Don't Hold Your Applause Until the End
In the theater, great performers get applause and encouragement all through the play. The expression “show stopper” comes from Broadway when the applause for an actor literally stops the performance mid-way through.
The same thing happens in sports. When Shaq throws down a monster jam, do we nod and say, ‘He’s supposed to score?’ Of course not. As fans, we recognize that each moment of excellence on the court must be rewarded with applause (and sometimes with painted bald heads and bellies) for athletes to stay properly motivated. The same goes for excellence at work. Employees need regular recognition of their efforts for them to stay motivated.
Now, for all of you whose gut instinct has been telling you for years that employee recognition has a strong impact on the bottom line—here’s what you need to act on it: empirical evidence. New data from independent researching firm The Jackson Organization shows that from every angle, every financial metric, every way of looking at it, investing in recognizing excellence is strongly associated with the best financial performance.
What makes this research so unique is the large sample size and the variance of company profitability and engagement among participants—26,000 employees from 31 organizations participated in the survey. The result is data that is statistically unquestionable and firmly establishes the link between recognition and three important financial indicators: return on equity, return on investment, and operating margin.
Here’s just one example of what you’ll find in this survey: It turns out that companies that effectively recognize excellence —those on the right hand side of this chart— enjoy a return on equity that is more than triple the return of companies that don’t. For leaders, this dramatically illustrates a strong, but often unnoticed, link between effective recognition and profitability.
Karen Endresen, Ph.D., of The Jackson Organization, explained the findings this way: “Up until this study, the link between recognition and financial performance was largely anecdotal. Recognition was considered by some to be an emotional afterthought, while those who believed that effective recognition would drive results had no hard data to prove it. This study took recognition results from myth to reality—from the soft side of business to a proven business essential.”
