Employee appreciation

Employee appreciation: This is how recognition works

In most companies, employee appreciation is a familiar buzzword. And in theory, it’s been high on the agenda of HR and managers for years.

In the study conducted by the Rochus Mummert Group back in 2016, 97% of the HR managers answered “yes” or “rather yes” to the survey question: “Do you believe that companies with a clear normative attitude towards appreciation are the more successful companies?” For 72% of the respondents, appreciation was, at least partially, a component of the company's guiding culture (Schlipat & Martin, 2018).

And yet, an EY job study (2019) shows that only 60% of employees feel sufficiently valued at work. So, it's clear that theory and practice do not necessarily align.

When facing the reality of hectic day-to-day business, managers lose “soft skills” such as leadership – usually at the long-term detriment of employees and employers. Do you want to do things differently, have enthusiastic and high-performing employees, create more loyalty and a good corporate culture?

It's not rocket science – but you need to keep some important concepts in mind. Read on to find out what employee appreciation is, how to foster it, and how to implement a culture of appreciation in your organisation.

Why the hype about employee appreciation?

In recent years, the balance of power between employees and employers spun 180 degrees. Not only are there too few university graduates in high-growth industries such as IT and technology, but thanks to an increasingly globalised labour market, there’s also a wider range of attractive jobs to choose from (Busold, 2019).

Consequently, in this “War for Talents” (Busold, 2019), companies fight daily for qualified employees. They recruit and poach wherever they can. However, to avoid losing qualified workers, companies need to strengthen their approach to employee retention measures.

What’s one of the best guarantors of employee retention? Employee appreciation. For example, the Rochus Mummert study mentioned earlier showed that 3 out of 4 employees in Germany still feel good about their job a year after they were hired. When mutual appreciation is part of the company's values and norms, the satisfaction rate rises to over 90%.

Advantages of employee appreciation

As mentioned earlier, the currently high fluctuation and willingness for change are causing companies to invest additional resources to find ways to retain qualified employees. Regular and authentic employee appreciation is an extremely effective approach. That alone should be enough to make you take a closer look at the concept of employee appreciation. And there are numerous benefits that come with this concept. Here are some of them.

Increased emotional connection

Convincing employees to stay is all well and good. But it's not just the physical presence that's important. It's, above all, about the emotional connection and long-term loyalty of employees. Countless studies show how much emotional attachment of employees matters to companies. For example, the 2019 Gallup Engagement Index in Germany (Wolter, 2019) found that when there's a high level of emotional attachment, mistakes linked to quality or performance deficiencies drop by 40%. However, at the same time, only an average of 15 out of 100 employees have a high level of emotional attachment to their company. So, there’s definitely room for improvement!

Engagement & productivity rise

Appreciation promotes our need for self-fulfilment at work. When we’re recognised as an important part of the company, we’re able to better identify with the company and have a stronger sense of self-worth overall.

As a result, valued employees are more motivated to tackle difficult tasks. When managers recognise commitment and job performance, it creates a positive cycle of appreciation and increased motivation to perform. Surveys by SHRM (Society for Human Resource Management) even show that 78% of employees are more productive when they receive recognition. Companies that rely heavily on high levels of initiative and innovation from their employees should have a strong focus on an appreciative culture (Qualtrics).

“Companies that rely heavily on high levels of initiative and innovation from their employees should have a strong focus on an appreciative culture.” (Qualtrics)

Happier and healthier employees

This benefit is as obvious as it’s important! Employee appreciation leads to relaxed employees, lowers the risk of depression, and leads to an overall greater sense of well-being. The feeling of appreciation releases a multitude of “good” hormones such as dopamine and oxytocin that lead to a much higher sense of well-being and increased performance (Weber).

The Gallup Engagement Index in Germany (2019) provides concrete figures on this: According to the study, a normative appreciation of employees in the company leads to 70% fewer work accidents and 41% less absenteeism.

More referrals

You may already know who your most effective recruiters are. If not, you have one more reason to be happy about your employees. Even casual employee referrals are extremely valuable because of their natural authenticity and can lead to an influx of quality applications. You, on the other hand, can run your mouth off about great values, benefits, and career opportunities, however, you still won't achieve half as much of an impression.

What does this have to do with employee appreciation? The Robert Mummert Group (2016) was able to show that workplace recognition positively correlates with employee referral rates. In other words, the more employees feel valued, the more likely they’ll recommend the company as an employer. We can attest: this is a great side effect of employee appreciation!

What does employee appreciation (not) mean?

Of course, in order to reap the benefits mentioned above, appreciation must be implemented “correctly”. Fortunately, most companies are aware that a “thank you” swiftly blurted out next to the coffee machine isn't enough when we speak of employee appreciation.

And yet, implementation is often hindered by a lack of understanding of what “appreciation” – this essential word – actually means. Many companies that (would like to) show appreciation exclusively think in terms of monetary rewards for services rendered. But employee appreciation isn't about bonuses or performance praise!

