Recognition of employees is more relevant than ever in today’s workplace. In response to the recession, more than 60 percent of all U.S. companies took cost-cutting actions that involved some sort of reduction in force, oftentimes increasing the workloads of existing employees, freezing salary increases, and reducing bonuses. As a result, 6 in 10 employers believe their cost-cutting measures increased workplace stress, and the added workload and diminished rewards made it more likely for employees jump ship for a job that would offer them a better work/life balance if the opportunity presented itself.

How do you increase retention as the economy rebounds? One answer many organizations are turning to is a reward or recognition program.

Even with a difficult economy and high unemployment, good people will always in demand. You can’t afford to lose your key employees to your competitors or anyone else, yet this is exactly what is at risk for employees that don’t feel recognized. "Gallup has recently done a study that shows engaged employees are more productive, profitable and more customer-service-focused and more likely to stay." Barbara Mitchell explained in a recent BLR webinar. Additionally, a Watson Wyatt study showed that companies with effective incentive programs realized a median return to shareholders about double what companies without recognition programs achieved.

Further evidence was found in a Robert Half study, which showed that 17 percent of good employees who quit their jobs did so because of lack of recognition. Last but certainly not least, Nelson Motivation reports that 78 percent of employees surveyed indicated that it was "very" or "extremely important" to be recognized for doing good work.

With all of this evidence pointing toward the need to have effective programs for the recognition of employees, employers would be well-served to implement programs immediately if they are not already in place.

Recognition of Employees: Implementing an Effective Recognition Program

Rewards and recognition programs must be tied to organizational goals to be effective. For example, if your organization is looking to differentiate your firm from your competitors, you might have a contest to see who could come up with a unique product or service. Another example would be if your firm needs to cut costs, focus rewards on ideas on how to minimize costs to encourage long-term cost reduction. Recognition of employees should not be done in a vacuum — it should be closely aligned with the organization’s strategy.

"If we do reward and recognize people, what does this get us? What does this do for our employees and for our organization?" Mitchell asked us. These are the very questions your executives may be asking when a program focusing on the recognition of employees is implemented. Two important results are increased confidence and increased innovation.

Recognition shows confidence in employees, and confident employees are more productive. For this reason, it is important to let your employees know you have confidence in their skills and abilities and share with others how much you value your employees. For example, share letters of thanks from clients or solicit thanks from vendors, if appropriate. Encourage managers to send compliments to an employee’s manager (who will then share it with the employee).

Recognition also encourages innovation. It encourages employees to come up with better ways to do a task—and they are closer to it than you are! However, for this to work, you have to make it safe to try new ideas without getting shot down immediately. Even if the idea can’t be implemented, let them know why and encourage them to keep trying. This keeps employees motivated. You can also publically thank employees for new ideas and reward new ideas, if possible. This is just one of many ways to implement programs that provide recognition of employee effort.

For more information on the various ways to provide recognition of employees, order the webinar recording of "Rewards and Recognition: How to Retain and Motivate Your Best Employees." To register for a future webinar, visit http://catalog.blr.com/audio.

Barbara Mitchell is a human resources professional and management consultant who is a recognized expert in the HR field. She is now managing partner of The Mitchell Group, a human resources consulting practice.