How to Drive Better Performance Through Employee Recognition

As regular readers can imagine, I’m a big fan of research.

Research from multiple angles and sources can lead us to better decisions and applications. In addition to the external research I make a practice to seek out (from the usual suspects of Towers Watson, Hay Group, Mercer, Deloitte, etc.), I also greatly enjoy the semi-annual research Globoforce conducts with SHRM on the employer/management take on the current state of employee engagement, retention, performance, organization culture and the like.

Our most recent survey just came out. The Spring 2013 Report — Driving Stronger Performance through Employee Recognition uncovered several interesting findings as featured in the press release about the report:

1. Crowdsourced feedback and recognition can address the limitations of traditional performance reviews.

Of the companies surveyed, 77 percent conduct performance reviews once a year. Still, employees overwhelmingly feel more frequent reviews by multiple sources would provide more accurate input and create a more effective recognition program. Key findings include:

  • 85 percent of companies are currently using or would considering using social recognition (a system that empowers employees to recognize each other for great work).
  • 78 percent say crowdsourced recognition would be helpful data to incorporate into performance reviews.
  • 74 percent currently use or would consider mapping recognition awards against performance rankings/ratings.

2. Investment in recognition programs lowers workforce frustration and boosts employee productivity.

Data from the survey shows a connection between employee productivity and satisfaction and a company’s recognition program spend. According to respondents, higher budget allocations result in less frustrated and more productive employees. Employees at companies that invest more than one percent of payroll in a recognition program are:

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  • Nearly twice as likely to report increased employee productivity at their company (versus companies that spend less than 1 percent of payroll on recognition).
  • Nearly 50 percent less likely to say they are often or very frustrated with their work environment (compared to employees at companies that spend less than 1 percent of payroll on recognition).

3. Praise coupled with a prize is the most powerful motivator.

Praise is a powerful motivator for employees. When that praise is coupled with a prize, employees’ performance is driven even further. SHRM/Globoforce survey findings include:

  • 83 percent say employees are further motivated by recognition that includes a reward than recognition with no associated reward (i.e. “free” recognition).
  • 94 percent of respondents say positive feedback has a greater impact on performance (versus just six percent who say negative feedback is the better motivator)

I encourage you to check out the full report for more details.

You can find more from Derek Irvine on his Recognize This! blog.

Derek Irvine is one of the world’s foremost experts on employee recognition and engagement, helping business leaders set a higher vision and ambition for their company culture. As the Vice President of Client Strategy and Consulting at Globoforce, Derek helps clients — including some of world’s most admired companies such as Proctor and Gamble, Intuit, KPMG, and Thomson Reuters — leverage recognition strategies and best practices to better manage company culture, elevate employee engagement, increase retention, and improve the bottom line. He's also a renowned speaker and co-author of Winning with a Culture of Recognition. Contact him at irvine@globoforce.com.

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4 Comments on “How to Drive Better Performance Through Employee Recognition

  1. Well written article. I really agree with 2. Investment in recognition programs lowers workforce frustration and boosts employee productivity.

  2. Employees want to know that you appreciate them and their work; they want to know they aren’t just another cog in the machine. Positive feedback and some kind of tangible reward (lunch on the boss, a free Friday in the summer, an award for their desk) go a long way in making them feel appreciated and respected as individuals.

  3. I question the results of the survey as we don’t know how the questions were asked and whether the answers are true to the participants wishes or were poor multiple choice options.

    I highly doubt people want more performance reviews as they are poor tools for effective coaching and do not increase performance nor improve morale, as a matter of fact, they have the opposite effect.

    1. Ernest I agree with you that performance reviews can have majority negative impacts on employee morale. Employees often dread annual performance reviews as the pressure to impress and show results to managers and bosses becomes too much.

      I think what this post is trying to focus on however is recognition and praise. Instead of analysing performance based on how many sales an employee got over the year, why not simply praise them for their PR work, tell them they have done a great job so they enjoy coming into work rather than thinking if they don’t get something done they could be fired.

      Peer recognition can be a huge advantage to business productivity and competitiveness in the long term.

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