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SHRM 2005 Conference & Exposition

SHRM 2005 Conference & Exposition: More than Money Needed to Motivate – and Retain – Employees 

By Stephen Miller, June 2005

[From SHRM's Compensation & Benefits Forum]

SAN DIEGO—Lack of recognition and praise is the No. 1 reason employees leave an organization, noted MeChelle Callen, SPHR, director of human resource development at Wishard Health Services in Indianapolis, during a Monday session at the SHRM Annual Conference and Exposition on why “Money Doesn’t Buy Happiness—or Employee Loyalty.”

Callen cited SHRM’s Survey of Human Resource Trends, which found that 79 percent of employees listed “lack of appreciation” as one of the top reasons they would leave their job.

Why is this important? Because a growing number of employees are seeking greener pastures. In January 2005, 1.9 percent of America’s workforce quit (that’s 2.5 million employees), according to the Bureau of Labor Statistics, up from 1.6 percent a year earlier.

Despite what the movie “Jerry Maguire” (“Show me the money!”) preached, “It’s really not all about the money,” Callen stressed. When employees are asked to list what they most value about their favorite job, “money seldom makes the top three reasons,” she observed. “But feeling appreciated almost always tops the list.”

Recognition makes employees feel valued, reinforces the behaviors you want and encourages teamwork, Callen said. Providing recognition increases retention and has a direct impact on the bottom line.

As an example, Dierbergs, a supermarket chain in St. Louis, operates a program called “Extra Step” that recognizes employees who proactively meet customers’ needs. Because of “Extra Step,” turnover declined from 47 percent to 25 percent over five years, management reports.

There are many inexpensive recognition opportunities for employers, Callen noted. For example, create an off-the-shelf “toolkit” of tangible recognition items for managers, including notes, cards and gift certificates. This also allows recognition to be immediate and spontaneous.

Other forms of tangible recognition include certificates of appreciation, plaques, lunches (or even dinner banquets!), birthday cards and small tokens with personalized notes. When taking time to recognize a job well done, Callen noted, “it’s the thought that counts,” more so than the value of a gift item.

And don’t forget intangible forms of recognition, including saying “good morning,” “good night” and “thank you,” and asking employees for their ideas. If you have employees who work in the field, e-mail them cards and letters of recognition.

From the Top

Recognition also involves buy-in from top management, which should be encouraged to participate in recognition activities and to “role model the behaviors expected of leaders” within the organization. You might create a training session on recognition and retention for the leaders of the organization, Callen suggested. Also, make how managers show appreciation a part of their evaluation appraisals.

Of course, not everyone wants to be recognized in the same way, Callen said, and “not everyone is comfortable with recognition. Some don’t like a lot of fanfare,” while others respond enthusiastically to public recognition. So tailor your rewards program to meet personal needs and keep it “user-oriented,” she said.

Remember that “employees are the experts, so ask them what motivates them and how they want to be recognized. And then create recognition programs that meet those needs,” Callen said.

Peer-to-Peer, Too

“Sometimes the most effective form of recognition isn’t top-down; feeling appreciated by colleagues is also an important motivator,” Callen said. So foster a peer-to-peer recognition program by providing cards that colleagues can give one another in recognition of someone’s special efforts. At one company, employees tape fish-shaped appreciation notes from colleagues on their doors. Or you might provide a trophy that’s passed each week to a different employee by the previous week’s recipient.

In short, build recognition into the culture of your organization so that it “becomes infectious,” Callen concluded, which can be “as simple as instilling the attitude of gratitude.”

Stephen Miller is the manager of SHRM’s Compensation & Benefits Forum.

Related Reading

How to Reward Employees: You Can Count the Ways, Comp & Benefits Forum (6/05)

SHRM Survey: Reward and Incentive Programs Boost Morale, Retention—When Effectively Communicated, Comp & Benefits Forum (4/05)