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Employee Recognition: Why It Matters Rewarding employees for a job well-done will do wonders for their performance--and your bottom line.

By Alex Hiam

Opinions expressed by Entrepreneur contributors are their own.

I just returned from a fascinating conference put on by theNational Association for Employee Recognition (NAER). (Yes, therereally is such a thing.) I got a chance to give a talk myself, thenspent two days meeting recognition specialists and learning fromthem. Some were from big companies like United Airlines, othersfrom community colleges, city government and so forth. Not manyentrepreneurs or small-business owners though. In fact, not aone.

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Most entrepreneurs do not consider recognition a central part oftheir management practices. But let's get personal about thisand talk about you. I bet you don't budget an extra 3percent on top of your payroll costs for employee rewards, awards,celebrations and gifts, for example, yet that is the goal of manyof the recognition specialists I met from large firms.

Is this a luxury for companies that can afford to waste money? Idon't think so. In fact, I think there are many profitablereturns from an emphasis on recognition. It probably costs us notto do it. Here are some ideas I brought back from my experience atNAER that I think can apply in every workplace, no matter the sizeor budget:

1. If you recognize and make a bit ofa fuss about the good things employees do, then you will findyourself spending a lot less time worrying about the bad thingsthey do. They will do less of the negative, and they will strive todo more of the positive things you are recognizing. It is far, fareasier to lead people to improved performances by thanking themwhen they do it right than giving them "grief" (I wastempted by another word there actually) when they do it wrong.

2. There are important milestones and accomplishments in thelife of your business. Mark them! Have a party. Take a moment tocelebrate. Recharge your own and your employees' batteries. Itis too easy to get so caught up in the daily struggle that younever stop to recognize the good work you do.

3. Praise and recognize your star performers. Some of yourrecognition budget (however large or small) should certainly gotoward spotlighting role model performances and role modelemployees. This makes them feel good, encouraging them to stay onboard and keep trying hard. And it gives everyone a bit ofinspiration and a clearer idea of what you want employees to shootfor. (If you search, you can find many resources for recognitionproducts and ideas; for instance, I love the assortment on

4. Recognize good effort, not just results. When employees havehad a tough week, throw a mini party for them. Bring in some pizza,a cheesecake or whatever inspires you, and share it with your crew.Or try writing a personal thank-you card to each employee--maybepicking out a different design for each and having some funrecognizing individuals in your selection. You help the marathonrunner the most by offering encouragement and nourishment along thetrack, not just by waiting at the finish line with a trophy.Recognizing effort has a bigger impact than giving a prize at theend of the race. Same goes for employees, who are in a race everyday.

Every day, millions of people throw their hearts into theirwork. They want to succeed. They want their work to be appreciatedand their efforts to be recognized. When we remember to take careof these very human needs for recognition and appreciation and theoccasional round of applause, we do a great deal to create thevital, energized workplace we need in order to succeed intoday's challenging world of business.

AlexHiam is a trainer and consultant and the author of Motivating & Rewarding Employees: New andBetter Ways to Inspire Your Peopleas well as Marketing for Dummies. His new book, Making Horses Drink, is now available fromEntrepreneur Press and major bookstores.

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