Gratitude: Good for morale, better for business

September 12, 2023

5 min read

September 12, 2023

5 min read

Share on

This article was originally published in The Washington Post.

Gratitude: Good for morale, better for business

A thank you here, a high-five there—you’d be hard-pressed to find anyone who’s anti-gratitude. And yet, with busy schedules, looming deadlines and aggressive revenue goals, showing appreciation often gets pushed to the backburner in the workplace. But what if there were a way to streamline workplace gratitude, to make it a daily practice and bake it into a company’s culture? How would that affect individual employees and businesses as a whole?

It turns out, the impacts can be significant—to morale and profits. According to a recent study, increasing employee recognition can generate a $92 million boost in productivity for an average company of 10,000.¹ But while it appears clear that the business impact of gratitude is powerful, perhaps what’s less clear is the answer to this question: How does a company prioritize gratitude?

Enter Workhuman,Opens in a new tab the company that deals in gratitude. Through their employee recognition software and tools—including team celebration platforms, personal milestone markers, employee mood tracking, cutting-edge analytics capabilities and a world-class e-commerce store for prizing—Workhuman makes expressing appreciation in meaningful ways simple. And the effects speak for themselves.

“The science unequivocally proves the direct and sizable impact that gratitude has on things like employee engagement, morale, well-being, job satisfaction and, importantly, employee performance and productivity,” Tom Libretto, Workhuman’s president, said. Findings from various studies over the years include a 50 percent productivity boost per person after each received a personal pep talk², and greater resilience among employees who make gratitude a habit.³

The case for moving employee recognition from that backburner up to the front of the proverbial company stove is evident. And doing so in a strategic way, which Workhuman pioneered 20 years ago and has been steadily honing ever since, can transform a workplace. Here’s how.

“The science unequivocally proves the direct and sizable impact that gratitude has on employee performance and productivity.”—Tom Libretto, president, Workhuman

Greater productivity

When payroll and HR management company ADPOpens in a new tab developed its custom myMoment recognition program with Workhuman, increasing productivity was a chief goal. That target has “been achieved, if not exceeded…and supported by this program globally,” Trusha Palkhiwala, DVP of global HR services at ADP, said.Within myMoment, ADP leverages both Workhuman’s Social RecognitionOpens in a new tab platform, which streamlines manager and peer-to-peer recognition, and Service MilestonesOpens in a new tab program, which celebrates work anniversaries. These programs can be tailored to reflect an organization’s unique values and goals—sourcing congratulatory messages from colleagues near and far and making it possible for employees to send rewards points to each other. Employees can then redeem their points on Workhuman’s Store for merchandise, gift cards, experiences and more.

Palkhiwala said that myMoment has become so much more than a feel-good outlet for saying thanks. “We leverage the system to help drive culture, connection and high-performing teams,” she explained. “It’s a meaningful way to encourage achievement.”

Reports of increased employee performance akin to ADP’s are common among Workhuman’s clients. That said, Workhuman is a company founded on research and doesn’t base its products on anecdotal evidence. Instead, Workhuman has assembled a team of psychologists, researchers, data scientists, linguists, programmers and engineers that analyze how companies function best. This multidisciplinary group, known as Workhuman iQ, has assigned concrete and quantifiable terms to the impacts of gratitude. And according to Libretto, the results are “mind-blowing.”

“On average, if a company of 10,000 employees were to simply double the amount of recognition that employees were receiving every week across the organization, there is a $92 million productivity boost to that company’s bottom line,” Libretto said, citing the results of a recent Workhuman-Gallup study.¹ The research also found that employee recognition saved a 10,000-person organization $16 million annually due to reduced employee turnover and decreased absenteeism by 22 percent.

Increased employee
retention

As the study found, employees that feel appreciated don’t just work harder, they also stick around. “Recognition is a profound insulator against unwanted attrition,” Libretto said.When employees feel their work is valued, they are 56 percent less likely to be looking for other job opportunities and five times as likely to see a path to grow in the organization.⁴Fortunately, gratitude goes a long way in fostering diverse environments. When meaningful appreciation is shown in the workplace, all groups mentioned above demonstrate lower rates of burnout.This is music to hiring departments’ ears, as the cost of replacing an employee is estimated to be between 50 percent and 150 percent of that employee’s salary. For more senior positions, that cost per employee shoots up to 213 percent.⁵But when a company engrains gratitude in the workplace, they can expect significant savings in this area. Using the example of the 10,000-person organization, Libretto explained, “companies can expect to save over $16 million annually in attrition avoidance and the associated costs of offboarding, recruitment, onboarding, new-hire training and that time period where there are lower levels of productivity.”⁶

