Recognizing employees for their hard work makes them happy.

When you have happy employees, they’ll be more engaged, and more excited about work.

When they’re more engaged, they’ll be more productive. When they’re more productive, they’ll work harder, make you more money, and motivate those around them.

It’s actually a pretty simple formula.

It’s called the service profit chain, and in fact, I’ve written about this before. The way it works is, happy employees lead to happy customers, which leads to increased sales.

So it only makes sense that you start at the beginning of the chain and make employees happy.

The 2 best pieces of advice I can give you when it comes to recognizing employees is:

1. Be Specific

Don’t just praise for the sake of praising because you think that’s what motivates employees.

It’s not the word “thank you” or “great job” that they care about, it’s the fact that when they do something great, and they secretly know they did, they’re reinforced with positivity from someone they respect.

2. Let Employees Recognize Each Other

More on this later, but research has shown that recognition is more meaningful when it comes from your peers.

It’s important for managers to do it as well, but a very smart idea would be to use a software that allows employees to publicly praise each other.

There are a few off the shelf solutions you could use, or you could easily build something internally. It doesn’t have to be that fancy, it just has to be the central place for praise.

Here are some stats on employee recognition

Here’s the secret to how recognizing employees can save you money.

Recognition leads to higher engagement. When employees are engaged, they’ll be less likely to quit, take sick days off, or not work properly, and the costs associated with these things are massive.

Research Backs This Up

1. According to the U.S. Department of Labor, the number one reason people leave their jobs is because they “do not feel appreciated.”

2. A study of over 1,700 employees conducted in 2012 by the American Psychological Association (APA) indicated that more than half of all employees intended to search for new jobs because they felt underappreciated and undervalued.

3. A worldwide study by Towers Watson concluded that “the single highest determinant for engagement is whether or not employees feel that their manager is genuinely interested in their well being”.

4. In a Gallup survey from a few years ago, they found that employees that receive regular recognition and praise:

  • Increase their own productivity
  • Increase engagement among their colleagues
  • Are more likely to stay at their company
  • Receive higher satisfaction scores from customers
  • Have better safety records, and fewer accidents on the job

5. According to research by Deloitte, companies with recognition programs “highly effective at improving employee engagement have 31% lower voluntary turnover than their peers with ineffective recognition programs”.

6. Here is the craziest statistic of them all… In the research by Deloitte, 70% of employees reported they are recognized annually or not at all.

That number is way too high.

The research shows that for employees, the most important elements of a recognition program are the ability to receive specific feedback and give recognition easily. This finding is underscored by the fact that the top reason employees do not recognize each other is because there is no established way to provide recognition.

7. In a study by Deloitte, they found that 3 out of 4 companies have recognition programs, but only 58% of employees know about them. At the very least, one simple way to improve employee recognition is to communicate it more.

Other Ways To Recognize Employees

There are literally hundreds of ways that you can effectively recognize employees, but here are a few. All of these ways cost little to no money at all. In fact, most of these are free, and incredibly simple.

  1. Greet employees by name every morning
  2. Include “thank yous” as an agenda item in a meeting
  3. Encourage employees to take courses online
  4. Profile employees in the company newsletter
  5. Reward employees with an extended lunch break
  6. Send an email to all team members recognizing an employee
  7. As employees what skills they want to learn, and then help them learn them
  8. Allow employees to pick their next project
  9. Take an employee out for lunch
  10. 10. Have a pizza party

What Do You Do To Recognize Your Employees?

It’s so easy to do, and means so much to employees, that it makes no sense for you not to do it. What tips can you share with us? Let me know in the comments!