From Praise to Profits: The Business Case for Recognition at Work

Gallup and Workhuman also found that increasing recognition can significantly decrease safety incidents and absenteeism.


Workhuman and Gallup released their latest report, From Praise to Profits: The Business Case for Recognition at Workwhich reveals employee recognition is a powerful tool leaders have to drive engagement and performance. In a large-scale analysis across hundreds of organizations and thousands of teams across the globe, Gallup and Workhuman found if a business of 10,000 doubled the number of employees who receive recognition or praise for their work in the last week, they can realize a 9% increase in productivity, a 22% decrease in safety incidents and a 22% decrease in absenteeism.

Furthermore, based on Bureau of Labor Statistics (BLS) data for an organization with 10,000 workers, Gallup estimates this results in almost $92 million in gained productivity alone. The analysis also found organizations can experience $2.8 million saved due to decreased workplace safety incidents and over $3.2 million saved due to fewer unscheduled absences. Despite these results, the powerful potential of employee recognition remains an untapped resource for many organizations.

Employees that feel frequently recognized drive improvements to several interrelated and compounding business outcomes. Despite this, results can be considered within a broader context of all business outcomes and clearly have a large impact on all three facets as well as an organization’s bottom line. However, it is important to note that the results cannot be added together to create a total savings amount because safety, absenteeism and productivity influence each other.

Dollarized results for increased productivity, reduced safety incidents and reduced absenteeism are broken out by major industries. While all sectors show a positive gain, a technology company of 10,000 workers could realize $155 million from a 9% gain in productivity. Hospitals show the largest savings for a reduction of safety incidents, with almost $6 million saved with a potential reduction of 134 fewer safety incidents. For a manufacturing company with the same number of workers, results show a cost savings of $3.8 million from a reduced number of workdays missed.

“Although the science validates the practical value of recognition, very few business leaders are taking employee recognition seriously enough to see the benefits. Only two in 10 leaders say that it is a major strategic priority at their organization,” said Gallup Global Practice Leader, Ed O’Boyle.

In a prior study, Gallup and Workhuman found that a business of 10,000 employees and an already engaged workforce could save $16.1 million annually by making recognition an important part of the workplace culture. The new report builds on these findings by highlighting the positive impact recognition has on employees that stay at an organization and, subsequently, the bottom line.

“Every organization is ultimately made up of people, and what and how those people feel provides the fuel for high-performance. When employees feel valued for who they are and what they do, leaders can improve not just the lives of their people, but the livelihood of their business through greater productivity, reduced top-talent attrition, and a more engaged workforce that shows up when it matters most,” said Workhuman President, Tom Libretto.

When recognition resounds at all levels of the company, it amplifies the benefit for each employee and the organization as a whole. Every organization is ultimately made up of people. And what those people feel — about their leaders, their team members, themselves and their lives — provides the fuel for high performance.

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