The ROI of Employee Recognition & Rewards

Recognize This! – Properly implemented strategic, social recognition yields solid, measurable ROI quickly.

Possibly the question I am asked most is: “What’s the ROI I can expect on our employee recognition program?”

The honest answer is: “It depends on how you implement it.”

If you simply put into place a typical Employee of the Month or a standard Years of Service program, you can expect very little return on that (for reasons I explained in this post and this one). But if you follow the principles of strategic, social recognition, you can expect a very solid ROI, indeed, in a very short amount of time.

That ROI usually takes the form of reduced employee turnover, increased productivity from improved employee engagement, and overall improved performance. But you don’t have to take my word for it.

My company, Globoforce, recently summarized a good deal of research on the ROI of recognition in this infographic, which I’m pleased to share here.

Derek Irvine

About Derek Irvine

The VP of Client Strategy and Consulting at Globoforce, Derek Irvine is one of the world’s foremost experts on employee recognition and engagement, helping business leaders set a higher vision and ambition for their organizations. As a renowned speaker and co-author of "The Power of Thanks" and "Winning with a Culture of Recognition," he teaches companies how to use recognition to proactively manage company culture. Derek holds a B.Comm and Masters of Business Studies from the Smurfit Graduate Business School at University College Dublin.

4 Responses

  1. Jim Lewis says:

    How do I do this when I just had to require staff to start paying 50% of dependent’s healthcare premium? As a nonprofit we find it difficult to keep our salaries in the 50-75 percentile, but we do it. We also, until October 1st paid 100% of staff and dependent healthcare. It sucks taking away compensation, but sometimes its the only way to stay afloat. I am open to suggestions on how to rebuild morale.

    • Derek Irvine Derek Irvine says:

      Jim, this is undoubtedly a difficult situation. The most important thing you can do, as I am sure you already are, is to openly and honestly communicate with employees why this move was necessary, how you stack up in comparison with other orgs, and your goals for doing all you can in this area. I’ve found people are much more understanding of these moves when they also understand the reasons behind the actions.

      That said, there are ways to implement no-cost recognition measures, including making it a point to thank employees very specifically and frequently for their contributions and achievements. Even if just an email, this can be quite powerful.

  2. […] It’s leaving recognition to JUST the holidays that causes problems and dramatically reduces the ROI you could be realizing for your employee recognition and reward […]

  3. […] It’s leaving recognition to JUST the holidays that causes problems and dramatically reduces the ROI you could be realizing for your employee recognition and reward […]

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