Are you a business owner whose reluctant to implement en employee recognition program? It’s estimated that nearly 3 in 4 companies have some type of recognition program, whether it’s an employee-of-the-month program, quarterly rewards, or a simple bulletin board showcasing its hard-working employees. However, some companies view programs such as these as nothing more than a money pit, draining their budget while offering little-to-nothing in return.
To better understand the importance of an employee recognition program, you must first perform a cost-benefit analysis. Seeing the benefits alongside the necessary expenses of programs such as this will give you a better understanding as to whether or not it’s right for your company. Check out our cost-benefit analysis of employee recognition listed below.
Employee Recognition Benefits:
- Increased productivity. We’ve talked about this before on our blog, but it’s worth mentioning again that employee recognition typically results in increased productivity in the workplace. Workers who are recognized for their dedication and hard work are more willing to put forth the extra effort, which translates into greater productivity. This benefit alone is reason enough for many companies to take the plunge into a recognition program.
- Reduced turnover. Another benefit that shouldn’t be ignored is a reduced employee turnover rate. Studies have shown that workers crave recognition more than than actual money. When workers are recognized for everything they bring to the table, they are less likely to seek employment elsewhere.
- Improved worker morale. Of course, implementing an employee recognition program will likely lead to improved morale in the workplace. Whether it’s a verbal face-to-face “thanks for the hard work,” or a more formal style of recognition, such as designating an employee of the month, you can rest assured knowing it will lead to higher worker morale.
Employee Recognition Costs:
- Recognition rewards, trophies and products. If you’re going to implement an employee recognition program within your company, you’ll need to pay for products like trophies, plaque awards, gift cards, company-branded gear, etc.
- Time spent implementing a recognition program. Launching a new employee recognition program takes time – and time translates into money. It’s not a major financial burden, but it’s still one of the few costs associated with employee recognition.
- Time spend recognizing workers. In addition to implementing a recognition program, you must also invest time into the actual recognition. This is relatively small, however, and shouldn’t be of concern.