Loeb Enterprises | Loeb.NYC
Loeb Enterprises | Loeb.NYC

Profits and Losses of Employee Appreciation

Shannon Gazay

A company’s ability to retain talent often has consequences to its reputation and the quality of productivity and culture.  A 2013 Gallup survey report entitled, “How to Tackle U.S. Employees’ Stagnating Engagement” which studied almost 5 million employees, concluded that actively disengaged employees cost the United States economy $450 Billion – $550 Billion in lost productivity every year.

To contextualize the scale of this cost, the Federal Government has budgeted $412 Billion for mandatory Medicaid spending in 2019. Employee disengagement and workplace departures risk lowering morale amongst remaining employees and results in recruiting and training costs. While some employee turnover is natural and to be expected, consider the following eye-opening, preventable reason for disruption to employee retention.

The OC Tanner Learning Group published the results of a 10-year, 200,000 person study, “Performance: Accelerated.” Managers and employees were interviewed for the study, which centered on employee engagement and retention. The results revealed that 79% of people who left their jobs cited ‘lack of appreciation’ as their reason for leaving. Forbes online recently cited a poll which showed that more than 35% of employees consider “lack of recognition” of their work as the biggest hindrance to their productivity. The Wall Street Journal commented that this report provided “a startling link between recognition and profitability.”

Reasons for quitting work pie chat and statistic

Given the extremely high number of people who attribute their reason for leaving a job to feeling (or being) under-appreciated and the resulting costs to business, one would think that employers would make appreciation and gratitude expression a top priority for themselves and managerial staff.

Over the past thirteen years, I have managed the operations and functionality of teams in a range of industries. I am now an (appreciated and thankful) administrative member of the Corporate Development team at Loeb.NYC.  

Throughout my career, I have witnessed numerous acts of appreciation, as well as some demoralizing methods for seeking performance results. Eventually, people who didn’t feel they were treated well always resigned, and sometimes did lasting reputational damage to a business. The reputation of one company suffered so severely as the result of complaints by a disgruntled former-employee that relationships with other businesses and customers were severely impacted. The situation attracted enough community attention that sales drastically decreased. The company closed its doors late last year. 

Nina Lichtman illustration two people in meeting

Fortunately, there are simple ways to mitigate the risks and costs associated with employee turnover and low morale, as well as to boost Return on Investment (ROI) of retained employees. Genuine and well-timed expressions of appreciation have multiple benefits (financial, time, production output, etc.), and are not costly or time-consuming.

Say “Thanks”, Show Thanks

A verbal “thank you for [specific of what you’re thankful for],” can change a colleague’s mood and outlook, and let them know that you care about their professional well-being. Brendan Kamm, CEO of business-centric, mobile gifting app, “Thnks” has founded an entire venture on the premise that expressing gratitude has a ripple-effect and is a valuable workplace exercise with multiple rewards. He states,

“The most powerful tool you have for creating success is to appreciate others. Simple, considerate gestures, like saying ‘thank you,’ have the power to completely change another person’s perspective. It demonstrates that you value their time and respect your relationship. The Art of Appreciation is the ultimate game changer.”

Thnks’ platform allows users to send (customizable) gifts with personalized messages and requires only the recipient’s email, twitter or SMS address. Kamm cites the following effective examples:

Send someone an Uber Ride on a rainy morning to make their commute a little easier and their day a little brighter.”

Coffee for the Week is a great way to show your appreciation to someone who you know has a trying week of work ahead of them. Help keep them caffeinated!”

For the person who is always on the road, a more legroom seat upgrade or carry-on cocktail kit can make their life on the move a little more comfortable while demonstrating your thoughtfulness.”

To gain further and more immediate insight into the effects of appreciation in the professional context, we conducted an anonymous, external “Workplace Appreciation Survey.”  We asked, “Have you personally been shown appreciation by someone at work?”. Most examples provided in answer to that question were not major pecuniary or grand gestures, but rather tokenistic or verbal acknowledgments, not tied to a formal reward or review program. For example:

Nina Lichtman illustration appreciation gift ideas

 

 

“I got a cookie.”

“Praise, recognition, gratitude.”

“Kind words in a card, token gifts, food.”

“I was rewarded with praise from my supervisor and a gift card.”

“Thank you emails, shout-outs in meetings or at events, thank you cards.”

“I frequently hear from other team members how much they appreciate having me there.”

 

 

These examples may seem simplistic, even infantile, but what these responses demonstrate is that people remember small, timely expressions of gratitude. And that genuine expressions of gratitude, rather than the monetary worth of the gift itself, is meaningful and effective for building morale and improving employee retention in addition to team building and a formal pay increase structure.

Showing appreciation is not a one-way street or exclusively “top-down” in nature. While it benefits both parties (and business) for employers to show gratitude to their employees and subordinates, it is also pragmatic and valuable for the recognition or consideration to flow in the opposite direction as well. Managers and high-level executives deserve thanks too. A survey respondent added,

My partner and I tell each other “good job” frequently. He’s very good about giving positive feedback. We meet daily and go over our agenda and pending requests from clients. We also talk about ways we could both improve. I feel extremely valued at work, not only by my partner but by our clients as well.”

It doesn’t cost you anything to say “thanks”, but it might cost you not to.

it doesn't cost you anything to say thanks

Team Building vs. Targeted Gratitude

Lest one think that group offerings like company events and team building exercises are enough to prevent or cure “under-appreciitis”, this way lies false hope. While group events and team-building are important in their own right and may serve to demonstrate collective recognition and morale-boosting, team recognition does not adequately tackle the problem of an individual employee feeling despondent, undervalued or taken for granted. Group activities are not designed to focus on the performance of any one individual.   

