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COMPENSATION & REWARDS
Oct 15, 2014

Lack of acknowledgement eroding job satisfaction

Study finds compensation elements top list of desired types of recognition
    

By Claudine Kapel

Employees just aren’t feeling the love.

That’s the essential finding of a new study by the American Psychological Association (APA) on employee recognition.

Only about one-half of respondents (51 per cent) said they feel valued by their employer, with more than a third (36 per cent) indicating they hadn’t received any form of recognition in the last year. The survey polled 882 adults in the United States employed either full-time or part-time.

Less than one-third of respondents (31 per cent) said they receive verbal or written appreciation from their direct supervisor.

Further, only 51 per cent reported being satisfied with their employer’s employee recognition practices, while only 47 per cent felt recognition is provided fairly in their organization. Overall, 60 per cent indicated they value the recognition they receive.

Although the majority of respondents (81 per cent) reported that their employer provides some type of recognition, less than half (46 per cent) said their organization recognizes employees for individual job performance.

It’s probably not news that organizations often fall short when it comes to recognition. But the value of delivering recognition should be highlighted because of the potential benefits to the organization and employees alike.

The APA observes that employees who indicated that their organization’s recognition practices are fair, that direct supervisors provide recognition effectively, and that they value the recognition they receive also reported other positive outcomes. These included:

  • Higher levels of job satisfaction
  • A greater likelihood to work harder because of the recognition they receive
  • Stronger motivation to do their best, and
  • A greater sense of feeling valued.

In contrast, respondents who said they planned to stay with their current employer for less than a year (13 per cent) also felt less valued, had lower perceptions of fairness regarding their organization’s recognition practices and experienced lower overall job satisfaction.

When it comes to the ways that employees want to be recognized, money tops the list. The types of recognition identified as most important included:

  • Merit-based salary increases (62 per cent)
  • Fair monetary compensation (47 per cent)
  • Performance-based bonuses (43 per cent)
  • Promotions or advancement (38 per cent), and
  • Verbal or written appreciation from supervisor (28 per cent).

It’s not surprising the respondents honed in on the compensation-related choices covered by the survey. Pay increases, bonuses and opportunities for advancement are all foundational elements of a strong employment relationship. The high ranking of merit increases could potentially reflect employee discontent with the modest pay increases that organizations have been delivering in recent years.

The more traditional recognition fare scored a little lower, with respondents showing a preference for recognition that included an element of choice. Gift cards or gift certificates (27 per cent) and travel awards or paid vacations (19 per cent) scored higher in terms of value than organization logo merchandise (nine per cent) and other tangible items or merchandise (9 per cent).

Two other low-scoring items were public displays of performance or accomplishments (nine per cent) and being highlighted in print/electronic communications (eight per cent).

The research findings serve as a reminder that organizations need to think about recognition both strategically and holistically.

First and foremost, recognition is a facet of the relationship between those in people management roles and their direct reports. To that end, organizations need to build managerial capability in the arena of providing acknowledgement – which for some managers is as challenging as tackling performance issues.

In addition, organizations need a big picture perspective regarding how they recognize and reward talent. While gift cards and other types of cash and non-cash recognition can deliver value, that value will only be optimized if such practices are managed as part of a broad compensation or total rewards strategy.

Non-cash recognition will be less effective – and potentially even insulting – if employees have broader concerns that their overall pay isn’t being managed fairly, or that it isn’t market competitive.

In essence, employees are saying: Let me feel the love. But don’t forget to show me the money.

    
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