the Secret to Employee Engagement: Effective Recognition
Josh Bersin, Principal, Bersin by Deloitte, Deloitte
and engagement emerged among the most important
issues affecting organizational performance in
Deloitte’s recently released
report: Global Human Capital Trends 2015.
In fact, the proportion of respondents citing
culture and engagement as a “very important”
issue nearly doubled this year from 26 percent
to 50 percent, according to the report. As a result,
almost two-thirds of the study’s HR respondents
are looking to update or revamp their entire strategy
to measure, manage and improve employee engagement.
With many baby boomers starting to retire, and
with top performers in the workplace in short
supply, savvy executives understand that they
must tailor their talent-management strategies
to leverage their organizations’ most critical
asset — employees. And one of the most effective
ways to do this is through effective employee
recognition programs. Such programs help to engage
employees, and they support the creation of a
vibrant organizational culture that distinguishes
a company from its peers.
How do we know this? A Bersin & Associates’
study, The State of Employee Recognition in 2012,
found that modern, re-engineered recognition programs
can have a huge impact on organizational performance.
Companies that scored in the top 20% for building
a “recognition-rich” culture had 31%
lower voluntary turnover rates. Many CEOs would
pay millions of dollars to reduce voluntary turnover.
Moreover, the research shows that employee engagement,
productivity and customer service are 14 percent
better in workplaces where recognition occurs.
That 14 percent is what sets stellar companies
apart from their peers.
Five Essential Pillars of Recognition
So what does a well-designed recognition program
look like? Below are the five leading practices
1. Recognize people based on specific
results and behaviors
Forget giving someone a reward for being “employee
of the month.” Give them an award for delivering
outstanding customer service when a particular
problem occurred. This approach creates a culture
of “doing the right thing.”
2. Implement peer-to-peer recognition
— not top down
Recognition from leaders has less impact than
you think. HR managers may believe this is a key
criteria for success, but employees told us that
they feel much better when they are recognized
by their peers. That’s because peers know
what you’re doing daily, so when they recognize
your efforts, the gesture is more meaningful.
Employees often view recognition from more senior
leaders as political, and it rarely reaches the
“quiet but critical high-performers”
in an organization.
Today’s high-performance recognition programs
let anyone in the company recognize anyone else
through social tools that often use “points”
or “dollars” to reward specific behaviors
or a job well done. The thank-yous are public
and displayed on a “leader board”
that allows everyone to see them.
3. Share recognition stories
Story telling was one of the most powerful practices
we identified. When a colleague does something
great and is recognized by peers, tell people
about it in a company meeting, a newsletter or
blog. These stories create employee engagement
and demonstrate positive behaviors and leading
In our team’s weekly conference call, we
make a point of recognizing someone for strong
contributions. Not only does this make that person
feel great, it helps our leadership team promote
behaviors and results that we expect from everyone.
4. Make recognition easy and frequent
Make it simple for employees to recognize each
other. Many modern programs we have studied give
employees an allotment of “points”
or “dollars” that they may give to
others online in seconds. People who do great
things are now visible to everyone else, and this
visibility encourages others to excel.
5. Link recognition to your own company
values or goals
Companies, including Deloitte, have recognition
programs that focus on the organization’s
mission and goals. When you give someone a “thank-you”
award, the award is tied to your own organization’s
strategy (customer service, innovation, teamwork,
or even a revenue or cost-cutting goal).
This may not sound very business-like, but believe
me it works. Too often, CEOs and managers focus
on bottom line results without thinking about
how it feels to slog away and work without anyone
recognizing your efforts or saying “thank
The Psychology and Biology of Recognition
In Maslow’s hierarchy of needs, two of the
most valuable psychological needs we have as human
beings are the need to be appreciated and the
need to belong. These needs are met through peer-to-peer
thanks and recognition.
Recognition has a physiological impact on performance
as well. Well-known as the “love hormone,”
oxytocin is created in our bodies when we feel
loved or appreciated. Even shaking someone’s
hand or giving them a hug can trigger this hormone.
Research (Wall Street Journal article
Trust Molecule” by Paul J. Zakon)
shows that when we trust people at work, they
may behave in a more trustworthy way. As an organization
implements a modern recognition program and people
start thanking each other, trust and engagement
go up — improving employee morale, quality
and customer service.
This does not mean that recognition replaces the
need for feedback, accountability and goal-setting.
Organizations badly need these performance management
programs to drive alignment and performance. However,
our research shows that 83 percent of the organizations
we studied suffer from a deficit in recognition
— that these companies are underperforming
So next time you see someone doing good work or
the right thing, thank them openly.