Conventional wisdom says that Employee recognition programs are good things but how effective are they really, and what kinds of impacts do they have? If you’ve been wondering about that, here are three specific examples to consider and draw your own conclusions:

Wendy
The first example is centered on a woman we’ll call Wendy. She worked in outside sales and the company she was with had no recognition program and what praise and recognition she got was in passing. That wasn’t the case with the criticism though, which led to a marked increase in workplace stress that ultimately caused Wendy to seek employment elsewhere.

The new firm she signed on with had a very different culture and had recently launched an employee recognition program. They gave out a “Customer Service Hero” award on a quarterly basis and had just given the first one when she started working.

After three months with the company, she was impressed by the cultural differences and the positive feedback and appreciation she was getting from her manager, but attended the recognition luncheon with a bit of skepticism. After all, the business world is rife with stories of badly implemented recognition programs that come off as ham-fisted, so she wasn’t sure what to expect.

To her great surprise, she won the company’s second ever “Customer Service Hero” award, which left her in tears (happy tears!), and best of all, the CEO of the company knew her name and shared the specifics of her work that earned her the award, making her feel like an integral part of the team, even though she had only been with the company for a short time.

Hollard

Hollard is a family-owned insurance company that decided to launch their recognition program using a service called “Reward Gateway” which makes it easy to recognize employee contributions by sending a wide range of eCards to employees that meet or exceed whatever benchmarks the company sets and makes it a simple matter for employees to recognize each other for their contributions.

Within the first week of launch, the company found that more than 95% of their employees were participating in the program and within 3 months, more than 700 separate “moments of recognition” had passed through the system.

Lifetime Healthcare
This health-related company rolled out a strategic recognition program that was similar to the one we mentioned with Hollard, in that it enabled all of the company’s employees to share their appreciation of each other’s efforts based on predefined behaviors set by the company’s owners.

In the first year, the company saw a 94% management participation rate, and a 77% employee participation rate in the program, but even better, after implementing the program, their profits soared, with the company reporting a net income of 1.7% on $6 billion in premium revenue, up from just 1% the year before. In addition to that, the firm saw a $63 million reduction in administrative expenses, which only helped to fatten the company’s bottom line.

The point here is that recognition programs aren’t just fluff. They have real, tangible impacts that improve employee retention rates and increase profits. That’s huge.

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