Nobody still gets a gold watch at retirement, do they?
Spoiler: trick question.
The question is not about watches, or about retirement. Both concepts continue to evolve. Smart watches and early retirees? No watches and no retirement? It depends.
One thing that hasn’t changed when it comes to employees and their employers: the pitiful amount invested in employee recognition. In fact, total spent averages just 1-2% of corporate expenditures, according to Josh Bersin at Forbes.
So, the question isn’t about watches or retirement. The riddle is how can such minimal corporate investment in recognition and retention continue to get so much, so wrong?
Most companies are:
- Spending their money in the wrong places, emphasizing the successes of just a few players;
- Devoting too little attention to employee recognition, creating ongoing, expensive hiring and retention issues;
What are most companies doing wrong? What is the cost? What is the solution?
- Failing to see that less expensive options, and better employee evaluation metrics, are keys to growth.
The Price of "Thank You"
Gold watches, lapel pins, and plastic plaques may cost little relative to other company expenditures but they add up to a staggering $46 billion market.
Think that’s a waste of money and natural resources? It gets worse. A majority of companies still follow antiquated measurements when it comes to distributing employee awards. What kind of outdated metric?
To quote Bersin:
[W]hen we looked at where this money goes, we find that 87% of the recognition programs focus on tenure. Yes, that's right. People get rewarded for sticking around.
What our research found was that tenure-based rewards systems have virtually no impact on organizational performance. Did you stay an extra year at your last job so you could get a 10-year pin? Possibly... but very unlikely.
Not only are the majority of companies distributing literal trash to employees, they are also basing the majority of their recognition on time served.
Time served? That sounds like golden handcuffs, indeed.
The first step to a solution is lessening the emphasis on time of service from the recognition equation.
A Better Solution: Voting for Employee of the Month
Recognition programs have tremendous impact on employee performance and retention.
Employee recognition fosters a culture of mutual respect and cooperation. A positive environment encourages integrity and excellence. All affect the bottom line. As Unicorn HRO writes:
Even losing a low level worker can cost you big. Low estimates say that the turnover of a single eight dollar per hour employee will end up costing your company close to four thousand dollars when you factor in recruiting, interviewing, retraining, and loss of productivity that comes from the loss. With higher paid employees, retaining employees is even more vital. (emphasis added)
Hosting an Employee of the Month (or similar) election on a regular basis can be one of several tactics that drive engagement. It can be less costly than other recognition efforts, too.
Employee of the Month Best Practices
The key to recognition is regularity.
Peer recognition on a regular basis is more valuable than an award perceived to be traded between just a few at management’s whim. Instead of annual awards or nods of good work, what about a culture that celebrates these on a regular basis?
“Set a criterion for the award and recognize all who attain it,” advises Aubry C. Daniels, PhD., in Entrepreneur. Daniels is not a fan of Employee of the Month as a top-down decision. He argues that most employee of the month nominations reinforce the good behavior of just one person instead of an entire team.
Voting: A Tool for Ongoing Recognition
What if there was something different in place of employee of the month awards? What if there weekly votes to showcase important milestones and contributors?
Voting is that tool.
A vote held across divisions is a useful tool in a system of ongoing thanks and recognition.
Company-wide voting can be very effective. It can be inclusive of all departments. The short time frame recognizes contributions as-they-happen rather than at the end of a career (or end of employment). No one is recognized for the barest of efforts, the thanks-for-showing-up-for-so-long awards of years past.
More critically, by empowering employees to vote they can shine a spotlight on efforts that might otherwise be overlooked. This process yields more meaningful awards. Voting delivers recognition in a timeframe that matters.
eBallot can support your company’s retention and recognition efforts. Use our online voting platform to engage all employees. Internal teams can set up a weekly election to shine a light on co-workers’ efforts, large and small, that move the team forward.
Choose a cost-effective, empowering solution -- voting -- and keep the unwanted company swag to a minimum. eBallot is a trusted and secure solution. Find additional voting tips in our employee of the month use case.