Employee Recognition as a Motivator

Employee recognition should be a critical component of a company’s culture and employee motivator. On average 1-2% of payroll is spent on awards and programs for employee recognition and reward.

It is much more cost effective to keep a good employee than to hire a new one, train them, and hope they perform as well.

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Studies show that companies with traditional employee recognition programs have 31% lower voluntary turn-over than companies without a program at all. Additionally, only 17% of HR professionals in this survey believed their company strongly supported and recognized outstanding employee performance anyway.

On the negative side, many employees view traditional employee recognition programs as just another “top-down” management scheme. They see it as a public judgment, by management, of a small handful of employees, without peer input or opinion. Unrewarded employees often feel the system is bias or unfair. Some rewarded employees feel manipulated or targeted (by management) and the whole process creates an “Us versus Them” environment. Very counterproductive!

By contrast, organizations giving regular or routine “employee thanks” (Microsoft, Google, and Facebook) have been found to out-perform their traditional counterparts, giving  those employers a better ROI and improve retention of high performing employees. These ‘new generation’ approaches include drives to:

  • Recognition is easy and frequent. Recognizing outstanding achievements during regularly scheduled conference calls within departments or business units.
  • Awards for specific, results driven successes. This isn’t a typical “employee of the month” award, rather an award for a specific action or service during a specific time or event.
  • Rewards for all employees based on company performance.
  • Allow peers to nominate or drive rewards program.
  • Story-tell about great employees by highlighting their achievement via an internal newsletter or your company blog (such that your customers see the value your employees are bringing to them!).
  • For a better boost in employee engagement in their employee recognition program, tie recognition to your company’s mission, vision, purpose or goals.


Author: Victor Janulaitis

M. Victor Janulaitis is the CEO of Janco Associates. He has taught at the USC Graduate School of Business, been a guest lecturer at the UCLA's Anderson School of Business, a Graduate School at Harvard University, and several other universities in various programs.