How Employee Appreciation Affects Productivity

Every February, the entirety of my company is immensely on edge. Reviews are coming up- the one time a year we can sit down with our bosses and make a case for a promotion or raise. It also happens to be the one time a year we can formally give recommendations for how our manager or the company at large can improve. Understandably, tensions are high. By March you can see a difference department by department depending on whose budget and performance allowed for upward movement. The departments who allowed for increased salaries and title changes start to perform even better, while the disappointed employees from other departments either start phoning it in or handing in their two weeks and moving on.

The predominant conclusion of a study conducted by Robert Half was that happy employees mean a more productive workplace. According to the study, the main factors that go into employee happiness are pride, fairness and respect, and feeling appreciated. The majority (79%) of the 24,000 working professionals from eight different countries they surveyed said that it was an equal balance between employer and employee as to who is primarily responsible for employee happiness.

A poll by Tjinsite, a division of TimeJobs.com, found that over 35% of the employees surveyed consider lack of recognition the biggest hindrance to their productivity. In a study conducted by researchers at the Wharton School at the University of Pennsylvania, university fund-raisers were split up into two groups. One group was instructed to go about their fundraising telephone calls as normal. The other group was given a pep talk by their manager in which they were praised for their efforts. Throughout the following week, the group who were given a pep talk out-raised the control group by 50%. In both studies, the conclusion was that rewards and recognition act as a morale booster, thereby increasing productivity.

Rewards and recognition are not exclusive to salary bumps, as was shown in the Wharton study. Geoff Pearce, managing consultant at NGA Human Resources, told Forbes Magazine that, “nurturing a positive company culture, offering tailored benefits packages and generous salary arrangements should all rank highly on the list of priorities for companies that take an active interest in making their employees feel valued and appreciated. Businesses aware of the direct correlation between workplace satisfaction and business productivity should act accordingly if they want to boost their output and gain a competitive edge.”

Friday, a consulting company that helps companies measure their employee happiness, says that teams with happy employees are 28% more productive and that people in happy moods are almost six times more likely to solve a lateral thinking test. They also say that unhappy employees are twice as likely to leave their job in the next quarter. This is backed up by another study by Bersin & Associates, that says, “companies that produce ample employee recognition have 31% lower voluntary turnover rates than companies that don’t.”

The studies that back up this theory are numerous and widespread – but what can companies do now to ensure their employees feel appreciated? Take my company for example.  We are a small company that focuses on book distribution for independent publishers. Publishing is historically rather unprofitable industry, and our company is no different. At the end of the day, there is simply just not always enough money to give deserving employees raises. So what else can companies do? Here are some ideas:

  1. Give verbal (and public) recognition: It can be easy to undervalue a good, “job well done.” But studies, such as the one conduction by Wharton, show that verbal recognition boosts moral, which in turn boosts productivity.
  2. Give employees a platform: An employee’s chance to speak up about workplace problems and managerial inefficiencies should come much more than once a year. Giving your employees a voice will give them a feeling of value that you can’t put a price on.
  3. Be transparent: Nothing’s worse than feeling like you got the wool pulled over your eyes. Let employees in on important decisions your company or department are making, and they will feel like they are important enough to be part of the process.
  4. Give employees extra time off: An overworked employee is an unhappy employee. Everybody could use a vacation once in a while, even if it’s just to their own couch.
  5. Host events for the entire company: Company events are a way for company leaders to show that they care about their employees. It is the most obvious form of employee appreciation. Company-wide events are also a perfect way to build comradrey among employees. Everyone’s happier with a friend or two!

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