Do Incentives and Recognition Programs Improve Employee Productivity
World Executives Digest | Do Incentives and Recognition Programs Improve Employee Productivity | It might surprise a business to know that only 3 out of 10 of their employees are completely engaged in their work. This lack of engagement affects employee turnover and productivity. According to the U.S. Bureau of Statistics, employee turnover rates are as high as 12 to 15 percent annually, which can cost 50-60% of an employee’s annual salary. It should come as no surprise that productivity also suffers for those employees who decide to stay at their jobs. In fact, only 60 percent of work time is spent being productive.
The Truth about Employee Productivity
Statistics show that disengaged and less productive employees cost U.S. companies up to 550 billion dollars. It’s a staggering amount, and productivity itself can be affected by many different variables. Some of these variables include factors that are out of both the employee and employer’s control. This includes interruptions and sifting through unimportant or unnecessary emails. In fact, the annual cost per employee on unnecessary emails is $1800!
The good news is there are areas in which a business can affect employee productivity. For example, it has been claimed that employees spend about 31 hours each month in unproductive and unnecessary meetings. Ensuring that time is spent properly in meetings and trainings.
Types of Employee Programs
It may seem obvious but it cannot be emphasized enough—employee happiness and a positive culture can reduce turnover rates by 34 percent and has even been known to produce productivity. Employees who feel as if they are making use of their skills and find meaning in their job are more productive and less likely to quit. Rewarding employees for their productivity is one way to increase their sense of purpose and provide perks, outside of their paycheck, for the job they do. Some incentives can include gift cards, voluntary time off, paid time off, or even subscriptions to popular services.
While incentives are important, showing employees that they are cared about as individuals is key to customer happiness. . So how do you show employees that you care? The most important path to expressing this is by building professional relationships amongst managers and co-workers. Employees experiencing stress, even from sources outside of work, are less likely to be productive and may benefit from on-site counseling or services offered through an Employee Assistant Program (EAP). Another great way to connect with individuals is by recognizing them in a meaningful way.
How to Recognize Your Employees
There are many great ways to recognize your employees. It can be done publicly in meetings, featuring them as employee of the month, or making an announcement via email. A more meaningful way to recognize an individual may be offering years of service awards, which is essentially an employee anniversary reward. Modern-day years of service awards are more meaningful than simply acknowledging the employee for “doing their job”. Ensuring that these service awards are personalized, it is important to get to know the employee on an individual level.
Asking other co-workers what they appreciate in said employee, taking time to learn about the individual, and even shadowing them to see what they do on a day-to-day basis is a great way to appreciate and recognize this individual. Why is this so important? It’s easy to draw up a little poster and hand out a gift card, but if an employee feels appreciated, such an act is more meaningful to them. In fact, companies that offer employees a service award trophy experience less turnover.
Does it Actually Work?
Companies that offer an anniversary award benefit from employees staying 2-4 years longer than they would at companies that do not offer such recognition! It increases engagement and thus productivity, ultimately benefiting the company. A finding by Gallup claims that highly engaged teams show 21% greater profitability. It’s clear that proper engagement and recognition work to increase employee productivity. This can be seen by multiple statistics and research, but on a more human, psychological level, everybody wants to be appreciated and find meaning in their lives. And a big part of everyone’s life is the work they do.
It is encouraged that businesses and leadership to take a look at their employees and the needs they have both in the work life and personal life and create a plan that works for them. Keep track of performance and engagement as each program is rolled out and see the changes in your company. Between the years of 2011-2016, employee productivity was an upward trend and increased by .3 percent. Let’s keep this trend growing along with our businesses.