In today’s penny-pinching market, people are cutting back all kinds of necessary positions and items, just to make ends meet. So the idea of an employee recognition program may seem a bit far-fetched and idealistic. Those who implement and actually track the Return on Investment of these programs however, tend to disagree. In a recent SHRM Report it was revealed that those employers who tracked the ROI on employee recognition programs, were significantly more likely to be satisfied with the benefits of these programs.
While 76% of employers implement some kind of employee recognition program, with 5% planning to start in 2012, SHRM reported that only 15% of those companies with a recognition program actually track the ROI. Of that 15%, the numbers point overwhelmingly towards the success of these programs, and the benefits they provide. Not only are employers more confident about their employees contentment, but the employees are more productive, and ultimately more profitable for the company.
When asked a series of questions regarding the effectiveness of employee recognition programs, those who tracked the ROI seemed to be much more pleased with their results. For the question “Do you think employees at your organization are rewarded according to their job performance?” a whopping 90% of those that tracked the ROI answered yes, as opposed to only 59% for those who didn’t. Faced with the inquisition “Do you think managers or supervisors at your organization effectively acknowledge and appreciate employees?” 76% that tracked the ROI said yes, while of those who chose not to track only 51% said yes. The remainder of the questions in the survey (which can be viewed in full via the above link) all saw a minimum 20% in increased satisfaction for those who tracked ROI, versus those who didn’t.
A number of elements saw improvement with an employee recognition program when tracked. Employee productivity saw an increase of 63% when tracked. Employee engagement, which was noted earlier in the survey as being one of HR’s biggest challenges, went up 61% for those who tracked the ROI. Most importantly financially, the return on profit margin increased 58%. Customer retention, employee retention, return on equity all saw upswings starting at 50%.
These numbers tell me 2 things, employee rewards and recognition programs can work, and in order for us to know this for sure, more people need to start tracking the ROI. Of the small percentage that did track the ROI, the numbers are pretty remarkable. A 63% increase in employee productivity, and a 61% increase in employee engagement are no small feats, as any HR pro knows. The fact is, we are ushering in a new era of workers, one that thrives on praise and rewards. Whether or not this goes along with your work style, in order to achieve maximum productivity, we must accommodate these young workers needs. If you currently have a rewards and recognition program in place at your work, make sure to look into tracking it’s ROI. It seems if you do choose to track your ROI, you might be pleasantly surprised.