How to Sell Employee Recognition to Your Leadership Team

Do you believe employee recognition is given out fairly and frequently at your company? How you answer depends a lot on your job title.

Research we conducted with SurveyMonkey in 2019 found that 89% of executive-level leaders believed recognition was doled out fairly at their companies, whereas only 62% of people in intermediate positions believed that to be true.

Fortunately, if you believe your organization could and should do a better job of recognizing people for their contributions, the data is on your side:

• Josh Bersin’s seminal 2012 research found that the companies that rank in the top 20% for building recognition-rich cultures see 31% lower voluntary turnover rates.
• In 2016, Gallup found that people who don’t feel adequately recognized are twice as likely to quit.
• In 2022, 63% of the American workers we talked to said they feel unappreciated by their employers on a daily basis.

The big question is: what kind of data will resonate with your executives and how can you get their attention? To make a strong case, you’ll need to address your leaders’ specific values, challenges, and goals, then demonstrate with data how an employee recognition program could materially help them align with their values, tackle their challenges, and reach their goals.

Get a head start! → Download and customize the slide deck from our webinar with HR.com, “Getting the buy-in you need to launch an effective recognition employee program”

Address your leadership team’s values, challenges, and goals

CEOs and executive leaders are always navigating uncertainty, regardless of whether there’s an economic recession on the horizon.

So while members of your leadership team no doubt understand that recognition is important in an abstract sense, their priorities are operational and financial. By appealing to your leaders’ bottom line concerns, you can connect your case for recognition to problems they’re currently trying to solve. Recognition might not be on their minds, but retention, morale, and productivity probably are!

Manage the top line, which is your strategy, your people, and your products, and the bottom line will follow. –Steve Jobs

The statistics and resources we share in the following sections connect employee recognition to the most common challenges that today’s executive leaders face.

(To take a deep dive into the benefits of recognition, check out the chapter “Why is Employee Recognition Important?” from our Guide to Modern Employee Recognition.)

Employee turnover and retention

Here’s a stat you’ll definitely want to save: Companies with recognition-rich cultures have 31% less voluntary turnover than companies who don’t. What’s more, employees who don’t feel recognized are twice as likely to quit within a year.

Employee turnover costs companies a lot more than the lost productivity of one person. Depending on your industry, the time and resources needed to replace an employee can cost anywhere from 16% to 213% of an employee’s annual salary.

Use our Cost of Turnover Calculator to generate real estimates for your business

From writing and posting job descriptions to interviewing candidates, paying referral bonuses, risking burnout by increasing other employees’ workloads, and training new hires, the amount of work it takes to backfill open roles can seriously hinder your company from achieving its revenue goals. And that’s all without accounting for the hidden costs of turnover, like the hit to team morale that comes after teams lose beloved colleagues.

In 2021, 88% of Bonusly admins reported that employee morale improved after they introduced Bonusly to their organizations and 48% of admins said that Bonusly improved retention. (Check out the 2021 Bonusly user survey results in full on our product blog.)

Employee engagement

The benefits of employee engagement include greater productivity, financial performance, customer experience, and employee retention. (Fascinating, right? It’s almost as if these things are all related. 😏)

Engaged employees are enthusiastic about their work and, in turn, they’re more productive, willing to work hard to achieve the company’s goals, and likely to stick around.

Recognition is so closely tied to employee engagement that when recognition increases, employee engagement follows suit. Our product data supports this: 93% of Bonusly admins saw improved employee engagement after they started using Bonusly! An effective employee recognition program can simultaneously boost employee engagement and help HR and managers identify underlying issues like siloed teams, low morale, and performance plateaus.

Get in touch with one of our employee recognition experts to request a customized cost of disengagement report for your company.

Company culture and company values

Remember that stat we shared earlier about how companies with recognition-rich cultures have 31% less voluntary turnover? A recognition-rich culture typically stems from a company’s core values, guiding beliefs that help employees understand what’s expected of them and how they should make decisions in order to be successful in their roles and at the company.

Employee recognition and rewards programs create a unique opportunity for leaders and managers to visibly and frequently promote your company’s values and highlight how individuals and teams are contributing to your company’s objectives. (This is especially true if your company values are incorporated into your performance management practices.)

With Bonusly, for example, you can add your core values as default hashtags to the product so that people can tag specific values in the recognition they give to their colleagues. When everyone in your organization can see tangible examples of how people embody your core values on a regular basis, that information can really enrich your culture.

"Company values matter because employees face tough decisions every day,” remarks Victoria Melcher, the manager of culture and engagement at BigCommerce. “The right way isn’t always the easy way, and you want employees to do what’s right for your organization every time. With Bonusly, we're able to reinforce those values and have employees champion what it means to be a part of BigCommerce.

