Why Applauz Is a “Need to Have” Not a “Nice to Have” Solution

You're reading this because you're considering investing in a recognition and engagement program.

We want to say – this is a great first step. Improving company culture starts with questioning existing practices and seeking solutions. You're on the right track, even if you have not taken a leap just yet.

That said, many company leaders support the idea of Applauz and a recognition program. But they see it as a "nice to have," not a "need to have."

The importance of recognition

We understand this objection. For a long time, it was hard to prove the tangible ROI of something as abstract as appreciation, engagement, or company culture.

But today, things are less theoretical. We have concrete studies to show the high cost of employee disengagement and how critical appreciation and engagement are to company culture. These aren't just nebulous concepts; they directly impact a business's bottom line.

In this article, we'll explain why culture-building tools like recognition, rewards, and Pulse Surveys aren't just a "nice to have" but a "need to have." And, by extension, how Applauz can generate a significant return on investment for any business.

Strong cultures are more profitable

Company culture is a pretty fuzzy concept. It is hard to track, measure, and monitor – at least objectively. As a result, leaders have often ignored its importance and relegated anything to do with “culture” to Human Resources.

But just because something is hard to measure doesn't mean it’s unimportant. In fact, these assumptions have proven to be misguided. 

For example, a recent study published by MIT Sloan Management showed toxic company culture was the top predictor of employee turnover, more than pay. 10X more, to be precise!

Strong cultures, conversely, keep employees engaged and motivated longer.

Research by two Harvard Business School professors set out to prove this theory. They conducted a rigorous analysis of 207 companies for 11 years. They wrote an entire book describing the findings. But we'll help you skip to the best part: What they found comparing companies with weak cultures versus those with the best cultures, strong cultures increased revenues by an average of 682% versus 166%, expanded their workforces by 282% versus 36%, and grew their stock prices by 901% versus 74%. 

A simple conclusion: Culture isn’t just “a nice to have” investing in company culture has undeniable benefits for employees and, in turn, the bottom line.

Respect is essential for creating a strong culture

Respect should never be optional. It's the bedrock of all healthy, strong relationships. At work, respect is just as important, and all strong cultures are characterized by high levels of mutual respect between peers and colleagues.

Research published by MIT Sloan sheds light on this truth. Researchers looked at millions – yes millions, of Glassdoor Reviews to understand why some companies got low culture scores versus high culture scores.

The companies with the highest Glassdoor culture scores were those where employees felt respected at work. This means employees are treated with consideration, courtesy, and dignity during their tenure. And their perspectives are taken into account.

You can see how recognition and appreciation are crucial to conveying respect and, by extension, building a positive culture. Not to mention, Applauz allows you to gather employee opinions and feedback. Thereby showing employees you want to listen to them. Helping you to foster feelings of respect that are so central to a positive culture. 

Lack of appreciation directly linked to turnover

Recognition and appreciation are key components of building "respect" at work. By extension, they are also core pillars of a healthy workplace. Yet so many leaders fail to offer genuine recognition to their employees regularly.

This lack of appreciation leads to employees feeling undervalued. And very often, leaving for workplaces where they feel more valued.

A 2021 report by Mckinsey found 54% of employees cited "not feeling valued by their organization" as a top reason for quitting.

A 2017 report by Gallup showed a lack of recognition as one of the most common reasons employees left an organization. It's interesting to note that the more talented the employee is, the faster they leave.

Regular recognition solves many management issues – low morale, engagement, and even turnover, just to name a few. Ultimately, recognition is a low-effort, high-impact tactic for driving greater employee dedication and loyalty.

Recognition is critical to employee well-being

There's something unique about appreciation. It sparks a near-instant reaction. Simply put: it feels good! The feeling is contagious, too. 

Recognition has a way of creating a positive feedback loop. It can trigger a ripple effect of happiness across an entire organization. This isn't fantasy; this is science. 

For example, an American Psychological Association study showed that one simple gratitude practice resulted in employees treating each other better. They engaged in less "workplace mistreatment." Meaning they participated in less rudeness, gossip, and exclusion. 

Another fascinating study by the University of Berkeley showed expressions of gratitude from peers helped people better manage stress on a physical level. That's powerful stuff!

Finally, the U.S. Surgeon General even published a report on workplace well-being, citing "regular recognition" as one of the core tactics for driving greater well-being in the workplace. 

The link between recognition, appreciation and employee well-being is undeniable. To that end, if you're looking to invest in employee well-being, recognition must be a central part of this strategy. 

Appreciation is key to human-centric leadership

Let's be honest. It’s a struggle for many managers to recognize their employees with regular frequency. That's why a recognition program like Applauz is so valuable. It helps gives direction and structure to a vague goal like "giving more recognition." It keeps managers on track and accountable. 

Think of it like a workout program. But instead of being for physical health, it's for relationship health in the workplace.

These interpersonal habits are essential skills to develop. Effective leaders must learn to empathize with others and build strong relationships. 

A 2022 study by Mckinsey showed 56% of employees cite poor management as the top reason for quitting, and another employee unhappiness study showed a whopping 75% are frustrated with their managers. 

That's a lot of unhappy people! 

There is a serious risk of these frustrations impacting a business's performance. Due to this, more company leaders are placing "bad management" at the top of their priority lists. A recent Gartner survey found a top priority for over 60% of HR leaders will be to train their management to be more "human-centric."

If you're also investing in developing your managers, a recognition program like Applauz – that emphasizes positive leadership practices like recognition and appreciation – can be a first step in the right direction.