By Matt Alderton
Despite the promise of recovery, the global economic downturn persists. As a result, companies across Canada continue to cut costs in pursuit of profits. And unfortunately, many are required to cut people and perks, too.
That's a mistake, according to Roy Saunderson, president of the Recognition Management Institute, a Montréal-based consulting and education company specializing in strategic employee recognition. Although labour is among companies' greatest costs, he says, it's also among their greatest assets, which is why it pays to invest in an employee rewards program. "In good times and in bad, you have to look at your people first," Saunderson says. "As much as you want the bottom line results, you have to remember that your company [is] run by people, and if you want to maximize your business return you have to have a strategy for acknowledging those people."
Peter Hart, president and CEO of Rideau Recognition Solutions, another Montréal-based employee recognition consultancy, agrees. Although budgets are tight, he says, companies that want to survive the recession and thrive in the recovery must continue to find ways to affordably and effectively acknowledge their employees. "People talk about employee engagement all the time," Hart says. "Well, recognition is probably the biggest tool employers have in their toolkit to drive employee engagement."
According to Hart, employee recognition benefits employers just as much as it benefits employees. Specifically, he says, it offers three chief advantages:
Although the job market is weak, the best employees still have options. If companies want to retain their top performers, according to Hart, who says it costs a company one-and-a-half times a person's salary to replace them, thanks to lost productivity and extra training time, they must appreciate them.
Because happy workers produce more, a small investment in employee recognition often can produce a large return in sales.
Recognition is good for safety, because when employees like the people they work with-and appreciate the people they work for, they're more likely to watch out for their colleagues and do their job the way it's supposed to be done.
Employers that want to motivate employees by thanking them have two options: rewards and recognition.
"There is a big difference between recognition and rewards," Saunderson says. "Recognition tends to be more intangible; it's the 'atta-boy' feedback you give employees during a project. Rewards are the concrete incentives you give employees after a project has been completed."
Although rewards are appropriate, recognition is more effective, according to Hart. "Recognition is an emotional thing; it's ethereal. A reward is material. The reward you give at the end of a project means nothing without the everyday recognition you've given along the way," he says.
The best part about recognition is that it costs nothing to give. "The most powerful reward you can probably give is words," Hart says. "If you use them properly, they can motivate people to go above and beyond to do exceptional things."
While "thanks," "good job" and "well done" are all it takes to recognize employees, rewarding them typically requires more thought and more investment. It doesn't necessarily require cash, however. "Rewards can be monetary, but cash doesn't elevate performance as much as tangibles do," Saunderson says.
So instead of cash rewards, consider giving employees gifts, an iPod, for instance, or tickets to a hockey game. "Rewards need to be highly personalized," Saunderson says. "You need to develop a profile for what motivates each of your employees; you need to know about their families, their hobbies, their favorite sports and magazines, everything they like."
When you reward employees is just as important as how you reward them, according to Saunderson, who suggests a "pyramid" approach to recognition and rewards.
"The lower tier of the pyramid is everyday recognition," he says. "When you go up a level you have informal recognition and at the apex you have formal recognition. Formal recognition can be service awards and that kind of thing, which you give to 1% to 10% of the employee base. Not everybody's going to get it. That happens on an annual basis. Informal recognition can be both incentives and social celebrations; those tend to happen on a monthly or a quarterly basis, but they can impact anywhere from 30 to 50% of employees. Everyday recognition can happen on a daily or weekly basis and impacts anywhere from 80 to 100% of employees."
Whether you recognize and reward employees daily, monthly or quarterly, what's important is that you do it regularly and consistently. "Recognition is not rocket science," Hart says. "It's just appreciating people for who they are and recognizing them for what they do."