The document summarizes research from multiple studies that show a strong correlation between effective employee recognition programs and positive business outcomes. The research found that frequent and meaningful recognition is linked to increased employee engagement, productivity, innovation, trust in managers, and employee tenure. Recognition was shown to motivate employees, improve relationships between managers and employees, and strengthen employees' feelings of connection to their organization. The studies demonstrated that recognition delivers tangible benefits like higher profitability, lower turnover and absenteeism, and fewer safety incidents and defects.

1. OF
THE
recognition
ROI
effective
A business case for leveraging
appreciation to drive business results.

2. Look at many of the world’s top
performing companies, and you’ll see a
commitment to people strategies.
Is appreciation nice or necessary?
Does strategic recognition deliver
business results and directly impact
the bottom line?
The question remains:

3. Third-party global research commissioned by
the O.C. Tanner Institute, featuring quantitative
and qualitative studies, proves frequent and
effective employee recognition is highly
correlated to increased engagement,
productivity, innovation, trust, and tenure.

4. This research was further validated by 2013
client data pulled from more than seven
million recognition moments, with 90%
of recognized employees reporting,
‘they felt highly motivated
to contribute to the success
of their organizations.’

5. IMPACT ON
engagement

6. In 2013, The Cicero Group conducted global quantitative and
qualitative research to understand the correlation between
effective performance recognition and engagement.
performance recognition for
great work significantly impacts
employee engagement at a rate
of more than two to one
The finding:

7. PERCENTAGE OF EMPLOYEES
WHO ARE HIGHLY ENGAGED
Highly engaged with
weak recognition
Highly engaged with
strong recognition
34%
78%

8. Employee engagement affects nine performance outcomes.
Compared with the bottom quartile, top-quartile engaged units have:
25%
lower
turnover
(in high-turnover
organizations)
65%
lower turnover
(in low-turnover
organizations)
41%
fewer quality
incidents
(defects)
48%
fewer safety
incidents
10%
higher
customer
metrics
22%
higher
profitability
34%
lower
absenteeism
21%
higher
productivity

9. In fact, when employees receive formal recognition
for going above and beyond, as well as informal
recognition for every day effort—they have...
more drive and
determination
better work
relationships
improved personal
standing
stronger connections
to their organization

10. Percentage of employees who are highly engaged in each
of these areas with strong vs. weak recognition
81%
35%
76%
28%
weak recognitionstrong recognition
89%
44%
78%
35%
Drive & Determination
Connection to the Company
Work Relationships
Know How Their Work
Makes a Difference

11. IT’S WORTH ASKING WHAT COMES FIRST:
Or does that matter?
recognition or engagement?

12. This 2013 research illustrates that recognition makes all
employees—both the unengaged and highly engaged—feel
motivated, appreciated, and satisfied at work. This in turn
increases a commitment to success, which leads to more
recognition. It’s a mutually reinforcing cycle.
recognition
feel
motivated
commit
to success

13. discouragement, disenchantment,
and the possibility of driving even
top performers away.
The same research also points out the
adverse effects of weak recognition:

14. Recognition makes me feel
valued and recognized.
It gives me pride in my
personal work and the
company as a whole.
— Focus Group Participant, Cicero Research 2013
“
“

15. INNOVATION &
productivity
What about the recognition’s impact on innovation and productivity?

16. The same research found employees who
receive strong recognition are 33% more
likely to be proactively innovating...
generating 2x as many ideas
per month compared to those
who aren’t recognized well.

17. Further, companies that provide
effective performance
recognition are more than 2x as
likely to be highly innovative.

