A simple guide to employee recognition

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min read
July 6, 2021
January 18, 2024
Why is employee recognition important
In this article

While earning money is still and will always be a prime motivation for working, more and more employees are looking to get something more out of their job.

Everyone likes to be appreciated. There is nothing more soul-destroying than seeing your hard work go unnoticed. We all want to feel good about our jobs, feel that we are making a difference, that our efforts mean something, and that we’re having a positive impact.

54% of UK employees say they have taken a lower paid role in search of happiness. Employees want to know what they are doing is both appreciated and valued. If they don’t get that they are prepared to go somewhere else to find it. 50% of employees say they would leave a company if they weren’t regularly thanked and recognised for their efforts.

This guide explores what recognition is, why it’s important and what employers can do to get it right.

What is employee recognition?

Recognition is acknowledging when an employee has gone above and beyond what is expected of them in their role. This acknowledgment can consist of anything from a few words exchanged in conversation or over email to a more formal employee recognition program that is made public to the whole team, department, or organisation. The bottom line is that employee realises their work has been noticed and appreciated.

Why is recognition important?

Recognition is vital for employees. It provides validation, encouragement, and motivation. 80% of employees say they are more motivated when they feel appreciated. It provides a lift that can significantly increase their happiness and personal wellbeing. Employees who feel invested in their workplace are more likely to build close connections, which makes them view work, their job and their employer in a more positive light.

Recognition for employers is important because it reinforces positive behaviour. Every employer wants employees who are prepared to go the extra mile. An easy and effective way to encourage people to do this is to let them know they are appreciated. It is something every employer can do, no matter what size or budget they have. Employee recognition doesn’t have to cost anything, a simple “thank you” goes a long way. 70% of employees say that motivation and morale would improve if managers said thank you more.

What are the benefits of recognition to employees and employers?

Building a culture where recognition is encouraged is immensely powerful. According to research from Great Places to Work, the most important thing a manager can do to encourage their employees to produce great work is to recognise their efforts. This ranked higher far higher than paying them more, offering training, or giving them a promotion.

Recognition is one of the main ways employers can demonstrate to employees that they are valued. In a survey conducted by the American Psychological Association, a massive 93% of respondents said that when they felt valued, they were more motivated to perform better and 88% said they felt more engaged. Engaged employees are worth their weight in gold. They are far more likely to be loyal, feel secure and happy in their workplace. Research has also shown engaged employees to be 31% more productive.

The act of giving recognition is also beneficial. Doing something that makes someone else happy has a positive effect that helps create a supportive and nurturing environment. Just as acts of kindness can boost mental health, giving recognition can have the same impact.

How does recognition contribute to employee satisfaction?

How happy an employee is in their work is determined by many factors – their pay and benefits, their work environment and their relationships at work are all important, but if they are to have true satisfaction, they also need to be recognised. Employees need to be rewarded for their work financially but rewarding them in non-financial ways is just as important. It is vital that they are appreciated to boost their self-esteem and self-confidence, knowing what they are doing is worthwhile.

Despite the clear benefits recognition provides and the minimal costs involved, employers are hugely underusing it as a strategy to improve engagement and performance. For example in the US, a Gallup survey found that only one in three employees say they have received recognition for doing a good job in the last seven days.

Recognition should match scale of achievement

While it is clear recognising employees is important, people differ in how and why they want to be recognised and who they want to be recognised by. The recognition given should be in direct proportion to the size and scale of the achievement. For a small act, such as covering a meeting for a colleague or sharing some useful insights, a simple “thank you” is more than enough. Three quarters of employees say they are satisfied with that for these types of everyday efforts.

For significant accomplishments, which have taken considerably more time and effort, employees expect more than words alone. According to the Deloitte report, The Practical Magic of “thank you”, 47% would expect to receive an opportunity for their own personal development and progression within the organisation. 33% would like some kind of financial rewards for their efforts, be that a pay rise or a bonus. 21% would expect to receive a high performance rating in their review. If employees have made a significant contribution, they expect to be rewarded for it in a tangible way – a “thank you” does have its limits.

Does recognition need to be linked to rewards?

Rewards and recognition often go hand in hand, but they should be viewed as two separate functions that can work in partnership. Recognition is about ensuring employees know their actions are being seen, that they are acting in a way that the organisation appreciates. An employee recognition programme does not have to result in rewards. It can be focused purely on employee development, providing more opportunities within the organisation for those who do an exceptional job.

