According to recent Gallup research, more than half of all employees in the U.S. are actively seeking a new job. If you’re a leader, that’s concerning because turnover is extremely time-consuming and expensive.

Gallup’s research also shows that replacing a front-line worker costs around 40% of their salary, replacing an employee in a technical role costs 80% of their salary, and replacing a manager costs nearly 200% of their salary – not to mention the time and effort it takes you to find, hire, onboard, and train their replacement.

However, there’s a simple solution that can dramatically improve employee retention. Employees who are well-recognized by their organization are six times less likely to leave. Not only that, they are 80% more engaged.

But what does “well-recognized” mean? Great question.

Napoleon once famously said, “A soldier will fight long and hard for a bit of colored ribbon.” He was referring to various awards given to soldiers in the form of decorative ribbons worn on their uniform to highlight extraordinary performance and significant contributions to the unit’s mission.

Why is this such a powerful incentive? Because few things motivate people more than being appreciated by their leadership and respected by their colleagues.

With this in mind, how can you ensure your people feel recognized, appreciated, and respected?

Here are 10 steps to help you create a company recognition program that will significantly improve your employee retention:

1. Align with Company Values and Culture

• • Ensure recognition is tied to core values: Recognize behaviors and achievements that exemplify the organization’s values. This reinforces what the company stands for and cultivates a shared culture.
  • Use language that fits your culture: The recognition should feel genuine and fit within the company culture to be meaningful.

2. Promote Transparency and Consistency

• • Ensure clear criteria: Employees should know exactly what actions lead to recognition, so they feel motivated and see a clear connection between effort and reward.
  • Recognize consistently: Avoid favoritism. Make recognition accessible to all levels of the organization and diverse types of achievements.

3. Offer a Variety of Recognition Types

• • Formal and informal recognition: Formal programs (like annual awards) should be supplemented with informal day-to-day recognition (such as a quick “thank you” or a shout-out during meetings).
  • Peer-to-peer recognition: Afford employees the opportunity to recognize each other, not just top-down. This broadens recognition sources and builds camaraderie.

4. Make Recognition Personal and Authentic

• • Personalize whenever possible: Tailor the recognition to individual preferences. For example, some might appreciate public recognition, while others may prefer private praise.
  • Focus on sincerity: Employees can quickly sense inauthenticity. Sincere appreciation carries more weight.

5. Be Specific and Timely

• • Recognize promptly: Recognition should follow soon after the achievement or behavior to create a stronger connection between the act and the reward.
  • Detail the impact: Be specific about what the employee did and why it matters. Describe the impact of their actions on the team, clients, or the company.

6. Provide Tangible and Meaningful Rewards

• • Offer a range of rewards: Mix tangible and intangible rewards (e.g., gift cards, extra paid time off, learning opportunities, or team lunches). Avoid a one-size-fits-all approach.
  • Allow for choice: Give employees options when selecting rewards, which caters to individual needs and preferences.

7. Celebrate Milestones and Long-term Contributions

• • Service anniversaries and milestones: Recognize tenure and key contributions over time. Make these moments special to show appreciation for long-term commitment.
  • Team accomplishments: Recognize group achievements to foster teamwork and collective pride in reaching goals.

8. Create Opportunities for Career Advancement

• • Link recognition to growth: Provide recognition in the form of career development opportunities, such as special projects, promotions, or mentorship programs.
  • Showcase recognized employees: Highlight achievements in company newsletters or meetings, reinforcing the employee’s value and potential for growth.

9. Encourage Regular Feedback and Continuous Improvement

• • Solicit feedback: Ask employees what forms of recognition they value most and what motivates them. Adapt the program based on this feedback.
  • Evaluate impact: Regularly assess the program’s effectiveness on employee retention, morale, and productivity. Adjust the program based on the insights.

10. Involve Leadership Actively

• • Leadership-led recognition: Encourage leaders to actively participate in recognition. Acknowledgment from senior leaders can have a significant impact on an employee’s sense of accomplishment.
  • Lead by example: Leadership should model the behavior they want to see, recognizing each other and showing genuine appreciation for everyone.

By following these best practices, you’ll create a recognition program that not only boosts employee morale but also strengthens their commitment to the organization, leading to higher retention rates.

If you need help creating a customized recognition program for your company, let’s connect.

Sources

Gallup: Employee Retention Depends on Getting Recognition Right

Zippia: 27 Essential Employee Retention Statistics

SHRM: Managing Employee Recognition Programs

Bonusly: 5 Best Practices for Employee Recognition Programs

Caroo: 12 Employee Recognition Best Practices for Your Recognition Program in 2023

Achievers: How to Build an Employee Recognition Program

Awardco: Best Practices for Building Effective Employee Recognition Programs

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