Insight Blog

Employee recognition is not a new concept and has always been an important factor in an employee's overall engagement with his / her company. But, as mostly done in the past, recognition can no longer be based upon tenure. Recognition programs now need to address the generations that currently represent the majority of the workforce (Generations X and Y) to truly create more meaningful employee engagement.

Why is employee engagement important?

Gallup found that companies with above-average employee engagement generated:

• 27% higher profits

• 50% higher sales

• 50% higher customer loyalty

Studies have shown that Generations X and Y need positive feedback in some form at least every 7 days. And, according to the Human Capital Institute (HCI), recognition needs to include multiple forms to truly motivate workers.

There are 3 trends in recognition programs for Generations X and Y:

1. Peer to Peer Recognition

2. Results-Based Recognition

3. Social Recognition

Peer-to-Peer Recognition entails employees nominating their peers for recognition. This approach taps into the need for Generations X and Y to have their voices heard. It is not typical, top-down recognition. It is a grass-roots recognition that involves everyone in the company. Sometimes it's a simple pat on the back given by a colleague that is truly motivating. Peer-to-Peer recognition inspires a team effort and makes everyone feel like a participant in the recognition process.

Results-Based Recognition can have a very strong influence on employee motivation. If you look at HCI's 6 best principles for applying recognition programs, you can see how Results-Based recognition plays into many of them:

1. Use both formal and informal recognition.

2. Provide a wide variety of recognition rewards.

3. Emphasize the recognition of increased quality in performance instead of quantity of effort.

4. Recognize workers frequently.

5. Reward activities that are linked to specific business objectives and / or desired cultural values.

6. Measure the cost of the recognition and rewards system and the benefits gained.

According to WorldAtWork, the following performance-based principles had the highest impact on employee retention:

• Recognition for achieving sales performance - 51%

• Program for above and beyond performance - 27%

• Programs to motivate specific behaviors - 27%

• Safety performance - 27%

Social Recognition utilizes social media and is the newest trend in recognition programs. Social recognition is effective because employees' real life connections are now living on social platforms and they share all kinds of information about their lives, including their jobs. Thus, this type of program is tailored to these younger generations. Another perk of this recognition program is that companies that enable employees to publicly share recognition on social media venues stand out as employers of choice.

The bottom line about employee recognition programs is that employers who want to continue to attract, engage and retain employees from Generations X and Y need to reevaluate their recognition programs to make sure they continue to motivate these employees in meaningful ways. And the greatest part for the companies? What gets recognized gets repeated.