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Retention
Why Employee Recognition Is Important And How To Do It Right

According to Gallup, one of the top reasons that employees leave workplaces is a lack of employee recognition. Let that sink in for a moment. If your team is losing talent, and you haven’t been able to figure out why, employee recognition could be something to address. 

Recognition is a key motivator for any sort of human behavior, especially in the workplace. As employees, we might expect that our hard work will be rewarded—possibly in the form of promotions, bonuses, increased responsibilities, or other tangible rewards. 

Yet it goes beyond that when it comes to what really motivates employees to succeed, and recognition does not need to cost a dime. 

The best part of employee recognition is that it’s easy, and fun. There are multiple forms of recognition, and every employee looks for something different, but ultimately even a simple ‘thank you’ can go a long way towards improving your workplace retention and culture. 

This article will focus on taking a closer look at employee recognition, why it's so important, how it differs from employee rewards, and strategies for implementing a successful recognition program into your workplace. 

What is employee recognition?

Employee recognition is the practice of recognizing employees for their good work and living the organizational values. This can take multiple forms, and have different purposes given different circumstances. 

For example, some workplaces will take measures to recognize employees simply when they complete an important task. This does not mean that an employee receives huge accolades simply for doing their job. A small, genuine gesture of recognition, such as a verbal ‘thank you’ or an email of acknowledgement, is much appreciated.

Employee recognition vs. employee rewards

Recognition and rewards are often confused, but there is a difference. Employee rewards are monetary tokens that are awarded to employees for their hard work, and maybe a direct result of their efforts.

If an employee closes a high-value deal for the business, they may receive a reward such as an enhanced bonus, a gift card, or some other form of monetary reward. These rewards are things of cash value.

Recognition, on the other hand, does not have a cash value. We may think of those old-fashioned ‘employee of the month’ plaques hanging on a wall, but employee recognition can be anything from a verbal acknowledgement to a mass email to a shout-out in the latest employee newsletter.

Why is employee recognition important?

why is employee recognition important graphic

At the root of everything, employees want to be acknowledged and valued for their contributions. They also want to know that their managers or their teammates recognize when they go above and beyond their role.

The Society for Human Resources Management says that 79% of employees work harder due to being recognized in the workplace. 

So why is recognition so important to a successful workplace? A large part of the answer is based on value. While recognition is an important motivator, more than that it makes a person feel like a valued member of their team. Taking the time to acknowledge someone’s efforts shows that you value their contribution. 

Happy employees translate into a happier and more productive workplace. Research from the University of Warwick shows that happier employees are 12% more productive and that employees are less productive when unhappy.

Enhanced recognition is not only beneficial for employees, but it benefits their managers as well. Almost 90% of employees indicated that they placed more trust in their bosses who took the time to recognize them, vs. less than half of all employees who did not feel that they were recognized for their efforts. 

Recognized employees are engaged employees, and engagement is key to workplace success. Those employees who receive proper recognition realize that they’re not simply nameless pieces of a puzzle or a cog in the machine.

They hear that they matter, and that their work matters, and that motivates them to stay and contribute more to the company. 

How does recognition support employee retention?

It’s a common misconception that employees need rewards to stay motivated. Sometimes a simple workplace recognition program is all that it takes to turn the tide and encourage employees to put in their best effort or beyond.

According to research, 91% of employees say that a strong culture of recognition will motivate them to work for a certain company. 

If an employee has a choice between two roles—one at a company where they know that their efforts will be recognized, and the other at a company where their superiors may not even know their name let alone recognize their efforts—it seems obvious as to which employer they might choose. 

In a climate where companies are competing for talent, and employee turnover is a perennial concern across most industries, a recognition program may be one of the most effective tools in helping great employees stay, and will only serve to make your workplace more effective for those considering joining the team.

Related read: the employee lifecycle: how to develop and retain top talent.

How to ensure employees get properly recognized?

The most certain way to ensure people get properly recognized in organization is to create a culture of recognition.

This starts from the top, from managers, who set the example by scheduling time to recognize their team members, preferably publicly, for their contributions. They then encourage team members to recognize each other publicly too. 

It might take a little while, but if leaders are consistent then, over time, a culture of recognition will form.

