Research Tips
Rewards, Recognition, Motivation and Turnover

Below is an exchange of e-mails between HR Focus and The Business Research Lab.

Hello. I'm writing an article for HR Focus on employee reward and recognition programs and wonder if you have any statistics I can use (will attribute, of course) in the article that ties in the relationship between rewards and recognition to motivating employees to excel at what they do, as well as reducing turnover. Would appreciate any material you can send me.

Sincerely,
Editor
HR Focus

Dear Anita,

Thank you for your inquiry. I believe the below information may be of interest to you.

There is a definite link between the intention of people to stay at their place of employment and reward/recognition. Indeed, recent Business Research Lab studies have shown that the correlation between the length of time people intend to stay with their current employers and the recognition given for work that is well done is .27 -- a positive and statistically significant relationship. The relationship between monetary rewards and intention to stay also is positive, but somewhat less so.

From this we can extrapolate that rewarding and recognizing positive results is an important factor in retaining employees. However, we would be negligent if we did not state that there are other even more important factors. Our data suggest that creating a nurturing environment, one in which everyone seems to be pulling in the same direction and in which peoples' contributions are valued, is even more important than reward and recognition. The strongest relationships between the intention of people to stay and other attributes include such items as pride in the employer, the employees' affinity for the type of work, the leadership skills of management, trust, and teamwork. Thus, appropriate reward and recognition should be viewed as an important component in the creation of an overall positive environment in which both employees and employer can thrive.

The below graph sheds some additional light on the subject.



Our data also suggest that reward/recognition are important to employee motivation. We have one attribute worded "I feel I am contributing to this company's mission." While this attribute is comprised of factors in addition to "motivation," it certainly includes motivation. The correlation between this attribute and the statement "this company gives enough recognition for work that's well done" is a positive .38 -- a statistically significant figure. As is the case with the intention to stay with a company, this factor does not act in isolation. Other factors are more important; in particular -- teamwork and leadership skills.

These findings are not unusual. While they are from the aggregate results of many corporations, in individual studies we often find that the "soft" factors are those that tend to increase employee satisfaction, tenure, and motivation. People enjoy working, and thrive in organizations that create positive work environments; environments where they can make a difference and where most people in the organization are competent and pulling together to move the company forward. Appropriately structured reward and recognition programs are important, but not exclusive, components in this mix.