Recognition from managers key to retaining employees, study shows

Managers, pay attention: 77% of employees would consider leaving their current jobs based on a lack of positive recognition for their work, according to the latest RedBalloon Reward and Recognition Survey. Just under half of all respondents (44%) rated their managers ‘very poor’, ‘poor’ or ‘satisfactory’ when it comes to delivering praise. And it’s not surprising: three quarters of employees are praised monthly, quarterly or once a year, while 11% say they receive no praise at all.

Employee engagement specialists RedBalloon for Corporate surveyed more than 4000 businesses in Australia and New Zealand about employee reward and recognition programs. The company said its findings are concerning when considered in light of a 25-year Gallup study that showed that the relationship with a manager determines the length of an employee’s stay.

“Retention is one of the biggest issues facing businesses right now and with the cost to replace someone estimated at 150% of their salary, simple maths demonstrates the return on investment of a successful reward and recognition program,” said Matt Geraghty, General Manager of RedBalloon for Corporate.

“In tough economic times, it’s your people that will get you through, and if businesses invest in and show their employees appreciation now, they’ll stay for the long term.”

Employees don’t necessarily want a tangible reward, though: 46% said they’d be happy for recognition, rather than a reward, as a way of expressing gratitude. But 50% want recognitin and a reward, such as an experience, gift voucher or time off work.

Managers are crucial to this process, it seems. Of all the respondents, 51% said they’d like acknowledgement from their direct manager, while only 14% want recognition from the CEO.

Younger employees place a higher value on recognition than their older colleagues, the report revealed, with 86% of Generation Y employees being prepared to leave an organisation that did not give enough recognition, with 77% of Generation X and 63% of Baby Boomers having the same attitude.

“The study highlighted that 42% of businesses do not have a reward and recognition program in place, which does not bode well for those who are considering leaving for lack of thanks,” Geraghty commented.

“But just as worrying are the 57% of companies providing a substandard reward and recognition experience, as employees are five times more likely to leave their organisation if their business provides a poor program.”

“We are calling this the ‘recognition retention multiplier’, and it represents a big opportunity for businesses to pull up their socks,” Geraghty said.