Why a round of applause is still worth more than money

While fair pay is vital, it won’t by itself ensure your employees stick around and engage with their work

UK inflation has risen above 10% for the first time in 40 years, driven by soaring prices for food and fuel. Households are experiencing a cost of living crisis and are under mounting pressure to cope with what unions are calling ‘a living nightmare’.

Against this challenging backdrop, it might be tempting to focus on pay rises and cash rewards rather than non-cash rewards, such as recognition. But on the contrary, a recognition programme is just as important as ever and is key to encouraging great work.

Paying people fairly is crucial

If your employees aren’t being paid enough to cover their food and fuel bills, then no amount of staff recognition will stop them from leaving. It’s critical that employees are paid fairly and competitively, so that, as well as their basic physiological needs being met, they feel their employer understands their individual ‘worth’.

Nonetheless, while money is foundational, it won’t by itself ensure your employees stick around and decide to engage with their work, their teams and the organisation’s goals. In fact, it’s all too easy to assume that a pay rise or ad hoc cash reward is the solution to most employee engagement issues, but even employees who are paid well and enjoy regular monetary rewards can quickly become disengaged if they aren’t adequately appreciated or acknowledged.

Recognition remains key to ‘great work’

No amount of money will encourage a person to work harder if they are taken for granted and never recognised for their contributions. If you want employees to go the extra mile to produce great work, recognition is key.

A pay rise and monetary rewards are fleeting. They provide short-term relief and reward, but fail to provide an ongoing feeling of being valued. Increasing pay may stop a person from leaving while times are tough, but as soon as the economic pressure subsides, they may be quick to resign as money by itself won’t improve behaviour, energy and engagement levels.

The power of recognition is such that the simple act of recognising an employee’s effort and/or results in a timely, personal and authentic way can lead to a number of positive results, from increased engagement and lower instances of burnout through to more ‘great work’.

Employees who claim their managers regularly acknowledge them for good work are five times more likely to stay and when there’s a formal recognition programme at an organisation, employees feel 355% more appreciated, according to O.C. Tanner’s Global Culture Report.

Doing recognition right

So recognition is just as important as ever, but the ad hoc giving of appreciation in an unstructured and ill thought through manner may prove more demoralising than morale boosting. Recognition giving must have structure and be thoughtfully given, every single time. It simply can’t be a throw away ‘thanks for your help’ to an employees who has gone above and beyond to deliver.

Ultimately, recognition must become integrated into everyday culture in which the purposeful giving of appreciation from manager to employee, peer to peer, and employee to manager, is the natural reaction to a helpful co-worker, a great result and a milestone achievement.

And every recognition moment must be tailored to the individual, and ideally done publicly during an in-person or virtual presentation so the giver can clearly express what the recipient did and why the work was so important. There must also be the giving of a reward such as an experienced-based gift, merchandise, or ideally a symbolic award to maximise the experience.

A thriving culture needs recognition

Those companies that have figured out how to create thriving workplace cultures are in a much stronger position than those that rely heavily on pay and financial rewards to retain their people.

Flourishing organisations provide fair pay and then harness the power of recognition to reward and recognise their people. After all, it’s only once workers feel valued, acknowledged and a strong sense of belonging that they will choose to remain at an organisation and contribute to its success.