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:

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.