Genuine appreciation – i.e. appreciation that brings the previously mentioned benefits – is about recognising and valuing employees as individuals, who are valuable because of their competencies, but also because of their soft skills and uniqueness (May, 2021).

So, you should show appreciation to Susanne because she managed to automate many work processes in the company, thanks to her projects. But, you should also talk to Heiko, because he’s been with the company for more than 10 years, and always creates a great working atmosphere in his department with his loyalty and sunny personality.

Attention! Employee appreciation isn’t a cheap substitute for good pay and material benefits! These aspects are still important and a given for qualified employees in the current job market. In other words: our experience shows that, if the pay isn’t right, it's a hopeless case. No amount of employee appreciation will help. But, to really stand out, inspire and retain qualified professionals, you need both.

“Genuine appreciation – i.e. appreciation that brings the previously mentioned benefits – is about recognising and valuing employees as individuals who are valuable because of their competencies, but also because of their soft skills and uniqueness.” (May, 2021)

Show appreciation: how, when, and what?

Ok, now you have a first impression of employee appreciation. Now, it's time to get down to business. Here’s how and when you can best show appreciation and what's most important to employees.

The right time to show appreciation to employees

First things first: as a general rule, there isn’t a bad time to show appreciation to employees. On the other hand, there are times when explicit recognition by managers is particularly important. In our experience, implementing the following tips has the greatest impact.

Immediate appreciation
A task was diligently completed, a positive way of working was noticed or the project was organised above average? Then, don't hold back with your praise! Appreciation should be expressed as soon as possible. The more this happens, the more employees trust that managers see their work, even if this isn’t communicated. Delayed appreciation can also give the impression of a lack of authenticity. Immediate appreciation is something that should be cultivated among colleagues and contributes to a great company culture as well. However, leaders should model these values.

Regular appreciation
How often does employee appreciation need to occur to truly have a lasting impact on employees’ well-being? Studies show that regular appreciation in the form of small gestures and conversations in the workplace is much more effective than infrequent large rewards or lavish recognition ceremonies held once a year (Lyubomirsky & King, 2005). The reason for this is that the positive effect wears off after a relatively short time.

This regular employee appreciation is often less performance-oriented but more about immediate recognition. It’s mainly about motivating employees during long projects or difficult tasks, and letting them know that their work and value are also seen “behind the scenes”.

Formal appreciation for employees
It's true that giving appreciation at the shortest possible time intervals is the most effective way to continually motivate employees. But less frequent formal feedback sessions are also important, for general purposes and as an expression of employee appreciation. This is where employers, managers, and team leaders can show that they really care about their employees, as individuals.

How do employees measure appreciation?

Appreciation is a very broad concept. Research has shown that employees perceive a company as appreciative when they experience respect, opportunity, and autonomy. Depending on their disposition and individual needs, each employee's focus is on one of these “pragmatic action areas ”(Döring-Katerkamp & Rohrmeier, 2016), which shows how personal and subjective the perception of appreciation is. Below is a brief explanation of these factors of employee appreciation.

Respect
For many employees, respect means being taken seriously. In a respectful environment, one's own views, questions and problems can be raised at any time and without fear. Dealing with employees in a respectful and thus appreciative manner also includes the joint discussion of goals. Setting goals without the concerned person shows little trust and appreciation.

Opportunities
We all have the urge for self-fulfilment at work. So, wherever possible, give your employees the chance and space to blow off steam and develop their skills in their areas of interest – whether that's in the form of training, or with the confidence that they'll tackle new challenges without micromanaging them, or by giving time for self-study. In the long run, your company will reap the benefits!

Autonomy
Autonomy is an important driver of satisfaction and commitment. Employees value it enormously when they can do their work independently. If you’re lucky enough to have employees with drive and who express initiatives, you should also offer them an open ear for new ideas and support them when they have good ideas.

As a side note: since we all prefer different forms of appreciation, it's important for managers to get to know their employees. Who’s an extrovert, who likes being patted on the back in a social setting, and who prefers an intimate one-on-one conversation? To find this out, it's worth going on company outings, taking lunch breaks together, and doing things outside of work.

How should one show appreciation?

The most important thing is to express appreciation to employees. However, beyond that, there are a few things you should look for when communicating appreciation to your employees. Authenticity is a powerful factor. If the appreciation isn’t authentic, it’ll be perceived as false and won't be effective. Authentic employee appreciation is individual, precise, and emotional (May, 2021).

“Authentic employee appreciation is individual, precise, and emotional” (May, 2021)

Individual
We’ve already talked about how subjective the perception of appreciation can be. A quick toast at the Christmas party with a “thanks to everyone for a great job” is nice and reinforces a sense of community. However, it doesn’t fulfill the need for individual appreciation.

So, it's best to ensure that your words and gestures make your employee feel that “this appreciation is clearly directed at me personally.”

