Most entrepreneurs are good at seeing opportunities and finding ways to meet needs in the marketplace. Similarly, successful leaders are adept at creating value, managing costs, and understanding their target markets. But many leaders lose sight of the #1 asset of their business and the various ways that asset can be neglected and eventually lost. That asset? Team members.
Good employees are not easy to find, develop or keep. Anyone who has lost a key team member (especially unexpectedly) and tried to find a replacement knows this. It’s difficult to find a person with the training and experience needed to do the job and someone who has the character qualities you desire.
As a business leader, you are at risk for misunderstanding what your team members want. Many owners and managers believe their employees are motivated primarily by financial gain, power, and prestige, with the focus being on more money. Research studies for decades have debunked this belief. Sure, people want to earn more money but the vast majority of employees when they voluntarily leave a company, they don’t leave for more money. In fact, 79% report that a primary reason they leave is because they don't feel appreciated.
Many business leaders don’t believe this, so let me offer you some more compelling data. In a global study of 200,000 employees, the Boston Consulting Group found that the number 1 factor employees related to enjoying their job was that they felt appreciated (financial compensation didn’t show up until #8).
Now, you may think you are doing okay in this area – that your employees know you appreciate them. Sorry, probably not. A national Globoforce employee recognition survey across numerous companies found that 51% of managers think they do a pretty good job of recognizing employees for work well done (I actually like this statistic because it feels “real” to me – rather than “95% of managers think they are great at recognizing their team members”). But the problem is: only 17% of the employees who worked for those managers felt the manager did an adequate job of recognizing them for doing a good job. Obviously, there is a disconnect somewhere.
What we have found is that:
- Employees want to feel valued and appreciated at work.
- Most employees don’t feel appreciated.
- A majority of leaders and managers either:
a) Don’t care how their employees feel.
b) Think they are doing an adequate job of communicating appreciation.
c) Don’t know what else to do (beyond what they’ve been doing.)
How Appreciation Impacts the Financial Status of a Business
Ultimately, running a business is about serving your clients well and making a profit doing so. As a result, many leaders think, “Yea, I want people to enjoy their work, but I’m not a cheerleader, and we’ve got work to get done.” True.
But consider this. We know that when team members (regardless of their level of the organization) truly feel valued and appreciated (which is different than going through the motions of an employee recognition program), good things happen. Conversely, when staff doesn't feel valued:
- tardiness increases
- people call in “sick” more often
- productivity decreases
- policies and procedures are regularly followed
- more conflict occurs over petty issues
- people become more irritable
- customer complaints increase
- persevering to solve a problem situation declines
- managers don't do their jobs as much
- internal theft increases
- the number of on-the-job accidents reported is higher
- turnover increases (which is the #1 non-productive cost to companies)
Now, do you see the financial impact and importance of your staff feeling appreciated?
Employee Recognition Authentic Appreciation
While 85-90% of all companies have some form of employee recognition program, employee engagement and job satisfaction ratings have actually decreased. Why? Because employee recognition is effective at rewarding performance, but it does a lousy job of helping employees feel valued as individuals. Most employee recognition programs are designed in a way that they are generic (everyone gets the same certificate and gift card), group-based (a lot of introverts hate going up in front a group), focus solely on high performers (leaving out the majority of employees), and are viewed an inauthentic (“It’s accounting’s turn to get the award this month”).
A key concept to understand is that not everyone feels appreciated in the same ways. Not everyone values a verbal compliment. From our work with over 100,000 employees who have taken our Motivating By Appreciation Inventory, less than 50% choose words of affirmation as their primary appreciation language. Some people feel valued when you spend some individual time with them. Others appreciate working together on tasks or getting some practical help. In fact, we’ve identified five languages of appreciation important in the workplace.
Keys for Communicating Authentic Appreciation
In working with employees from thousands of companies and organizations across the world, we’ve found four key factors necessary for employees to truly feel valued. Our published research that shows when groups apply the concept of authentic appreciation, team members report a significant increase in feeling more appreciated.
Employees will feel truly valued when appreciation is:
- Communicated regularly (not just once or twice a year at a performance review);
- Shared in the language and actions most important to the recipient (not what makes you feel appreciated);
- Delivered individually and personally (not as a group “blast email” and not through your administrative assistant);
- Perceived as authentic (not just “going through the motions”)
Your employees are your organization’s most valuable asset (try accomplishing the tasks at hand with them!) Increasingly, finding quality team members has become a limiting factor to growing businesses. To be a successful leader of a growing company, you need to make sure you know how to communicate appreciation in the ways that are meaningful to each of them. If you don’t, they won’t perform as well, and you will eventually lose key team members. That is a business headache you don’t want -- and that you can avoid.
Dr. Paul White is an author, speaker, and psychologist who “makes work relationships work." He is a coauthor of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman and his book, The Vibrant Workplace, released in April 2017.