How to build your employee recognition program?

Creating a culture of recognition is not entirely without its challenges. How should you properly recognize employee performance in a way that befits the employee’s effort? 

In a world where an entire generation grew up earning participation ribbons, how do you properly give credit to those who go above and beyond?

Start by looking at what you’ve already got

First, look at what exists within your current workplace culture and what might integrate well. What measures do you have in place for tracking when employees exceed their goals or KPIs? Your team might benefit from having a rewards program as well, or both a recognition and rewards program depending on the nature of the work.

Do you have an internal mechanism that can help with your recognition program, like a newsletter or an internal messaging system (Slack, Teams, etc.)? 

Also, remember to include everyone from rainmakers to support staff. Everyone deserves to have their efforts recognized, and will feel better for it. 

Keep an eye on the calendar 

For recognition to be effective, it should be done in real-time (or as quickly as possible). Quarterly or annual announcements do not have the same impact as a true acknowledgement in the moment of someone’s efforts. Frequent, regular recognition will inspire employees to work as hard as their coworkers to reach those same heights. 

Lastly, shout your praise from the rooftops

Ensure that recognition is public so that each team member can recognize their colleague’s achievements, and be inspired by their good work. 

If you can make the recognition visible outside the company too, even better. For example, one airline puts its employee of the quarter on the side of a plane!

What are fun examples of employee recognition?

Employee recognition is a way to inject some fun into the workplace and show off your company culture and personality, so I thought I’d end with some example ideas.

image of fun example of employee recognition

The Dundies (DIY Awards Ceremony)

Not every idea you have needs to be a ripoff of The Office but, in this case, it may not be the worst idea. A dedicated reward ceremony (with a bar tab) is a great way to bring teams together to recognize earth other for their achievements.

Have some fun with the awards too! Along with genuine praise, give out a few gag awards that highlight the personalities on your team.

Most Improved Parking Spot

If you work at a large enough facility where parking alone is an issue, recognize employees by upgrading their parking spot. It may seem like a small gesture, but a better, reserved spot can serve as a status symbol and give employees something to work towards.

If better parking isn’t an option, take a cue from the Simpsons and consider a pair of roller skates to ease their commute to the door. 

image of most improved parking spot

A Day at the Races

Think about how to offer employees experiences. It doesn’t necessarily have to be a racetrack, but a day out of the office can do a lot to recognize employees and boost morale. You may want to consider a team building activity, or even make it a day just for fun.

If not the ponies, look into local activities like an amusement park, arcade, zoo, bowling alley, go kart track, or even a rage room (leave the photos of the bosses at home for that one). If it’s just a fun activity, consider letting staff bring partners and children. 

Or, if you want to make employees really happy, consider allowing them a bit of time off. Either one day, or a few days, the recognition of their hard work can easily come in the form of paid time to rest and recover. 

Hire a Skywriter

Employee of the month plaques still work, but there are new ways of telling employees you appreciate them.

If the skywriter is a little much, think about posting on the company social media channels. A Facebook post, LinkedIn post, or a Tweet with that person’s name attached to the company’s brand is incredibly powerful, and shows that you’re not afraid to show employees how much you value their hard work. 

Further examples: 4 Fun Ways To Showcase Your Personality Through Employee Recognition

Final Thoughts on Employee Recognition

Employee recognition is important to the health of a business and the company culture. It’s also easy to implement and can cost little, or nothing at all, to show employees appreciation for the work that they do. 

These simple touches boost employee morale, and a happy employee is one that tends to stay for the long term. 

For the human resources professional looking to spice up employee recognition, there are great resources available online with further recognition program ideas, and statistical insight as to how employee recognition programs can benefit the overall business. 

Some further resources to help you nail employee recognition:

By Tim Reitsma

Tim is the co-founder and General Manager of People Managing People, an online publication focused on building a better world of work. He is experienced with people & culture, leadership, business strategy and operations with a focus on building great teams who are excited about their craft and their organization. With over 15 years of leadership experience, Tim has always been guided by his core values: faith, family, curiosity, and fun. He is a coach, mentor, speaker, advisor, and an active volunteer in his community. Tim loves spending time outdoors with his wife and two kids as well as mountain biking in the north shore mountains.

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