“Among the recognition tools we explored, Bonusly became a top choice because it's globally scalable, which was especially important to our company leadership due to our rapid growth and distributed teams,” Victoria says. Read BigCommerce’s Bonusly story for more inspiration!

Answer frequently asked questions

In this section, you’ll find some of the most common questions that senior leadership will have regarding employee recognition. We’re old pros at answering these queries, so here’s the hard data and key insights you need to know:

Q: “Do employees really want praise rather than money?”

In a BambooHR study, nearly one-third of employees reported they would rather be recognized for their work accomplishments in a company-wide email from a company executive than receive a monetary bonus of $500 that isn’t openly publicized by a superior to their coworkers.

In Bonusly’s own research about how people prefer to be appreciated at work, 33% of respondents preferred to be appreciated primarily by receiving gifts. However, only 17% of respondents chose giving gifts as their preferred way to show appreciation.

Modern recognition programs that empower employees to choose the rewards that are personally meaningful to them leave the power of appreciation to come from thoughtful words emphasizing the intrinsic value of their performance.

This isn't specific to millennials, either. The more employees are recognized, the more satisfied they are with their jobs—even the difference between weekly and daily recognition increases the number of satisfied employees from 85% to 94%.

Of course, quality plays a big part in whether recognition is effective. Empty praise and meaningless trinkets can do more damage than nothing at all.

Values-based recognition programs are also more effective. Beyond acknowledging how employees exemplify corporate values and signaling to others how that looks, rewards like days off and donations reinforce employee value propositions (EVPs) that include work-life balance, community, and social responsibility.

Q: “Does employee recognition make a difference to the bottom line?”

For skeptical executives, return on investment must be proven for immediate and long-term benefit to the organization. We’ve split this section up into three sections, revenue, costs, and investment, to best address each concern.

1. Revenue

Organizations in the 99th percentile of employee engagement have four times the success rate as those in the first percentile.

Recognition satisfies the human needs of approval, esteem, and affiliation, which triggers the norm of reciprocity for people to give back to their supportive employers. “Employees who are engaged consistently show up to work and have a greater commitment to quality and safety” Gallup reports. For instance, traffic patrol officers make more DUI arrests and steel company staff make more creative suggestions for improving operations when perceived organizational support is high.

A 2017 study of nine organizations confirmed that increased recognition leads employees towards desired behaviors, including:

• Conscientiousness in performing job tasks
• Amelioration efforts to improve job tasks
• Collaboration to maximize group efficiency
• Personal initiative to improve group efficiency
• Involvement at the organizational level

2. Cost

Only three in ten employees feel they’ve received recognition in the past seven days. Increasing that ratio to six in ten employees could reduce absenteeism by 27%, reduce shrinkage by 10%, and raise work quality by 24%.

It bears repeating: turnover can cost you twice the salary of each employee who leaves. 😱 A recognition and rewards program could cost you significantly less than that.

3. Investment

HR usually administers recognition programs, while the budget can be department-specific, centralized, or both. Bersin by Deloitte reported spending was closer to 1% in 2012.

While there are more intensive options, these programs don’t have to be cumbersome. By making a positive upfront investment in employees, you can reassert your values and priorities.

Q: “Don’t we already recognize employees?”

Only 42% of employees are aware of their employer’s recognition program and additionally, only 24% of employees are satisfied with management’s recognition of job performance.

This may have something to do with the fact that years of service awards remain the most common kind of recognition program. Tenure-based recognition alone is unlikely to impact employee engagement or retention. If these programs don’t improve business performance, they can generate distrust in the value of recognition. 

Other unintentional barriers include: unclear criteria; limited capabilities to distribute rewards fairly; and, time-consuming forms and approvals process. Senior leaders assume their employees are recognized more than once annually, but 70% of employees report that they receive recognition once a year or not at all.

There's a lot of room for improvement.

It is not enough to implement any recognition program—programs should also align with the values and needs of the organization. Additionally, programs should help you provide effective employee recognition. By reallocating money you're already spending on turnover and ineffective recognition programs, you can build a budget for effective recognition.

Next steps

You'll be building your own recognition program in no time! Here are some key facts to take to your next C-suite meeting to really drive home that your company needs a recognition program:

• 76% of employees are unsatisfied with recognition of job performance
• Employees who feel valued are more present, productive, and innovative
• Employee recognition and reward program administration and costs are not as much as you may think. For the record, most Bonusly admins spend only two hours a month managing the program.

If you're considering a few employee recognition software options, use our handy evaluation scorecard to compare different vendors:

What's keeping you from implementing a recognition program? Our employee recognition experts have helped more than 3,000 people like you make the case to their leadership teams — get in touch, we’re here to help!