Building positive relationships with customers is essential to small business success. However, many business owners forget that it is critical to do the same with their employees. Being engaged and productive is about more than getting a paycheck; your staff must feel they are contributing in meaningful ways and that you appreciate their efforts.

The Value of Recognizing Success

Sunday’s Academy Awards were a vivid reminder of how meaningful it is to be recognized for your hard work. For small business owners, handing out “Oscars” can deliver multiple benefits, including better retention, greater productivity, and increased profitability. In fact, creating a company culture that is inspiring and rewarding for your team can have a positive impact on your bottom line since culture-conscious companies typically out-earn and outperform their competition.

With the strengthening job market, more people have the confidence to look for new jobs. Studies show that around 40 percent of workers are planning to look for a new job within the next six months, and 69 percent say they are passively looking. For small businesses, high employee turnover is a financial drain due to the costs of hiring and training a new employee and slower productivity levels until the new employee gets up to speed. According to The Wall Street Journal, it can cost your small business more than twice an employee’s salary to find and train a replacement.

Retaining quality employees helps you avoid the hit to your bottom line and provides added value to your business. Loyal workers will promote your brand and sell more products and services because they care about you and have a vested interest in seeing your business succeed.

Employees who are engaged are also less likely to experience the burnout that can lead to job dissatisfaction and a falloff in productivity. One of the best ways to increase engagement is to provide feedback and recognition. According to an employee engagement survey by The Society for Human Resource Management (SHRM), 71 percent of respondents said appreciation by a direct supervisor had the most impact on employee engagement in their organization.

Show Appreciation and Reward Accomplishments

For valued employees to excel at their work and be willing to commit to an organization for the long haul, business owners need to give them good reason. Many employers overlook the importance of showing appreciation to their staff, yet appreciation ranks high on the list of qualities workers deem most important in a leader. A 2017 leadership global study by Dale Carnegie found that 87 percent of workers said it is important for bosses to show sincere appreciation for who they are and what they do.

Today’s workforce is motivated by how their companies and managers make them feel. Employees who leave their jobs often do so because they sense a lack of gratitude for their hard work. Providing praise and meaningful recognition for their achievements is one of the most impactful and effective ways to maintain a happy, productive workforce.

Money Matters

Although some studies have shown that pay ranks no higher than fifth on the list of reasons why people excel in their jobs, providing the right compensation and benefits is central to helping employees feel valued. Research pay packages for similar-sized businesses in your industry to make sure you are competitive, and be creative when it comes to your benefits and bonus structures. Some employees would rather have flexible work schedules than a higher commission. Monetary rewards, bonuses, and gifts tied to accomplishments can improve motivation and help retain staff, but it’s wise to avoid making cash the only incentive for your team to be more productive.

Identify Exceptional Achievements

One of the biggest challenges for many small business owners is keeping track of top performers and making sure the rewards you give speak to your employees’ needs. One way to accomplish this is to ask your employees. Establish a simple system for staff to provide weekly or monthly updates of their own achievements. Ask for specific numbers, examples, or emails of praise from co-workers or customers. In addition, consider setting up a method for team members to identify their co-workers’ accomplishments and establish specific criteria in advance.

You may want to designate a staff committee to take charge of this process. The group could be responsible for talking to employees about award-worthy achievements as well as the kind of rewards and recognitions that would be meaningful to them. This will let your team know you value their ideas and help ensure the success of your rewards initiative.

Creative Ways to Reward Performance

A thank-you note and recognition in the company newsletter are simple and effective ways to show employees they are vital to your success. However, there are countless creative ways to recognize staff achievements and inject positive feedback into your workplace, from comp days to lottery tickets to VIP parking. Here are a few of our favorites:

  • Post It. Sticky notes are a simple yet effective way to say thank you. Be selective and specific, saying exactly why you appreciate an employee’s achievement, and post it on their computer monitor or pin board.
  • Oscar Party. Host your own annual “Academy Awards” ceremony to honor your star performers. Consider holding it mid-year so it doesn’t compete with your company’s holiday celebrations.
  • Time Off. A bonus day off or field trip out of the office is always a popular perk. To reward employees for consistent stellar performance, consider handing out “performance hours” tokens they can redeem for a longer lunch or to take the afternoon off.
  • Shop ‘Til They Drop. Arrange for vendors to provide an exclusive on-site shopping spree for top performers. Studies show that items with a high perceived value resonate 74 percent better with employees than other types of rewards.
  • Day for Giving Back. Sometimes the best reward is to empower staff to take a day off to give back by volunteering at a community charity of their choice.
  • The Corner Office. Swap desks with your exceptional employee for a day. Even better, involve them in your day-to-day. You get the benefit of their insight while they experience first-hand what it’s like to run your business.
  • Parking Pass. Whether it’s giving up your VIP spot or covering the cost of a week of paid parking, this old-school reward is a small perk that still carries plenty of weight with employees.
  • Public Shout-Out. When an employee has a good idea, performs above and beyond, or secures a big win or account, call a company-wide meeting and invite your entire organization to give him or her a standing ovation. Recognizing team members in front of their peers can be a big morale booster and go a long way toward keeping burnout at bay.
  • Wall of Fame. Create a “wall of fame” indicating the accomplishments of each employee who has been recognized.
  • Lunch with the Boss. Give your top performers the gift of your time and attention. Take them to lunch and ask them about their lives outside of work. Showing interest in getting to know them as people lets them know you appreciate them for who they are, not just for what they do.

Show Respect in Everything You Do and Say

The positive impact of showing appreciation to your employees can vanish in an instant if you disrespect them in private or in public. Make it a practice to give frequent encouragement along with constructive feedback that focuses on ways they can improve. Modeling supportive behavior to your leadership team and employees will inspire others to follow your lead. 

Recognizing your employees’ successes creates a positive organizational culture and lets them know how much you truly appreciate their hard work. Remember that the words “thank you” can be extremely powerful, and when it comes to rewarding your team, a little can go a long way.

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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.