Precise
Employees, especially those who have low self-esteem, like to see appreciation as a “kind gesture” that makes their supervisor more likeable, but employees often can’t comprehend their recognition. Specific situations and examples can reinforce the appreciations’ power and make them more believable. This way, the employee's appreciation can really have the intended and lasting impact. When the appreciation isn’t immediate – formally shared during a feedback session – this is particularly important.

Emotional
Emotional doesn’t mean that you have to fall into each other's arms. However, the appreciation should come from the heart, and you should privilege using informal wording. It’s also important that the appreciation is genuine and not perceived as a pat on the back. Does the person’s pool of ideas make them irreplaceable? Then, just say so.

This is what appreciation can look like

Here are a few concrete tips on what effective appreciation can look like in everyday work (May, 2021):

• Small gestures like a smile, a nod, a pat on the back, or a curious question are a good start. Hence, using these small gestures of appreciation towards your colleagues really shouldn’t make you break a sweat.

• Thankfulness. Just because “please” and “thank you” aren’t enough to create an appreciative company culture doesn’t mean they aren’t necessary. Leaders should ensure that “please” and “thank you” are a given.

• Sayings like “my door is always open” are of little use if there’s no time for conversation. Of course, everyone can understand that managers don’t sit around twiddling their thumbs all day. That wouldn’t be a good image either. However, we believe that giving one’s time to employees should be a priority.

• Asking for advice is surely one of the highest forms of appreciation. This is where it becomes clear to even the most insecure employees: this isn’t a banality; I’m actually appreciated! As an example, managers who shy away from asking their employees for advice because they see it as a sign of weakness aren’t doing themselves any favours.

• Another great expression of appreciation is the early on, unsolicited, identification of needs or difficulties. “I’ve noticed that, at the moment, you’re very busy with the projects and I thank you for your valuable attention and management of them. We’ll try to find support as soon as possible”. With a few simple sentences, you can show that you’re attentive and appreciate the employees’ value and assess their needs, even if they don’t complain. Not every need has a direct solution. However, the main takeaway is being attentive and showing appreciation to your employees.

Structural measures

So far, the focus has been on appreciating individual employees and their performance. However, in addition to individual employee appreciation, there’s another important level of action: structural measures (Doering-Katerkamp & Rohrmeier, 2016). These include all the measures that have a blanket effect on employees, such as:

• Training managers: it obviously won’t be enough if only one manager or one employee of the company reads this article and deals more intensively with the topic of employee appreciation. All leaders, group leaders, and managers should be trained on this topic. Of course, it’s best not to limit the training to the management level. And, one shouldn’t forget that regular appreciation among team members is also important for the company culture.

• Compensation and general benefits: as described above, these measures remain an important part of employee appreciation. Today, qualified employees often see adequate compensation and benefits as a given.

• Measures surrounding gender and diversity: the right mix of different personalities and ways of working provide nurturing grounds for a corporate culture in which individuals are seen and valued for their differences.

• Having a say: it’s important to hold regular team meetings, and have an (authentic!) “open door policy”. Open feedback tools are also good approaches to ensure that all voices can be heard.

Conclusion

Employee appreciation has rightly become an important buzzword for companies. Today, it’s considered as an extremely effective way to retain employees, increase productivity and maintain employee satisfaction. However, it’s a prerequisite. It’s not about simply recognising and rewarding specific achievements, but it’s also about appreciating employees as individuals.

It’s also important to note that people differ in their perception of employee appreciation. For some employees, the focus is on respectful communication, while others feel valued when they’re allowed to implement their own ideas.

Do you know if and when employees in your company feel valued and what form of appreciation they prefer? If you are unsure, or if you want to embed appreciation even more firmly in your company, conducting employee surveys and individual feedback sessions with your employees and colleagues are worth it! Does this seem like a good idea? Our Pulse digital survey tool enables and encourages open feedback, on a team and personal level. It's a great platform for employee appreciation – give it a try!

Sources

Busold, M. (2019). War for Talents – Erfolgsfaktoren im Kampf um die Besten.
Döring-Katerkamp, U. & Rohrmeier, D. (2016). Wertschätzungs-Index Deutschland.
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EY Jobstudie (2019). Motivation, Zufriedenheit und Work-Life-Balance.
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Mai, J. (2021). Wertschätzung : Mehr als Belohnung und Lob. In: Karrierebibel.
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Lyubomirsky, S. & King, L. (2005). The Benefits of Frequent Positive Affect: Does Happiness Lead to Success ? In: Psychological Bulletin.
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Qualtrics. Wertschätzung der Mitarbeiter: Definition, Formen, Dos & Don’ts.
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Rochus Mummert (2016). Studie: Gelebte Wertschätzungskultur erhöht signifikant die Zufriedenheit bei neuen Mitarbeitern.
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Wolter, U. (2019). Gallup Engagement Index 2019: Jeder sechste Mitarbeiter hat innerlich gekündigt.
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