A Job Well Done

Recognizing employees makes them stay longer

Human Resources Information Administrator Sue Slaughter–Nichols believes a big reason why Oregon–based Northwest Community Credit Union has such low turnover is because of how the company treats its employees.

“We treat them the same way they’re being asked to treat their credit union members,” she said. “And it’s a higher level than they get in the outside world.”

Many in the HR industry feel the same as Slaughter–Nichols, believing that the key to retaining employees is to treat them well. Employees not only want adequate pay and benefits, they want to feel that the work they’re doing will lead to respect, recognition and reward.

Retention is the name of the game

A recurring theme in HR circles today is how the growing global economy is making the workforce more competitive and how it’s increasingly difficult to attract and retain quality workers. As a result, companies are focusing more on developing their workforces from within and making sure they’re retaining their best performers.

Attracting quality workers requires competitive pay and benefits, as well as opportunities for growth and advancement. However, it also requires insight into what each candidate truly wants out of their job and the flexibility to be able to provide it—in total compensation, opportunity, work–life balance, et cetera.

Retaining employees requires the same combination of pay, benefits, growth, et cetera—as well as an effort towards ensuring that employees are satisfied in other ways. Employees want to feel respected, that they have every opportunity to advance within the company, and that they’re being rewarded when they do well.

Recognition equals retention

According to Adrian Gostick and Chester Elton, authors of The Carrot Principle, a best–selling book on how managers can better engage, retain and motivate their workers, 79 percent of employees who leave their jobs do so because they don’t feel appreciated.

In a 10–year study of 200,000 managers and employees, Gostick and Elton found that managers who use recognition effectively have lower turnover rates, have better business results and are seen as stronger leaders in the authors’ “Basic Four” areas of leadership–goal–setting, communication, trust and accountability.

Of employees polled who were happiest at their jobs, 94.4 percent said their managers effectively recognized good work. Of employees with low morale, 56 percent said their managers failed to recognize their contributions. Only 2.4 percent of those with low morale said their managers were “great” at recognition.

A culture of recognition

With literally hundreds or even thousands of ideas floating around on how to recognize and reward employees, how companies do this is up to them. Some companies choose formal recognition and reward programs, informal recognition and reward programs or a combination of both.

Regardless of how companies go about it, many in the HR industry feel it’s important to have a general culture of recognition for successful retention.

For Slaughter–Nichols and Northwest Community Credit Union, this means applying the philosophy of the credit union—treating people as they would like to be treated—to the whole of the company. The result is that, of the company’s 260 employees, over half has five or more years experience, about one–third has 10 or more years and about one–fifth has 20 or more years.

“With our culture being that of a credit union, it’s trained into us to give a high level of service,” said Slaughter–Nichols. “Even in our back office [HR], we treat our employees as customers.”

Thoughtful, personal recognition

According to Bob Nelson, author of 1001 Ways to Reward Employees, it’s thoughtful, personal recognition for good performance that truly motivates employees to perform better. Whether it’s formal or informal rewards, Nelson proposes matching the reward to the person, matching it to the achievement and being timely and specific when giving it.

Rebecca R. Hastings of the Society for Human Resource Management (SHRM) agrees, suggesting that rewards that are personal to an employee can show that the company not only appreciates the individual but knows who they really are.

In a November 2008 article, Hastings tells of a vice president of sales for a company in San Diego who received an anniversary gift that literally “floored” him. The company gave the vice president a plaque for his ten years of service that he said he appreciated, but it was the personalized gift that left him awestruck.

— By Charlie Smith, Marketing Communications/Media Relations representative at Spectrum