Many businesses recognise the need for better employee engagement, but when it comes to allocating time, resources and investment into programs, there is always someone asking “What is the ROI?”.
When faced with a list of costs associated with improving employee satisfaction, some businesses may wonder if simply awarding pay rises as reward might be easier and just as effective.
Author, psychologist and happiness guru Shawn Achor has conducted research that reveals the correlation between pay and job satisfaction is low. Instead, businesses should focus on how to build recognition and motivation to improve business results and employee engagement.
The impact of digital social recognition
In a fascinating blog for the Harvard Business review, Achor highlights the current research into the impact of digital social recognition programs to improve happiness amongst employees. His finding suggest that:
“Effective digital recognition programs can help scale organic praise, have a high ROI, and lead to significantly higher levels of employee performance and engagement, as well as increased customer loyalty.”
In addition, Achor recognised that such programs need to be scalable and able to actively raise happiness levels, not just send more information, more quickly, which in turn creates more stress. Digital platforms are not about speedy delivery of more information, but timely delivery of recognition and ‘virtual’ reward.
Reward, recognition and choice
Achor gives the example of airline JetBlue. Employees can nominate co-workers for everyday excellence as well as stand-out achievements. This feedback is shared through an intranet, and recipients of recognition earn points. The key is that they can spend these points as they wish, either for ‘instant’ rewards such as dinners or save them for bigger, better rewards, such as cruises. Engagement and participation is increased because recipients can choose how they are rewarded. Recognition is more valued from peers as it is not part of a formal review structure.
Here’s the bottom line figures:
“For every 10% increase in people reporting being recognized, JetBlue saw a 3% increase in retention and a 2% increase in engagement.”
For those looking for ROI, retention is important. Constant recruitment of replacement staff is time-consuming, expensive and potentially demoralising. Most interestingly, engaged employees better served the JetBlue customers, so that they enjoyed their experience more. This lead to increased customer loyalty, important for a budget airline in a highly competitive marketplace.
Effective recognition: financial, social or both?
Achor also compared the impact of wage rises and social recognition in terms of and cost. Whilst a recognition program could create only half the engagement boost compared to a salary increase, it also cost 95% less. Factor in the diminishing impact of the pay rise as the new salary becomes ‘the norm’, and digital engagement solutions become not only financially viable but a long-term necessity to maintain and increase engagement over a sustained period of time.
Glass half full or half empty?
Achor also presented a TED talk viewed by almost 13million people online, describing “the happy secret to better work”. Again, this focuses on the ability of happiness to affect business success:
“75% of job successes are predicted by your optimism levels, your social support and your ability to see stress as a challenge instead of as a threat.”
Positive recognition plays an invaluable role in ensuring an optimistic tone within the workplace. Note the phrase “social support’. By building a virtual community and empowering members to offer peer to peer recognition and rewards, a business can offer a far wider social support network, free from physical boundaries and time zone constraints.
Positivity for profits
Again, trying to persuade business leaders to invest in what might be termed a ‘happiness program’ might seem an uphill struggle. However, Achor and his team unearthed some astounding figures for the effects of positivity:
“Your brain at positive performs significantly better than at negative, neutral or stressed. Your intelligence rises, your creativity rises, your energy levels rise. In fact, we've found that every single business outcome improves. Your brain at positive is 31% more productive than your brain at negative, neutral or stressed. You're 37% better at sales. Doctors are 19 percent faster, more accurate at coming up with the correct diagnosis when positive instead of negative, neutral or stressed.”
The really good news that’ll definitely make both the CEO and the account department happy is that an employee network solution can become a channel for delivering both business information and promoting happiness/engagement. As Achor says:
“Technology may also be one of the keys to connecting us back together — creating the type of effective, organic and peer-based praise people need and deserve as they endeavour to lead their teams to greater success.”
Peer-based praise solutions
By combining the functions of effective employee communication and an engagement programme, your business can place the tools needed for establishing peer-based praise at the heart of your business.
By not prescribing what rewards such peer recognition might bring, but allowing employees to choose instead, you can increase the level of involvement and, dare we say, enjoyment of being part of the network.
By increasing levels of engagement for employees, you can improve the experience of customers and clients, creating a loyal customer base that buys more and complains less.
Because I’m happy…
If your business is struggling to communicate with itself, or your information flow is one-way from top to bottom, call us. Talkfreely creates bespoke employee networks that allow everyone on your business to communicate, offer help, support and praise, and enjoy the process. We’re not saying that a Talkfreely employee network will make your employees happy overnight, but it’ll be a great way to start building the positivity and enthusiasm that’ll drive your business forward now and in the future.