Recognition is very important because it creates that extra level of engagement and impacts discretionary effort and intent to stay. When we’re appreciated, it feels good. It’s something called the Dopamine effect. There is a direct correlation between turnover and recognition. We know that turnover is 17% less if employees receive recognition. The frequency also has an impact.
Good design starts a well thought out strategy. It’s about understanding what behaviours you’re trying to reinforce and those that you’re trying to change. The overall design should include:
The key to incentives and rewards is efficacy – the degree to which a reward can influence behaviour. Cash and cash equivalents are very low on the rewards efficacy scale. Experiences and travel are the highest motivators. Overall choice is critical because rewards are perceived differently by the many generations in the workforce today.
Earnings should be related to income, the complexity of the task, and the return on investment (ROI). Measurable results are key.
A good loyalty program is designed to impact all stages of the employee or consumer lifecycle from onboarding to advocacy. One of the challenges in consumer loyalty is there is loyalty fatigue in the market. How many loyalty cards do we all have? How many of them drive behaviour?
Good programs leverage applied behavioural economics with an engagement strategy to communicate, educate, motivate, and update the audience. Program design should elicit behaviours and a reward strategy using hedonic rewards to evoke emotion.
Through our research, we know that those who receive multiple types of recognition are happier, more engaged, committed, and intensely performing. This translates into lower turnover, higher customer satisfaction, and ultimately reduces the cost of onboarding.
Meaningful recognition has no disadvantages. In fact, leveraging a recognition solution can create consistency in application and approach and leveraging analytics can give line of sight to key areas for improvement and provide insights on behaviour throughout an organization.
Take the time to do a thorough analysis of the current situation, audit current programs, and build a strategy involving key players; including middle management. Their buy-in and participation are essential.
Defining a company’s Employee Value Proposition (EVP) to attract, inspire, and retain employees is essential. More and more companies realize this.
Recognition and rewards should be a component of the compensation model to influence discretionary effort and behaviour.
Click here to view our Impact of Recognition on Turnover stats package.
Definitely. Depending on the current situation and analysis, the strategy and tactics would be much different. In our global employee engagement research, we determined the 12 New Rules of Engagement. Each situation is entirely different and will be at various stages in the journey.
We have moved to multiple touch points driven by behavioural science, technology, and a multi-generational workforce – who all need to be approached in a way that is meaningful to them.