Sandra is an experienced accounting and finance professional in New York City. She has worked both as a low-to-mid-level employee but has also held managerial and CFO positions. Sandra has experience across enormous, big-name corporations as well as smaller hedge funds and companies. She makes the case that while team events can be useful for boosting morale, some employees would also like flexibility for “priorities outside work” and that team-building works  best if it feels organic and not forced:

“I have a life outside of work; I have priorities outside of work… [which take] time to maintain. Organic colleague bonds are really strong, but… I prefer an organization to respect the individual. If you’re on a good team with good people who support each other, it’s hugely instrumental in defraying feelings of unfair work or lack of appreciation.”

Nina Lichtman illustration happy employees

One person who answered the survey made the following point about group versus individual appreciation:

“Although I didn’t leave the job because I didn’t feel appreciated (it was a one-year residency), I will not return to work at that organization because I felt like the morale was so low. A huge part of that [decision] is lack of recognition and appreciation from management for the efforts of those in the department…The manager explicitly stated that she did not believe in recognizing people individually because it creates “animosity” between staff members… She was not even supportive of getting people candy bars on their birthdays. It fostered an environment full of animosity and a focus on the negative. Hardly anyone in the department felt appreciated.”

Our external “Workplace Appreciation Survey” asked a question derived from the OC Tanner study mentioned earlier, “Does the person you report to do a good job of recognizing employee contributions?” One answer stated, “Currently, no. I no longer work in an environment where we are praised or recognized for the things that we do.”

How do I manage?

I realized that a good manager is a great leader

For three years, I was a manager at an ice cream company.  When I started, there was one small store in San Francisco.  There were eight people on staff, including two founders. We received investment capital, and suddenly I was opening stores and hiring at pace. At that time, I had a conversation with a team member, which impacted how I view the importance of appreciation and myself as a manager.  

He had been working overtime, late shifts and sacrificing weekends. He was drained. I didn’t notice until it was too late.  In one of our final conversations, he told me, “I feel like I am doing everything for everyone else and no one is doing anything for me.”  I felt like I had failed him. He left shortly after that.

From that point, I realized that a good manager is a great leader. I started having weekly one-on-one check-ins with people I managed. We discussed roadblocks in operations and what I could do to set them up for success.  We held manager meetings where staff could showcase their wins. As a result of these efforts, day-to-day operations were smoother, and the team more cohesive. It was a tangible improvement. Taking the time to hear employees out, address concerns and provide individual feedback, made my team feel appreciated.  Sandra (hedge fund CFO) agrees,

Part of learning how to manage is to be actively trained on what your staff is doing. In my position, I like to keep a list, for people I work with when they’ve done something really positive. If it’s something negative, I will usually address that right away. If [one] think[s] reinforcing positive behavior is far more beneficial [than only noting negative behavior] you’re in better place at the end of a reporting cycle if you track performance in real time, to more accurately weigh the employees’ pros, good qualities, and development areas.”

Low-Cost Methods to Help Staff Feel Appreciated*

*With High ROI.

Give regular, constructive feedback

Set aside some time to go over changes your staff could make to improve. Express what you genuinely like about a team member’s performance, contribution or abilities.  Avoid creating a situation reflected in this survey response: “My boss was not into positive feedback. It was just assumed we should work well. He only let us know when there were issues.” Inform individuals precisely what you like about their work. Contextualize your comments by identifying how their efforts contributed to the team’s goals.  

Timing is everything

Giving feedback when the timing is not linked to formal performance reviews or deadlines will be perceived as more genuine. Sandra comments,

“There has to be out of cycle performance rewards for people who you value. Too many times only when someone is leaving, has [the employer] pulled the ‘money card’ and at that point it’s disingenuous and it’s too late. A clear indicator [of disingenuousness] is people who express praise only when there’s a pressing deadline, or there’s a linked benefit. But that’s why genuine feedback or taking time out of the normal stress and routine of work, or taking someone for coffee and informally going through their strengths and development points, has been a much better way to give that kind of information because it’s a conversation in somewhat isolation.”

By showing appreciation you can significantly lessen recruiting, re-hiring, training and gap-filling costs

Be aware of your employee’s time

Employees can feel taken advantage of if their manager is not mindful of personal time, is not aware of what the staff-member does with their work time, or lacks a realistic picture of how long tasks take to complete. According to a survey respondent, “When my shift was over, I wish [my manager] could have been more aware that I am tired and I want to go home. Not have me linger around longer ‘cause my employer wants to talk… I think some people are not aware of how much work goes into some of the projects I work on.” 

Advocate for your staff

Have a system to remind yourself of the positive work your team members and colleagues are doing and spread the word.  An extra step is being an advocate for a person. Managers may not have a say over their team’s pay, but it is meaningful for a supervisor to inform a senior person or HR member of the value a person adds and their strongest skills. A respondent claimed, “When people promote the work I do for them or acknowledge the effort and love I put into it, it brightens my life up.

The Profits of Proactive Appreciation

By showing appreciation, you can significantly lessen recruiting, re-hiring, training and gap-filling costs. You can mitigate the risk of damage to morale and business-reputation caused by employee turnover due to feelings of unappreciation. The prophylactic for this scenario is to offer small and timely words or gestures of thanks, and it makes financial sense to take those steps. If those words and gestures not only prevented loss, but stimulated profit, growth, and productivity, it would be suboptimal business not to consider it.

Happily for me, Loeb.NYC is an environment that cultivates a fun and rewarding employee culture, and actively cares about staff satisfaction. I’m grateful for that.

 

 *Original Illustrations by Nina Lichtman, (Dashride). Graphics by Alyssa Liegel. Leigh Adler, Editor. Contributions by Brendan Kamm. 

Shannon Gazay