Linking recognition to rewards can be effective, especially if the rewards are matched to what employees want and appreciate. Involving employees in the rewards programme, asking them what they would value can enhance engagement and provide powerful motivation. Some organisations can be especially inventive, offering everything from gift cards, free food and drink, special events, and merchandise, to personalised congratulations videos from the recipient’s favourite celebrity!

However, rewards programmes can turn toxic. If the same group of people are continually being recognised, if the rewards aren’t seen to be fair or if what is on offer simply isn’t appealing to a large section of the workforce, they can become divisive. Instead of being motivational they can have the opposite effect and have a negative impact on employee morale. To prevent this from happening, employee reward programmes should be regularly reviewed and carefully monitored. Rewards must be given out on a basis that employees think is fair and offer something that they want.

Who do employees want to be recognised by?

It is not just important to give recognition, it’s important that this recognition comes from the most appropriate person and that it is genuine. Having your line manager or your manager’s manger recognise the efforts you made is enormously valuable. Not only does it show that they have noticed what you are doing, it also shows that you are more than just a cog in the machine and you have the ability to stand out from the crowd. According to the Deloitte research, 37% prefer recognition from the leadership level above their direct line manager, 32% prefer it from their line manager.

While recognition from those more senior is appreciated, employees also want the people that they work most closely with to appreciate their efforts. The value of peer-to-peer recognition is enormous. In general, the bond between colleagues is stronger than between themselves and their manager, so any recognition they receive from those who know them best means a lot. This type of recognition encourages better collaboration and communication within an organisation.

What do employees want to be recognised for?

Employees want to be recognised for the major successes, such as winning a large new client or increasing sales. They want the work they’ve put in to be acknowledged even if there isn’t something immediately obvious to show for those efforts. For example, complex strategic projects to reposition an organisation or to transform its culture will often take years to organise and bear fruit. Similarly, employees want the knowledge they have taken the time to develop to be acknowledged too.

According to the Deloitte research, 40% want to be recognised for their success, 24% would like to be recognised for their knowledge and expertise, 20% for the effort they put in and 16% for living core values.

Recognition and performance management

Effective performance management is about helping employees to reach their full potential. It is about focusing them on achieving objectives that enhance their own development and align with the aims of the organisation. Recognition can play an important part in this process.

If an employee is receiving recognition for what they are doing well, for the effort they are putting in and for living up to the values of the organisation, they are more likely to feel motivated and engaged. Conversely, if they are not receiving this appreciation, it can be highly demoralising. If they believe their efforts are going unnoticed, what incentive do they have to do more than the minimum required? 38% of UK employees believe that without the necessary appreciation they can’t develop their talents properly.

How to get recognition right

Recognition can be a powerful tool but getting it wrong can have serious and extremely negative consequences. Here are our tips for ensuring recognition is beneficial to your employees and your organisation:

  • Create a clear framework and guidelines around what employees should be recognised for so that everyone knows what the criteria is. Many organisations tie this to their values to ensure employees not only understand these but actively live up to them too.
  • Include employees in the discussion around what behaviours and actions should be recognised, so they are involved with the process from the beginning and understand the objectives of the recognition process.
  • Recognition works best when it is personalised and tailored to the individual. Ensure line managers have a discussion with their employees about the way they would like to be recognised. For some, this is a very private process, and they would prefer it kept between themselves and their manager. Others are happy to embrace something more public, shared widely across the organisation.
  • Give line managers training around recognition, why it’s important and how to deliver it. They need to understand how motivational it can be and how it needs to be based on merit relating to objective criteria. If employees feel recognition is biased or unfair, it can rapidly turn toxic.
  • Introduce a mechanism that everyone in the organisation can access easily to give recognition easily and quickly. Having this in place will ensure employees feel empowered to give recognition whenever and to whoever they think deserves it.
  • Regularly monitor and review the process to ensure everyone understands it and is as involved as possible. Identify those that have not given any recognition and reach out to them to understand what the barriers might be.
  • Survey employees to understand their views on how the recognition process is working. Ask them for their ideas about how it could be improved or amended to ensure it remains as useful and relevant as possible.
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