With a corporate culture of gratitude, employees are:4Xas likely to be engagedSourceOpens in a new tab1234With a corporate culture of gratitude, employees are:5Xas likely to see a path to grow in the organizationSourceOpens in a new tab1234With a corporate culture of gratitude, employees are:56%less likely to be looking for other jobsSourceOpens in a new tab1234With a corporate culture of gratitude, employees are:30%less likely to experience burnoutSourceOpens in a new tab1234

A more diverse workplace

Retention shouldn’t simply be about how many employees stick around, but also who sticks around. In terms of cultivating a more diverse workplace, it’s important to note that certain groups have been historically under-supported and therefore experience burnout more frequently. Women experience burnout at greater rates than male employees, and the same is true for Black and Hispanic workers compared to white workers.⁷Fortunately, gratitude goes a long way in fostering diverse environments. When meaningful appreciation is shown in the workplace, all groups mentioned above demonstrate lower rates of burnout.“Knowing each person is valued and brings their particular strengths to the team helps ADP ensure we continue to build a diverse workforce.”—Trisha Palkhiwala, DVP, global HR services, ADP

Palkhiwala confirmed she has seen these findings play out in the office: “Knowing each person is valued and brings their particular strengths to the team helps ADP ensure we continue to build a diverse workforce.” She also notes that sharing stories of success, both big and small, and recognizing how everyone’s achievements contribute to the company’s goals “makes the world feel smaller” and teams feel more connected.

In addition to helping recognize everyone’s achievements in a diverse workplace, Workhuman also embeds a coaching tool in its software to make sure that recognition is done right. Inclusion AdvisorOpens in a new tab is an AI-powered tool that allows employees to check for instances of unconscious bias in their recognition messages before hitting send. Inclusion Advisor flags potentially problematic words and phrases, explains how they could be perceived in a negative way and suggests alternatives. This way, recognition messages are as effective as possible, and employees feel confident sending them and appreciated receiving them.

Employees that drive innovation

All those thank yous also lead to workers who thrive. Employees who feel fulfilled by recognition are four times as likely to be engaged in their work.⁸ Pair that engagement with a diverse workplace in which unique perspectives are celebrated, and you get an organization where creativity and innovation flourish.And with Workhuman, companies can supercharge this level of innovation.“A recognition program can be directed at a specific business objective and for a specific period of time,” Libretto said. “So, for example, if an organization wants to increase its focus on innovation, a custom recognition program [that recognizes and rewards innovative values and behaviors] is a perfect tool to use to achieve that objective and get that organizational energy pointed in that direction.”

“Gratitude is an investment in a company’s people and culture that, when done well, can have the…absolute highest return on investment, compared to any other investment.”—Tom Libretto, president, Workhuman

How much gratitude is enough?

As far as how often appreciation should be shown, Libretto said there’s no magic number. But traditional timelines, where employee reviews are given once or twice a year, aren’t sufficient—even when the reviews are glowing. Workhuman’s research found that employees who receive recognition only a few times a year from leaders are 74 percent more likely to say they do not plan to be at the organization in one year’s time.⁹ When asked how often they’d like to receive recognition, nearly 60 percent of respondents said they’d prefer it from both managers and peers a few times a month or more.⁶

Libretto said that traditional feedback timelines and bonus schemes fail “because the impact of a bonus has a shelf life of about two weeks and then it’s forgotten.” Instead, recognition, whether employees are receiving it themselves or simply witnessing it, needs to be incorporated into a company’s everyday culture. “Consistent and always-on recognition is the gift that keeps on giving, both for the givers and the receivers,” Libretto said.

Libretto went on to explain that “gratitude is an investment in a company’s people and culture that, when done well, can have the most immediate, but also longest lasting and absolute highest return on investment, compared to any other investment an organization can make.” In fact, Workhuman’s research found companies that invest 10 percent more per employee in a recognition program show an average increase in productivity that’s equivalent to $3,900 per employee.¹⁰

Put another way: Gratitude isn’t just an essential business strategy. It’s the essential business strategy, Libretto said.

Partner Content