Appreciation is one of the most powerful, but misunderstood, misused and untapped energies available to us at work.
We’re used to thinking of appreciation as just another word for gratitude, or as an expression of thanks for a job well done, a service performed, or an unexpected kindness.
In the business world, appreciation is most often given as an after the fact acknowledgement and is regularly given well after an event has taken place. e.g., Employee of the month. This reduces the impact of the feedback and lessens the potential results.
Appreciation, given regularly, sincerely, appropriately, and most importantly, as close as possible to the time of the behaviour observed can positively impact a business in three ways – return on equity, return on assets and improved operating margin.
Recent research has shown that appreciation in the form of employee recognition, has a direct and unmistakable impact on a businesses profitability, as positive feedback leads to improved passion in the workplace, resulting in discretionary effort, improved customer experience and higher productivity.
Return on equity is a critical measure that encompasses profitability, asset management and financial leverage. According to studies, companies that effectively recognise excellence and encourage positive feedback enjoy a return on equity more than 3 times higher than companies that do not place importance on positive feedback and appreciation.
Return on assets is a measure of a firm’s effectiveness using the assets at hand to generate earnings. According to the data, companies that effectively recognise employee contribution also enjoy a return on assets more than 3 times higher than their competitors who do not place importance on positive feedback.
Operating margin is another way to measure a company’s efficiency. In general, businesses with higher operating margins tend to have lower costs and better gross margins. The highest performing companies reported operating margin above 6.6% compared to 1.1% or less for those in the lowest quartile.
The researchers concluded their study with the following comment.
“Companies that effectively recognise excellence, and give positive feedback in a timely manner, enjoy a return that is often triple the return of companies that don’t.”
As the job market is expected to tighten in 2022, with many skills shortages, what is your plan to ensure you retain and attract top talent?
If employee recognition, positive feedback and igniting the passion in your employees by developing a Culture of Appreciation is NOT a high priority you are going to struggle in the forthcoming skills war.