How does employee recognition equate to higher revenues and profits?

by on May 11, 2009 · 0 Comment POSTED IN: HR Info Center

Metrics that make employee recognition work for your company

By tying employee recognition into achieving the goals of the company. Eighty-nine percent of employees indicate that recognition is a key motivator. Great, then make sure you are rewarding employees that are moving in the right direction because if you’re not, employees will work in the wrong direction.

Metrics to tie employee recognition to revenue
So, let’s talk about the mechanics though of showing how employee recognition ties in to higher revenue and profit. First, start with a baseline of where you are right now. We did yearly employee surveys for employee morale. You really do know where you stood and what programs and benefits were working and what wasn’t. So, that’s a great way to establish a baseline.

Also, understanding key financial data is a good place to start such as sales or dollars spent on reworking parts. After introducing or revamping your employee recognition program, you need to do a three-month measurement tool, not so much for improvement but more to see what’s working and what’s not with the program.

At both three and six months, you should see who’s utilizing the employee recognition program and work on those individuals. I list here that in a year, you should pull those same areas where you baselined in step one, but I actually do that at the six-month mark as well. It kind of depends on what product your company generates but a year seems like a long time to me.

And interestingly, my boss only cared about results in a year, which coincided with budgeting season, but I needed to know if I was making an impact. Thus, I also did the measurements at six months. So, you’ll need to see what works for you.

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