WILL YAKOWICZ: Why Employee Recognition Is Even More Important Than You Think

How often do you recognize your employees for a job well done? While running a startup, you don't have much time for such niceties, but failing to do so can hurt your company.

David Sturt, executive vice president at HR consulting firm O.C. Tanner Co., writes in Harvard Business Review about how recognizing employees helps drive engagement and boosts morale. He says new leaders especially can benefit from giving recognition because of how well it helps create bonds with employees.


In a survey of nearly 1,000 employees from large businesses, Sturt's company found a strong connection between recognition and job satisfaction--seven out of 10 employees who received appreciation for their good work said they're happy with their jobs. But among employees who hadn't received recognition, only 39 percent say they're satisfied at work.

"The same study found that a new leader can foster an immediate boost in employee job satisfaction--by 31 percentage points--just by recognizing those who have never received any appreciation from their superiors," Sturt writes.

Frequency also is a factor. You cannot expect to recognize an employee once and be done with it. The study found that 80 percent of employees who were recognized within the past month felt fulfilled. Meanwhile, only 42 percent of employees who hadn't received recognition in more than two years ago felt fulfilled.

But recognition isn't only for the benefit of the person who directly receives it. It "also has a significant impact on peers who see great work being rewarded," Sturt writes. "In one study, we found that just by publicly presenting some employees with a 'years of service' award, managers could increase all employees' sense that the organization cared about them."

Another O.C. Tanner study found acknowledgment helps foster loyalty. Among employees who said their company had robust recognition practices, 87 percent felt "a strong relationship with their direct manager," Sturt writes. As for the employees whose companies lacked good employee recognition, only 51 percent said they had a strong relationship with their boss.

If you're looking for ways to increase engagement, take your best-performing employees and show them some appreciation. If you don't make time for those who deserve it, they may start to look elsewhere for a company that will.