a difference.

In Gostick and Elton's research, firms that scored in the highest quartile in a survey of how organizations and managers recognize excellence had significantly higher returns on equity, returns on assets and operating margins, and had some of the top scores for customer and employee satisfaction and retention.

If recognition does make a difference, why don't managers recognize others more often? Some managers tell me that they offer enough praise even though I have yet to hear this from their employees. Or managers say things like, "If I recognize them too much, it won't mean anything," or "Why would I recognize them? Aren't they just doing their jobs?" Another one I hear a lot is "If I give them recognition, they will just keep asking for it." These are often the same managers who complain their bosses do not give them enough recognition.

So what's a manager to do?

First, examine what is currently being done to recognize employees at the firm. Get feedback from employees on what's working and what's not.

Second, design a recognition system that is performance-based. Make sure the system is aligned with the culture you want in your firm and the company's values and business objectives.

Third, train other managers in providing recognition.

This training might incorporate some of Gostick and Elton's recommended recognition strategies, including:

Day-to-day recognition: The most frequent, specific and least costly, this could include pats on the back, handwritten notes, team lunches, on-the-spot award certificates and thank-you gifts. Their research shows that for employees to feel valued and committed to a workplace, they need to receive some form of recognition every seven days. Can you say you have received this much feedback yourself or given this much feedback to your employees?

Above-and-beyond recognition: More formal recognition for significant accomplishments such as the achievement of sales goals, exceptional customer service, etc. Generally, they suggest awarding these to employees about every two years. The cost should depend on the impact of the achievement. It is important to make sure the award is personal to the individual, matching his or her needs, and that the presentation is given by the immediate boss.

Career recognition: Formal programs to recognize people for loyalty or cumulative contributions, such as years of service. You could start with a welcome award -- thanking them for joining the firm, followed by recognition at their one-, three- and five-year milestones. Using this type of recognition sooner rather than later is more motivational for employees. I have often thought it sad that we wait to recognize workers until they have put in 30 years at a company. Why? In today's environment in which people switch jobs so frequently, it seems to make more sense to thank them for joining the firm and staying with it each year. Of course, the award itself should be commensurate with the amount of time.

Celebration events: Consist of celebrations for successful completion of a team project, achievement of record results, new product launches, etc. This helps to recognize performance as well as build the social connection among employees, something increasingly important to today's younger workers.

Recognition doesn't happen very often in the workplace, despite the fact that it's important to employees and makes a difference to the company's bottom line. If you are one of the leaders who takes the time to recognize your staff, you will be making a difference in their lives, your life and in the success of your firm.

Joyce E.A. Russell is the director of the Executive Coaching and Leadership Development Program at the University of Maryland's Robert H. Smith School of Business. She is a licensed industrial and organizational psychologist. She can be reached at jrussell@rhsmith.umd.edu.

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