Workhuman, Gallup Study Seeks to Prove the ROI of Praise
This research study combines a survey; a research meta-analysis and a correlation with Bureau of Labor Statistics in an attempt to identify the return on investment of recognition programs.By doubling to 50% the number of employees who strongly agree in this Gallup study “to receiving recognition or praise for doing good work in the last week, an average business with 10,000 employees could expect to save $91.9 million in gained employee productivity; $2.8 million due to decreased injuries, and $3.8 million due to fewer unscheduled absences.”
That’s the key finding of “From Praise to Profits: The Business Case for Strategic Recognition,” produced by Gallup for Massachusetts-based Workhuman based on a combination of Gallup employee engagement survey data, a meta-analysis of studies, what Gallup calls a utility analysis method, and Bureau of Labor Statistics figures.
In the study, Gallup “reviewed correlations between employee recognition and employee outcomes across hundreds of organizations and thousands of teams in different industries. Globally, one in four employees in Gallup’s database strongly agree that they have received recognition or praise for doing good work in the last week. We found that if the median business in our database doubled the number of employees who strongly agree to this item, that business could see a 9% improvement in productivity; a 22% decrease in safety incidents, and a 22% decrease in absenteeism.”
The report adds, “Each organization is unique. Our analysis does not capture all the distinctive factors that influence an individual organization’s financial outcomes. But our findings do show a strong generalizable pattern between recognition and the financially sensitive aspects of any business. The dollar amounts in this report give an example of what an average organization could expect, based on Bureau of Labor Statistics (BLS) data. A company may find its own results vary. Organizations with recognition levels below the median of Gallup’s database are likely to see an even greater impact by improving the frequency of recognition in their workplace.”
The study attributes the impact to the importance of intrinsic recognition. “Each organization is unique. Our analysis does not capture all the distinctive factors that influence an individual organization’s financial outcomes. But our findings do show a strong generalizable pattern between recognition and the financially sensitive aspects of any business.”
Gallup used the following methodologies to draw the financial connections:
- Some results in this report came from data collected from a survey conducted Feb. 14-28, 2022, with 7,636 adults who are employed full-time or part-time, aged 18 and older, and living in all 50 U.S. states and the District of Columbia, as a part of the Gallup Panel™.
- Meta-analysis was also used and is from a database of 456 research studies across 276 organizations in 54 industries and 96 countries (Harter et al., 2020). In total, 112,312 business/work units, including 2.7 million employees, were studied.
- Utility analysis methods outlined in research by Asplund, Dvorak, Griffiths et al., (2016) were used to estimate the percentage change in performance outcomes when an organization at the 50th percentile in Gallup's database doubled the number of employees who strongly agree to the item, In the last seven days, I have received recognition or praise for doing good work.
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