How tech can ‘democratize’ employee rewards and recognition

In terms of corporate success, the value of a company extends far beyond its financial indicators. Gallup reports that 84% of an S&P 500 organization’s worth is tied to its employees’ talents, skills, knowledge, work ethic and health. Unfortunately, only two in 10 U.S. workers strongly feel connected to their company’s culture, according to Gallup. This means that much of that value is at risk of leaving the company if employees become disengaged.

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However, experts from Sapient Insights Group say there are ways HR can navigate around disengagement, particularly through technology designed to recognize employees positively. A tech-fueled recognition strategy, they say, can incentivize behaviors aligned with organizational culture and key performance indicators.

Fiscal impact of employee recognition

Recognition nurtures a strong company culture and translates into tangible bottom-line benefits. Hannah Yardley, chief people and culture officer at recognition platform Achievers, advocates for the business case of recognition. “Anyone understands the problem of being disconnected,” she says.

Gallup and Workhuman’s collaborative report, From Praise to Profits, confirms a connection between acknowledgment and productivity. If a typical organization, according to the report, were to double the number of employees who strongly feel they’ve been recognized for good work, the org could experience a 9% boost in productivity. For an employee with an average workforce of 10,000 people, this increased productivity would translate to a $91,989,474 rise in overall employee output.

Technology that facilitates workplace recognition has become more prevalent. Sapient Insights Group’s 2023-2024 HR Systems Survey of HR and IT staff at over 2,300 organizations reveals that “rewards and recognition,” a new category to the report this year, has been adopted by 42% of companies.

Nearly one-third of the companies surveyed by Sapient plan to increase spending on rewards and recognition tech in 2024—this includes those that have already adopted the tech as well as those that haven’t yet but plan to.

Cultural impact of employee recognition

Gallup and Workhuman research found that employees who confirm they’ve been highly acknowledged are 20 times more likely to be engaged compared to those who have not. What do employees feel when they’ve been sufficiently recognized at work?

Hannah Yardley, Achievers
Hannah Yardley, Achievers

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Gallup and Workhuman identify five essential pillars of strategic recognition—acts that are fulfilling, authentic, personalized, equitable and embedded in company culture. Yardley says that Achievers uses a similar five-point framework to determine belonging, which arises when an employee feels welcomed, known, included, supported and connected.

McKinsey’s research reveals that an uncaring or uninspiring manager is a key factor when employees decide to leave their jobs. With managers accounting for at least 70% of the variance in employee engagement scores, according to data from Gallup, recognition technology becomes a crucial equalizer.

How tech ‘democratizes’ rewards

Leadership inconsistency means that organizations can’t simply count on managers to show appreciation to their staff. Yardley says that tech can “democratize” this process, take pressure off managers, involve more people and increase activity in the recognition process. This can be done with systems that allow for peer-to-peer appreciation, real-time feedback, points-based rewards, and personalized newsfeeds and dashboards for employees.

“Technology also tracks data in important ways,” says Yardley. Digital platforms measure which employees are getting recognized, which gives leaders a tool to promote inclusion and provides guardrails against discrimination.

Yardley also says that recognition tech can make a dent in underperformance by highlighting employees who express desired behaviors or develop appropriate skills—a tech-driven form of positive reinforcement.

While many people fear that technology is a threat to connectivity, Yardley has seen that the opposite can be true. Organizations that invest in recognition platforms that connect people digitally can provide a satisfying employee experience.

Yardley says that belonging is “emotive” when it comes to employee experience, but it delivers improved retention and “real, hard dollars.” The research is out there to prove that, but Yardley adds that people sense something even more powerful when they realize their organization has invested in validation technology: “Employees become connected because they feel relationships bring them [to work].”

Jill Barth
Jill Barth is HR Tech Editor of Human Resource Executive. She is an award-winning journalist with bylines in Forbes, USA Today and other international publications. With a background in communications, media, B2B ecommerce and the workplace, she also served as a consultant with Gallagher Benefit Services for nearly a decade. Reach out at [email protected].