April 4, 2023
July 8, 2021

Insights into Why Employee Recognition is Important to your Business

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Employee Recognition for a Modern Workforce
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Why Is Employee Recognition Important?

“Recognizing and engaging people is not the soft side of business. It is the very basis of business success…and success in life in general.” (The Invisible Employee, page xix)

If you’re a manager or someone who manages managers, you want to pay attention to this one. Lack of recognition from management has a big impact on employee satisfaction. So tell the people around you that they did a good job. Providing positive feedback can be as simple as that...and it can make all the difference. 85% of employees are satisfied with a simple “thank you” for their daily efforts and accomplishments. A simple “thank you” (repeated often and with specific, individualized praise) can change your entire company culture.

What Are the Benefits of Employee Recognition?

Let’s look at the numbers. A Gallup study found that when employees are recognized regularly there is:

  • 81% lower absenteeism
  • 43% less employee turnover in low-turnover organizations
  • 18% less employee turnover in high-turnover organizations
  • 64% fewer safety incidents
  • 41% fewer quality defects
  • 10% higher customer loyalty and engagement
  • 18% higher productivity 
  • 23% higher profitability 

Look at those stats again. Aren’t these the things all companies strive for? Haven’t you been in countless meetings to talk about how to improve in these areas? All your metrics can be improved by recognizing your employees more. It’ll make your work environment better, improve employee retention, and increase employee engagement. So get recognizing! 

Why Does Employee Recognition Matter?

Employee recognition matters because it matters to your employees. In fact, it may be the most important thing to them. Even more than how much you pay them (though that’s important too). In a recent survey by Georgetown University’s Christine Porath, respondents said feeling respected was what mattered most to them. 

“Recognition is America’s most underused motivational tool,” says Richard Kovacevich, chairman and CEO of Wells Fargo.

The people who work hard behind the scenes often watch recognition or rewards go only to managers and top leadership. That’s not very motivating for anyone who isn’t a manager. So while recognizing managers and the visible top performers is good, it can cause those who aren’t getting recognized to feel bad about themselves.

Consider which employees haven’t been recognized lately. Go out of your way to notice different people. Often, the best workers are just quietly doing their job. They don’t ask for help, don’t require much attention, and don’t get caught up in office drama. Pay attention to the people you don’t have to pay attention to. How have they been making your life easier? Recognize them for that. 

How Does Recognition Impact Employee Engagement? 

Recognition can have a huge impact on your company culture.

“Feeling overlooked, ignored, and unappreciated, invisible employees fight back the only way they know how…by staying hidden in the corporate shadows, doing just enough to get by…and passing these techniques along to new hires.” (The Invisible Employee, page 7)

Often, when a company does well, management gets all the rewards and attention. So what happens next? Motivation and engagement goes down. Because why would you work hard for someone else to be rewarded? To put it simply, employees notice when they aren’t being noticed. And if they go unnoticed, they’ll stop working as hard. Because what’s the point?

A good manager will pass on recognition to the people on their team. You may think you’re over-recognizing, but there is no such thing. Just like eating or sleeping, people need to be recognized regularly to feel nourished in the workplace. The benefits of an effective rewards and recognition program cannot be overstated. In fact, many organizations with a great rewards and recognition strategy often see an engagement boost of nearly 2X AND a 31% reduction in turnover.

What Does Recognition Mean to an Employee? 

Let’s look at some more stats. 40% of employees in the United States state that receiving recognition more often would encourage them to do more work. 63% of appropriately recognized employees are highly unlikely to quit their jobs. Employee turnover can cost a company a lot of time and money, but perhaps more importantly, employees that are thinking about quitting their jobs aren’t happy or productive. Being recognized means they’ll spend more time working and less time thinking about how they wish they were somewhere else. 

Are your employees feeling overlooked? If you’re not sure, look over these questions that can help you see if an employee feels invisible. As a manager, ask yourself the following questions:

  • Do your employees know the team goals or company values? Are they inspired by them?
  • Have you recognized your direct reports in the last week as individuals, with specific positive feedback?
  • Are you giving tangible rewards regularly? For example: giving out service awards annually and other rewards throughout the year.

Put yourself in your employees shoes (not literally, that’s weird). Do their ideas get dismissed or under-appreciated? Is no one noticing their great work? The good news is the solution is easy. They won’t feel invisible if you start recognizing them. 

Why Do Employees Need Both Recognition and Appreciation?

Recognition and appreciation may seem like synonyms, but too often people set up employee recognition programs that don’t show real appreciation. For example, have you ever handed someone a certificate, trophy, or gift card without any other thought put into it? Employees don’t want to be recognized in a way that feels automated—there needs to be a personal touch. 

Automating your processes can help you remember to recognize people—and make your life easier—but customize it to the recipient. Adding that personal touch doesn’t have to be complicated. Recognize the individual how they like to be recognized. Giving someone a gift card can be a great way to recognize and reward them, but giving someone a gift card to a place they never go won’t be much of a reward. You can avoid this by letting them choose their own reward or by asking them what sort of things they like to do (or eat, or drink). 

Our challenge for you is to think of someone who hasn’t been recognized lately and go recognize them right now. Write them a note, compliment them on a recent project they worked on or task they completed, or give them some points in the Awardco platform with a message. You can improve your work environment today by simply recognizing the great work that’s happening around you!