Although companies with employee rewards and recognition programs are effective at improving employee engagement and reducing voluntary turnover, employers implementing or maintaining such programs must contend with a large perception gap on how often employees are recognized — and even overcome employee skepticism that the programs exist at all.

These are the findings of "The State of Employee Recognition in 2012" from Bersin & Associates, which concludes that in organizations where recognition occurs, employee engagement, productivity and customer service are about 14% better than those where recognition does not occur.

However, the survey reveals a marked disconnect on the existence of such programs as well as the prevalence of recognition. Three out of four companies have a recognition program, but only 58% of employees believe their organizations have these programs. This disconnect indicates that the money organizations invest in recognition programs —  about 1% of payroll, according to the firm — may be ineffectively spent. many employees don't even know the programs exist.

In addition, senior leaders are out of touch with how often employees are recognized. Nearly 80% of senior leaders believe employees are recognized at least on a monthly basis, and 43% of senior leaders say employees are recognized weekly or more often. By stark contrast, 40% of managers report that their peers are recognized monthly or more often and 70% of employees report they are recognized annually or not at all.

The report is based on the results of two online surveys of 834 organizations conducted between January and May. It also includes more than 30 research interviews with HR and talent management professionals.

According to the research, the most important elements of a recognition program for employees are the ability to receive specific feedback and give recognition easily. This finding is underscored by the fact that the top reason employees do not recognize each other is because there is no established way to provide recognition. Many companies are responding to this need by leveraging social technologies that enable employees to give and receive positive feedback with others in the network.

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