A culture that recognizes employees can pay long-lasting dividends.

Creating a great culture of recognition is about more than just having a "fun" work environment or giving employees a pat on the back. According to an analysis by WorkXO, there's real business value in creating a positive corporate culture.

But what does that really look like? Take the following two statements, for example. Which is more indicative of a culture of employee recognition?

  • Manager: "Great job, Mary. You have won our employee of the month award. Way to go."
  • Manager: "Sheila, you did such a great job meeting the needs of that customer earlier today. You know we believe in the importance of service and the way you helped her through her problem was impressive."

While both have an element of recognition within them, the second option is clearly more heartfelt and aligned with the actual employee's duties. It also has a few key differentiators to help it stand out — it focuses on actual behaviors instead of general terms, it is timely and it focuses on values that matter to the business. To get to this point from an organizational culture perspective is not incredibly difficult, but finding a way to create this kind of culture requires a strategic approach.

Cultural, Not Transactional

When trying to institute a culture of recognition, it's critical not to look at it as a mere transaction. When appreciation feels rote or transactional, the employee can sense it and it won't have the intended effects. In the first example above, it is pretty obvious that the manager is carrying out recognition as part of a process, not as a true moment of appreciation for the employee's value and contributions.

"Cultural recognition is one of the most important tools HR leaders can implement to engage their workforces. 20 years ago, employees focused on financial rewards and job stability, but the workforce has evolved. Now, employees need to be recognized and receive emotional fulfillment at work, which means it's more pressing than ever that companies keep employees engaged." —Taro Fukuyama, CEO, Fond

Creating a culture of employee recognition starts at the top. When executives lead by example, employees throughout the organization see and model those behaviors, and recognition is no exception. Praising other workers privately as well as publicly can help influence others to do the same, creating a positive culture of appreciation.

Additionally, by connecting recognition to core values, employers can create the positive business benefits of a recognition-driven culture such as that identified in the analysis by WorkXO. For instance:

  • If the business highly values customer satisfaction, then employers can find ways to recognize and reinforce key customer satisfaction behaviors such as smiling, offering a warm greeting, acknowledging customers by name, etc.
  • Alternatively, if the key focus is on product quality, employers can recognize quality-related behaviors exhibited by employees, such as on-time delivery, reducing defects, identifying high-quality suppliers, etc.

These examples help to demonstrate how any employer can identify valuable behaviors to recognize and encourage, supporting true business value.

Focus on Behaviors and Strengths

A recent study by Lighthouse Research found that high-performing firms (those with higher revenue, employee retention and engagement scores) were 14 percent more likely to focus on employee strengths and 37 percent more likely to use recognition as a tool to encourage and reward great performance. There are a few practical lessons to take from this research and apply to the workplace:

  1. HR leaders should coach managers on how to identify and leverage the strengths of each individual employee.
  2. Managers should make it a habit to regularly recognize employee behaviors that drive value for the customers, business and shareholders.
  3. Employees need to understand that performance isn't just about what gets done, but how it gets done. The right action with the wrong behavior may not advance the employer's goals.

In the end, it's about creating and encouraging better employee performance, which ultimately rolls up into better business performance. Recognition is one of the best tools for creating this performance edge as it costs little to nothing and can be easily modeled by the right members of the organization.

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