Studies have consistently shown that when recognition is done right, on a regular basis through feedback from all of an employee’s peers, it produces healthier, happier employees that generate better output, deliver improved customer service and remain in their roles for longer periods of time. Yet, recognition in the workplace is lacking, with data revealing that over half of employees do not feel appreciated at work, while nearly a third have already left a job due to a lack of recognition.

Companies across the globe have an opportunity to improve the health of both their workplace and their business by tapping into the power of recognition. Implementing formalised recognition programmes that are closely tied to the performance management process has the power to create a positive cultural shift in organisations across the globe.

Traditional performance review failures – and the opportunity for success through recognition

While business practices have changed greatly in the last forty years, the traditional performance review process has not; it is frozen in time. As a result, only a third of employees in today’s workforce believe traditional performance reviews provide accurate recognition for the work they have done.

Usually taking place with a manager on an annual basis, the aim of most current review processes is to provide feedback on goals and targets that have been clearly defined in the employee’s job description. However, times have changed and roles are becoming more fluid and in a constant state of evolution. As a result, annual performance reviews are not seen as effective as they once were – they are often biased, inaccurate and too sparse to truly reflect an honest evaluation. Organisations need to therefore look at implementing a strategy that will continue to motivate and drive commitment, while also providing a true reflection of the individual employee’s performance. Through social recognition programmes, employees are identified consistently throughout the year for the good work that they do, yielding a data set that informs performance reviews in a fuller, more accurate way.

Using wisdom of the crowds to inform the performance review

A performance review that consists of feedback by one person, at one moment in time, can fairly be termed a single point of failure. To create a fuller, more telling picture, the wisdom of the crowds, also termed crowdsourcing, must be applied to the process. Crowdsourced feedback and recognition provides a much deeper, better-rounded understanding of an employee than any single person would be capable of arriving at during a review once a year. This bottom-up, peer-to-peer strategy allows all employees – not just managers – to  recognise others for good work constantly and immediately, which provides much more accurate feedback that only serves to motivate and encourage.

Crowdsourcing feedback also ensures that, when it comes to the performance review itself, previous months’ work is not forgotten as it has been recorded throughout the year. As the knowledge is taken from peers who work with the employee every day, the feedback holds more weight and allows for reinforcement through tangible examples, helping the employee understand how their performance affects their colleagues and can be improved to have a greater impact. In fact, nearly half of UK employees think crowdsourced data coming from people they work with on a day-to-day basis gives a more accurate picture of their performance.

In addition, when the workforce is encouraged to recognise and reward colleagues for behaviour that reflects a pre-defined set of organisational goals and values, these become embedded within the company and are aligned across geographic, national and even demographic groups. The business’ values are communicated in the same way to all, and understood by everyone – irrespective of other groups they may belong to. Indeed, as everyone within the organisation begins monitoring the characteristics that define the culture, all participants become highly sensitive to the right values and behaviours, ensuring that the environment repeats and reinforces itself.

Correctly implemented, a strategic recognition programme that involves the use of crowdsourcing is an ongoing catalyst for enhanced employee motivation and performance. When an employee can see they are adding value to their organisation and they are regularly communicating with their peers and managers, they will become more engaged and their productivity levels will grow. Furthermore, by implementing a programme that makes sure each employee fully understands the business’ core values and is actively working towards the same goals, it provides the workforce with structure and consistency, which ultimately strengthens corporate culture. Recognition that provides an honest evaluation increases happiness which decreases turnover and reduces cost to the company. The opportunity this creates for organisations – from individual performance, to business growth – is one with vast potential that can positively change the way a company does business.

Derek Irvine, vice president, client strategy and consulting, Globoforce