The benefits of an employee stock ownership plan (ESOP) are closely tied to finances. A more secure retirement is surely an incentive for employee owners to remain at a company. However, the incentive of future gains may wane without an empowered culture built on employee recognition.
Recently, the Society for Human Resource Management (SHRM) reported that in terms of employee satisfaction, recognition ranks third behind job security and compensation — a ranking that speaks directly to the need for an ownership culture that prioritizes employee acknowledgment.
Why recognition matters in an ownership culture
When done with authenticity, recognition strengthens employees’ commitment to the success of a company. It can also foster employee satisfaction that provides a deep sense of purpose and belonging.
Statistics show that feeling appreciated is important to employees. So much so that 66% responding to an employee satisfaction survey said they’d leave their job if they didn’t feel valued.
Given that 37% of employees report never having been recognized by their employer and 82% of senior-level management and leaders feel under-appreciated, there is plenty of room for improvement. ESOP companies that embrace the opportunity can transform their ownership culture in three meaningful ways.
1. Increased Engagement
In many ways, recognition is at the heart of a dynamic ownership culture. Employee owners who feel seen and acknowledged generally equate successful outcomes with individual effort and engagement. For 77% of employees, recognizing their efforts compels them to work even harder to make impactful contributions.
Contrary to widespread popular belief, money doesn’t always equal motivation. For 65% of employees, the non-monetary reward of positive co-worker and management feedback keep them engaged:
- 40% of employees find recognition from managers particularly motivational
- 33% of employees seek recognition from executive leadership
- 28% of employees cite acknowledgment from peers as most validating
Recognition is powerful. According to Globoforce/WorkHuman, employees who are consistently recognized are five times more likely to feel valued, six times more likely to remain engaged with their work, and seven times more likely to stay in their jobs long-term.
2. Greater Job Retention & Satisfaction
A culture that lacks employee recognition could be encouraging turnover and increased absenteeism that’s detrimental to team and company growth. For ESOP companies, there’s the added potential of negatively impacting all employees’ retirement funding.
If employees perceive they are unappreciated, they are twice as likely to quit within the next year. Those not actively job hunting might also be vulnerable, as 39% of employees claim they could be lured by the right offer.
On the flipside, HR professionals have reason to believe that a little recognition can go a long way in employee retention. Nearly 90% of employees are more likely to stay at a company that prioritizes regular recognition — and 51% are more willing to tout the company as a great place to work when referring others.
Engagement and retention are closely linked in creating an ownership culture that delivers on employee satisfaction. In turn, employees who feel appreciated generally “go the extra mile” in performing their jobs — and happy employees are 13% more productive.
3. Motivated Performance, Increased Productivity
Employees who feel validated at work are 2.5 times more likely to be happy in their jobs, and 1.5 times more likely to remain motivated to do great work.
Part and parcel to this is an ownership culture that is authentically attuned to small achievements as well as big wins. There is an organic element to recognition, but there is also a strategy to helping employees consistently do their best for greater productivity and profitability.
A regular cadence of recognition is key. A quarterly approach is common in companies, but may miss the mark on maximizing productivity. Switching to a monthly schedule generally moves the needle on engagement and productivity as much as 40%. It can also change employee perspectives. Monthly recognition translates to a feeling of being productive and engaged for 36% of employees.
That’s not to say a random, sincere shout-out for a job well done doesn’t have merit. The opposite appears to be true. According to research, 92% of employees who are recognized for somehow going above and beyond in routine work are likely to repeat that behavior — and positivity often increases productivity.
Incorporating Employee Recognition Into Your Ownership Culture
Understanding how pivotal recognition is to the well-being of employees and success of your ESOP may have you reconsidering the goals and structure of your ownership culture.
Read our eBook, Culture and Communications, for expert insights on building an ownership culture that invests in people and the company through continuous improvement in engagement, retention, and performance. Click below to get your copy.
SOURCES
The 48 Employee Recognition Statistics to Take Note of in 2024
Top 20 employee recognition statistics for HR leaders in 2024
