Good morning!
If I were to name one common obsession among leaders right now, it would be productivity. It’s a natural preoccupation—as confidence in the economy decreases, anxieties surrounding productivity and efficiency skyrocket. While some employers have taken a more aggressive approach to encourage productivity (mandating a return to the office and ending pandemic perks like wellness days), others have found alternative ways to increase productivity. Namely, recognition.
New research from Workhuman and Gallup finds that employers who dole out recognition report higher levels of productivity and other benefits. Companies that increased employee recognition observed a 9% jump in productivity, a 22% decrease in safety incidents, and a 22% decrease in absenteeism. It also helped to decrease attrition.
It’s an easy gesture that can have an outsized impact, says Meisha-ann Martin, senior director of people analytics and research at Workhuman.
She defines employee recognition as acknowledging and showing genuine appreciation for who an employee is and what they do. “If it’s done well, you should feel like that organization or that person sees and appreciates your unique capabilities. Like, ‘My special sauce belongs here,’” says Martin.
Recognition is more than offering a thank you, and it can be a huge motivator because it’s linked to engagement and, subsequently, discretionary effort, Martin says. “You actually give more of yourself.”
She offers three tips to create a culture that values recognition. First, amplify it widely. Recognizing a person’s efforts is effective whether it’s done in public or private, but “when people perceive recognition happening around them, it activates what we call the ‘witnessing effect,’ and it enhances the impact of recognition,” says Martin. This can be as simple as recognizing an employee in a workplace social feed like Slack or Microsoft Teams.
Second, advocate for formal programs for recognition and instruct leaders on how to give personalized and meaningful praise. “We find in our research that the more specific a recognition message is, the bigger the impact it has on turnover,” says Martin. “It also helps people get to good performance because it is a coaching tool. The more specific you are, the more people know what you want them to repeat.”
She recommends that HR leaders set standards on how often leaders recognize their direct reports. Ideally, a few times a quarter.
Last, pair a financial incentive with recognition. While Martin’s research finds monetary and non-monetary recognition effective, no one is mad about receiving a couple of extra dollars. “The biggest impact happens when you mix monetary and non-monetary,” she tells me. “It doesn’t always need to be monetary, but if you’re only ever doing non-monetary, we find that that has a negative impact.”
Amber Burton
amber.burton@fortune.com
@amberbburton
Reporter's Notebook
The most compelling data, quotes, and insights from the field.
On Tuesday, Fortune released its 100 Best Companies to Work For list in collaboration with Great Place to Work. Companies that topped this year's list exemplify an ability to build a culture of trust and transparency in rocky times. Here are the top five:
- Cisco Systems
- Hilton
- American Express
- Wegmans Food Markets
- Accenture
Around the Table
A round-up of the most important HR headlines, studies, podcasts, and long-reads.
- A former Tesla employee won $3.2 million in a lawsuit alleging the company ignored racial abuse he faced at work. New York Times
- Microsoft’s decision to pause the construction of its new Atlanta offices affects an entire community. Wired
- U.S. job openings fell to 9.9 million in February, the lowest since May 2021. ABC News
- Community colleges are facing a reckoning as more employers cool on their ability to prepare graduates for the workforce. AP
- Hundreds of Google employees in London staged a walkout Tuesday to protest recent layoffs. Reuters
Watercooler
Everything you need to know from Fortune.
Layoff averted. General Motors avoided layoffs after 5,000 employees took buyouts, saving the company about $1 billion in costs. —Tom Krisher
Layoff (kinda) averted. Apple told some employees whose jobs were getting cut that they would need to reapply for roles at the company. Those who aren’t rehired will receive four months of severance. —Chloe Berger
Talent in a bottle. PepsiCo’s CHRO says the company treats top performers like corporate assets, with their development now the responsibility of the executive committee. —Jane Thier
I spy. Railroad operator Union Pacific allegedly hired private investigators to verify if employees’ medical claims were true, according to a lawsuit. The company has a long history of not offering its train crews paid sick days. —Josh Funk
Parenting is a marathon. Working parents are more likely to take time off when their kids are toddlers than when they’re newborns, according to a study from daycare company Vivvi. That means simply offering parental leave early on is not enough to keep working parents employed long-term. —Megan Leonhardt
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