Should your company invest resources into an awards and employee recognition program? And if so, how much? Rationally speaking, investing in employee recognition should have a significant positive impact on the business. But it’s not just a good idea: it’s a fact. Here are some of the ways that company gifts and awards are scientifically proven to improve your business:
- Increased employee motivation and engagement. According to a study by Gallup, companies with high levels of employee engagement outperform their peers by 147% in earnings per share. Recognition and rewards programs can increase employee engagement by creating a sense of pride and ownership in their work and fostering a positive company culture that attracts the best possible team.
- Improved retention rates. In this day and age, it is crucial to prevent worker burnout. A study by the Aberdeen Group found that companies with effective recognition programs had a 31% lower voluntary turnover rate than those without such programs. Recognition and awards programs help employees feel valued and appreciated, which can increase their loyalty to the company. This saves significant costs for the company by reducing the costs associated with recruiting, hiring, and training new employees. By this metric alone, employee rewards may pay for themselves.
- Higher worker productivity. The vast majority of employees who qualify for prize consideration use their work time more efficiently than their unmotivated counterparts. A study by Socialcast found that 69% of employees would work harder if they felt their efforts were better appreciated. By recognizing and rewarding employees for their hard work, businesses can motivate their employees to be more productive and perform at a higher level.
- Better employee satisfaction. A study by Globoforce and the Society for Human Resource Management (SHRM) found that employees are nearly two times as likely to agree their company is a good place to work when they are very or somewhat satisfied with how life events are celebrated in the workplace (64 percent), compared to those who are very or somewhat dissatisfied with the celebration of life events (35 percent). Happy, satisfied employees are more likely to provide better customer service and positively impact customer satisfaction.
- A reputation of excellence. According to another study by Globoforce and SHRM, employees who receive company awards and recognition are almost three times as likely to rate their company’s program as excellent, compared to companies that invest next to nothing. Meanwhile, employees at companies that did not invest any payroll in recognition investment were five times more likely to rate their program as poor.
- The 1% Rule. According to the same study, the sweet spot for recognition investment is around 1% of company payroll. Any less, and the program fails to deliver satisfactory results. Diminishing returns are to be found on the other side of the curve, too: while a little above 1% might be even better, too much more is simply overkill.
At the end of the day, awards and recognition programs are simply good for business. It only takes a meager investment to increase employee satisfaction, improve retention rates, boost productivity, and improve your company’s bottom line. By recognizing and rewarding employees for their hard work and achievements, the employees are set up for success and, by extension, so is the company. So if your business does not currently have a satisfactory employee rewards program in place, it’s time to start.