Despite the growing awareness about the significance of rewarding and recognizing employees for their good work and behaviour, several organizations might still not have such a program.

Such organizations stand to lose more than just the dedication and loyalty of their employees and can even risk suffering a significant dip in their business growth. The most significant disadvantages for organizations lacking a good rewards program are as follows:

1. Falling Employee Retention

The wide choice of job opportunities available to employees plus the increasing competition in the job market has already made the task of attracting and retaining talented professionals quite challenging for organizations. The lack of an appropriate recognition policy makes things even more difficult for an organization.

Best performing employees most often want their employers to acknowledge their achievements and appreciate their contribution to business growth. The inability of organizations to fulfil this basic human desire makes it extremely difficult for them to retain their best employees for long.


2. Drop in the Employee Efficiency and Productivity

When organizations fail to recognize their employees, they make them feel unvalued. Such employees start developing serious doubts about their professional performance and this, in turn, impacts their self-confidence and motivation levels significantly.

Consequently, there might be a considerable decline in their performance and efficiency over time which can impact the overall productivity and business growth. Such employees might be less committed towards project deadlines or even quality of deliverables.


3. Poor Collaboration among Employees

Employee recognition plays an important role in fostering better coordination and cooperation between the members of the workforce. As the employees are appreciated for their good work and achievements, they show a greater willingness to help and support their colleagues by sharing their knowledge and skills.

However, when the employees are not recognized for their efforts and contribution, they tend to become more withdrawn and uncooperative towards the other members of the workforce. Moreover, their reluctance to complete their work in time or to address performance issues also leads to poor workplace coordination.


4. Negativity and Discord at Workplace

In most cases, the frustration felt by employees about not being given due recognition by their employers is expressed in various forms.

Employees of such organizations tend to have frequent bouts of angry outbursts targeting their co-workers, develop a tendency to pick up fights, spread discord among team members or even indulge in badmouthing the organization. These negative behaviors lead to diminished trust levels and poor social interaction at the workplace which in turn impacts workforce efficiency.


5. Drop in the Employer Brand Value

The employer brand value of an organization helps prospective candidates to make an informed decision about taking up a job opportunity with the organization. Organizations lacking an efficient and effective rewards program for their employees tend to be perceived by prospective candidates to have lower employer brand value.

In fact, many experts believe the lack of employee recognition program can be a significant reason for organizations not to be able to hire good professionals.

There are several reasons that might prevent organizations from investing in a good rewards program for their employees. In most cases, these reasons manifest themselves in the form of various misconceptions that organizations tend to have.

Listed below are few of these most common misconceptions that prevent organizations from utilizing the benefits of a well-developed and properly implemented employee rewards and recognition program:


1. Too Expensive

Organizations often believe that rewards programs are quite expensive and can cause a major dent in business profitability. However, this is not correct as effective employee rewards and recognition programs can be designed with limited resources and budget.


2. Effort Intensive

Another common misconception is that reward programs are extremely time-consuming. There is only some truth to this statement as setting up a good rewards program requires a considerable investment of time and effort. Once a properly designed program is set up, it is easy to execute without much administrative and management overheads.


3. Irrelevant in the current context

Many organizations feel that employee recognition programs believed have lost their relevance in the wake of the current crisis resulting from COVID-19 pandemic. However, recognizing employees is more important than ever in the present situation.

In fact, it has become imperative or organizations to adopt new recognition methodologies to appreciate and acknowledge the efforts of their remote working employees and teams.