18. When asked which benefit would do the most to encourage
innovation and efficiency, employees reported:
Recognition for
ongoing effort
5% salary
bonus
Recognition for
going above
and beyond
27%
41%
32%

19. The same research also calls out the impact strong
recognition has on both individual and team output.
Weak
Recognition
Strong
Recognition
Weak
Recognition
Strong
Recognition
40%
53%
28%
42%
Percentage of employees
working at 80% capacity
or above
Percentage of employees who
feel their immediate work team
is working at 80% of capacity
or higher

20. Recognition makes me
want to help out more.
It makes me want to work
harder and develop new
ways of doing things.
— Focus Group Participant, Cicero Research 2013
“
“

21. TRUST & MANAGER
relationships
For years we’ve heard 79% of employees leave managers not their companies.

22. Not surprisingly, the Cicero Research
reported that among those who receive
strong recognition 87% say they have a
strong relationship with their direct
managers; only 51% of those receiving
weak recognition say the same.

23. Again, when asked which benefit would most improve their
relationship with their direct manager, employees reported:
Recognition for
ongoing effort
5% salary
bonus
Recognition for
going above
and beyond
50%
28%
22%

24. Performance recognition has been proven to drive
business results such as innovation and productivity;
increase engagement helping organizations realize the
return on critical metrics; and improve trust with
managers, team members, and the company overall.
THE KEY: offer a solution that
provides a variety of ways to
appreciate everyday efforts as well as
results for going above and beyond.

25. IMPACT ON TENURE &
company
connection

26. Additional research by The Cicero Group was
conducted to specifically focus on the impact
of celebrating career achievement over time, or
years of service.
Two findings of this study were found to be
true both globally and cross-generationally:

27. Years of service programs are strongly
correlated with increased tenure:
1
Companies offering a years-of-service award program
maintain employees an average of two to three years
longer than companies without a program
Employees plan to stay at their current employer for
an additional two years on top of that if the program
is perceived to be effective
Without Service
Awards
With Service
Awards
4.7
6.7
years
years

28. When done effectively, years of service
programs improve an additional set of key
employee engagement metrics:
2
First, they communicate that the company cares about
employees, which improves vertical engagement from
employee to manager;
Secondly, they help employees feel they fit in and
belong, which improves horizontal engagement from
employee with peers

29. MANAGEMENT
EMPLOYEES CO-WORKERS
The
Effect
O
f Years
O
f Service
A
w
ards
Horizontal Engagement
VerticalEngagement
Feel the
company
cares about
its employees
Key Insight: Career achievement
programs touch every
employee, at every level.

30. Both studies show how engagement and business
metrics are impacted by programs that reward
performance—in both formal and informal
ways—as well those that celebrate career
achievement. As proven, organizations
should see recognition not as an optional nice
to have perk, but rather a necessary strategy to
deliver the business results they seek.

31. ABOUT THE RESEARCH
The two studies referenced here were conducted by The Cicero Group
in 2012 and 2013. Service Awards: Quantifying the
Return-on-Investment and The Effect of Performance Recognition on
Employee Engagement both followed the same methodology and
were conducted in two phases. Both studies included qualitative and
quantitative research across an expansive breadth of demographic
groups. In the first phase, qualitative research comprised of interviews
and focus groups across varying geographies, cultures, and ages. This
was further supported by international focus groups with full-time
employees as well as in-depth interviews with human resource
executives and business managers.
The second phase of both studies comprised of a global survey
completed by employees and managers in 10 countries.

32. O.C. TANNER AND THE O.C. TANNER INSTITUTE
O. C. Tanner helps the world inspire and appreciate great work.
Through our innovative cloud-based software, tools, awards,
education, and research, we provide thought leadership and strategic
recognition solutions for thousands of clients globally. Designed to
engage talent, increase performance, and drive corporate goals, our
solutions create personalized recognition experiences delivered
through a smart technology platform.
The O.C. Tanner Institute regularly commissions research and provides
a global forum for exchanging ideas about recognition, engagement,
leadership, culture, human values, and sound business principles.

33. JOIN OUR COMMUNITY
Get the latest recognition insights and best practices.
Download the research paper:
SOURCES: O.C. Tanner Client Survey Data 2013 | Gallup 2012 surveys of 1.4 million employees |
The Effect of Performance Recognition on Employee Engagement 2013 | Service Awards: Quantifying the Return-on-Investment 2012