Acknowledgment is one of the most powerful, yet misunderstood, misused and untapped energies available to us.
Recent research shows that acknowledgment in the form of employee recognition, for example, has direct and unmistakable impact on a business's profitability.
A study conducted by The Jackson Organization included 26,000 employees at all levels in 31 organizations of varying types and sizes.
In addition to other questions, employees were asked to state to what degree they agreed with the question: "My organization recognizes excellence," another way of saying, "My organization acknowledges and appreciates me."
These responses were statistically analyzed and then compared with three profitability measures: return on equity, return on assets, and operating margin (The Jackson Organization, Employee Recognition and Profitability: Making the Connection .)
Acknowledgment and Return on Equity
Return on Equity is a critical measure that encompasses profitability, asset management and financial leverage. According to the data, companies that effectively recognize excellence [appreciate employee value] enjoyed a return on equity more than three times higher than the return experienced by firms that don't. (The Jackson Organization, Ibid.)
Acknowledgment and Return on Assets
Return on Assets is a measure of a firm's effectiveness in using the assets at hand to generate earnings. According to the data, companies that effectively recognize excellence enjoy a return on assets more than three times higher than the return experienced by firms that don't. (The Jackson Organization, Ibid.)
Acknowledgment and Operating Margin
Operating Margin is another measure of an organization's efficiency. In general, businesses with higher Operating Margins id to have lower fixed costs and better gross margins. According the data, companies in the highest quartile of agreement with statement, "My organization recognizes excellence," reported Operating Margin of 6.6%, while those in the lowest quartile only 1%. (The Jackson Organization, Ibid.)
The researchers concluded their study by saying: "Companies that effectively Acknowledge excellence enjoy a return that is more than triple the return of companies that don't." |
