How to Make Employees Feel Valued (and What Happens if You Don’t)

A recent Gallup report found that employee engagement in the US was at its lowest point in a decade—citing unclear expectations, a lack of strong relationships, and poor development opportunities as common culprits.

Poor morale and disengagement can start to have a negative impact not only on employees, but the business as well. The American Journal of Preventative Medicine estimated that disengagement and burnout will cost an average 1,000 person company in the US more than $5,000,000 in lost revenue.

So, how do you maintain morale and help your employees feel valued? Read on for some of our top tips to help you communicate how much you value your employees.

What do employees mean when they want to feel valued?

As humans, it’s our nature to want to feel loved, cared about, accepted, supported, and included. We seek this sense of value constantly, including during office hours. Often, the simple response to this need from a leader is a simple (and admirable) thank you, whether in writing or verbally.

But making employees feel valued isn’t just about kind words, thankyous or shoutouts—although recognition like this can be effective too. Employers must demonstrate employees’ value with other, more tangible things such as:

• Fair base pay
• Performance-related pay
• Paid time off
• Benefits
• Autonomy
• Work/life balance
• Meaningful work
• Job security
• Career advancement opportunities

If these foundational elements are missing, then face-to-face gratitude or handwritten notes may not make the difference. By focusing on the things that employees truly value, your organization sends a clear message that it cares about its people. And that message is at the heart of making employees feel valued.

What happens when employees don’t feel valued?

When employees don’t feel valued at work, it can create a dangerous cycle where little to no recognition leads to tension in the workplace and disengagement. Studies show that disengagement leads to:

• 37% higher absenteeism
• 49% more workplace accidents
• 60% more errors and defects

Unhappiness and disengagement can bring health consequences as well, such as stress and anxiety. Research suggests that workplace stress can lead to an increase of almost 40% in voluntary turnover. Making employees feel valued is hugely important to the health and outlook of your people and business, so it’s important to start making the right changes today.

Are valued employees more productive?

Encouragement and recognition go a long way. Workplace recognition could make employees feel valued and motivated. This ultimately boosts individual engagement, loyalty, and productivity. When we feel supported and cared about, we feel more empowered to put our best foot forward. The workplace is a two-way street—when one side gives, the other side gives back.

How to make employees feel valued at work

Starting with these five strategies will ensure you build a solid foundation for your organization’s employee experience, so employees will know that they really are valued (and that it’s not just lip service).

1. Develop a compensation strategy

The most surface-level indicator of how much an organization values an employee is how much that employee is compensated. So, your compensation strategy really matters.

Your organization should understand where it fits within the job market and where employees land on the compensation scale for their positions. The best compensation plans should answer these questions:

• What talent markets do you intend to use for comparison to your organization?
• What are your organization’s competitive limits?
• Which behaviors do you want to reward with your compensation dollars?

The first question helps you set your compensation range according to the rest of your talent market.

The second question addresses your organization’s limits in practical terms. As nice as it would be to pay that top candidate exactly what they’re asking for, you need to make sure your company can truly afford it—and not just financially.

Finally, the third question helps you hone your compensation management strategy so you know exactly what behaviors you’re rewarding (and thus encouraging people to emulate).

2. Communicate compensation and benefits

How you have compensation conversations is just as important as the compensation strategy itself. Perception plays a huge part in employee satisfaction; if your people understand why they’re paid the way they’re paid, that alleviates the stress of guessing, wondering, and assuming the worst.

Even if you’re paying lower than market rate in terms of compensation, communicating effectively about it can leave employees more satisfied than if they’re not being told the full story about their pay.

3. Provide growth and learning opportunities

Another way to help employees feel valued at work is to invest in their development. This investment doesn’t have to be expensive. In fact, some of the best employee development initiatives don’t cost a dime. Here are a few ideas for helping employees learn and grow that you can get started with now:

• Peer learning groups
• Manager one-on-ones
• Stretch projects
• Dedicated learning time
• Career planning
• Internal hiring

Encourage managers to step into a coaching role for their employees by setting up regular one-on-one meetings and identifying each employee’s goals. This knowledge will help you tailor learning and development opportunities for each person.

4. Align employee performance and compensation

As employees grow and develop, they will become more efficient, more skilled, more knowledgeable, and better at their job. They won’t be the same people your organization first hired, and the compensation your organization offers them should reflect that growth.

That’s why it’s important for your compensation strategy to include a plan for re-evaluating compensation and aligning it with employee performance.

Rather than basing raises on who can negotiate most effectively or who has been around the longest, you should tie compensation to performance. This will help employees understand that their future at your organization is linked to their growth and high performance as individuals.

But you shouldn’t wait for a high-performing employee to come asking for a raise before you consider the idea. Make sure your organization is proactive in rewarding top talent so they stay engaged all year long—not just when it comes time for the annual compensation conversation.

5. Provide meaningful work

This last strategy for making employees feel valued is the least tangible, as it concerns employees’ emotional need for meaningful work. Gallup identified this as a key element of engagement; however, their research showed that only 32% of US employees feel strongly connected to their organization’s mission or purpose. When managers help employees understand how their work contributes to organizational goals, employees are 3.5 times more likely to be engaged.

Managers and executives can help employees make this connection by recognizing great work at every level, especially those positions that are less visible. For example, executives could host company-wide meetings and invite various teams to present their wins and goals. Not only does this give greater visibility into each department, but it also sends the message that each team is a key piece of the puzzle.

Mistakes to avoid

As vital as it is to understand what strategies to incorporate into the workplace, it’s also important to know what to look out for as you create a culture of value and engagement. There are two things you should avoid:

1. Incentives and rewards that don’t matter

Free lunches and gift cards are great and can make employees feel happy, but they won’t bring long-term benefits if these gifts don’t mean very much to them. Incentives and rewards should provide real value to the employees’ personal and professional lives.

So, get their feedback on which activities or items could provide that kind of value. Maybe it’s an onsite gym or extra time off for community service. Use perks that matter to them.

2. Unhealthy competition

Some employers think that fueling a competitive culture boosts engagement and recognition. What they fail to realize is this can create an environment driven by self-interest; it hinders collaboration, communication, and morale.

Soon enough, this leaves employees feeling dissatisfied and undervalued. Instead, craft a culture based on teamwork and encouragement. When people help each other out, they’ll recognize the value they bring towards one another and rise up together.

Focus on healthier, more relevant ways that increase employee value without demonizing coworkers or undermining their efforts.

The importance of valuing employees in the workplace

Making employees feel appreciated and valued at work can’t be a one-and-done effort. Rather, it should be an ongoing attitude and approach to how your organization operates. Both formal initiatives (like providing development opportunities) and informal initiatives (like outlining meaningful work) can help employees feel like an important and valued part of your organization. And when people feel valued, they create value.