Director of Sales and Marketing - Europe O.C. Tanner
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Why businesses need lessons in love: making your people feel appreciated

22nd Dec 2016
Director of Sales and Marketing - Europe O.C. Tanner
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The very best relationships rely on a mutual feeling of being recognised, appreciated and respected. If one partner in a relationship starts taking the other for granted and the lines of communication breakdown, the relationship will either crumble or turn destructive.

Businesses can learn a lot from personal relationships, especially the importance of recognition and appreciation for making relationships flourish. Do businesses make their staff feel valued on a regular basis, for example, or do staff just receive the equivalent of a limp bunch of flowers on Valentine’s day?

Recognition can be a powerful driver which, if delivered correctly, can have significant business results - from improved staff loyalty through to higher profitability.

The impact of recognition

The power of recognition can be witnessed from an early age. Children who are applauded for a job well done, such as brushing their teeth properly or sharing their toys, are far more likely to repeat the positive behaviour again and again.

As children grow-up and they get to grips with what is expected of them, the parent applauds their child less; however the ‘high’ that is felt by being recognised and appreciated remains, and by harnessing this, impactful business outcomes can result.

In a study by Cicero Group Commissioned by the O.C. Tanner Institute1, which surveyed almost 1000 employees on what causes great work, it was revealed that the most important thing their manager or company does (or could do) that would cause them to produce great work, was to recognise their achievements (cited by 37%of respondents).

So what does effective recognition actually achieve?

When people are effectively appreciated and recognised at work, they feel an increase in value which leads to greater drive and determination, better work relationships and stronger connections to their organisations. They are also more likely to remain with their companies for longer and be proactively innovating.

In fact, research by the O.C. Tanner Institute has revealed that employees who are strongly recognised are 33% more likely to be proactively innovating, generating 2x more ideas per month compared to those who aren’t well recognised.2

Effective recognition can positively impact return on equity, return on assets and operating margins

By celebrating great work and inspiring people to invent, create and discover, companies grow and enjoy bottom-line benefits. This was highlighted in a study by the O.C. Tanner Institute in partnership with HealthStream Research which proved that effective recognition can positively impact return on equity (ROE), return on assets (ROA) and operating margins. Those companies that effectively recognised excellence enjoying a ROE and ROA more than three times higher than the return experienced by firms which didn’t!

On the flip-side, those companies that fail to effectively recognise its staff will experience discouragement and disenchantment amongst its workforce and are more likely to drive top performers away. The impacts will also be felt financially with businesses that don’t take recognition seriously more likely to lag behind competitors that have recognition strategies in place.

The importance of values-based recognition

So, businesses need to show their staff some love. But by simply being nice and appreciative every so often will not give businesses the results they desire. An organisation may well have a team of happy people but they won’t necessarily be doing great work.

An organisation may well have a team of happy people but they won’t necessarily be doing great work.

For recognition to deliver positive business outcomes, it needs to be values-based. This means that the values an organisation sees as being key, need to be recognised and rewarded to encourage repeat behaviour. Take, for example, a retail organisation that regards superior customer service as key to sales.

By publicly recognising and rewarding those sales representatives who ‘go above and beyond’ to improve customers’ shopping experiences, this is demonstrating what ‘great work’ looks like and encourages the behaviour to be repeated, thereby improving sales.

Depending upon a business’s industry and goals, values deserving of recognition might include speed at resolving customer complaints, innovative suggestions and friendly customer interactions.    

Key steps to delivering effective recognition

As well as ensuring recognition is value-based, organisations embarking on a recognition programme need to consider the following to ensure success:

  1. Convince business leaders of the importance of recognition. If they understand why they should do it, it will become part of the business’s DNA and recognition will be delivered in a meaningful way.
  2. Educate people on what great work ‘looks like’ and how to achieve it.
  3. Deliver frequent and timely recognition – it is important to appreciate and encourage effort daily.
  4. Reward results publicly so people know how they, too, can achieve great work. This could be in the form of a prestigious awards ceremony or it might just be a “congratulations” during an informal gathering of the person’s managers and peers.
  5. Celebrate careers – as well as delivering daily recognition, make a big deal of career milestones starting with people’s one-year anniversaries.

In the same way that successful personal relationships are built on a foundation of trust, respect and mutual appreciation, businesses must also recognise the importance of building a positive and appreciative relationship with its employees. By using values-based recognition and delivering recognition publicly and frequently, this encourages positive behaviours to be repeated which ultimately leads to business success.

It’s time for business leaders to realise the ‘love’ they need to show their people, only those that do will see their companies flourish and grow.

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