February 12, 2024
January 25, 2022

Understanding the Psychology of Employee Recognition

Employee Recognition for a Modern Workforce
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When you think about employee recognition, your first thought often isn’t the psychology behind it. You might think of the mechanics of recognition, such as how often you should recognize, how you should recognize, what you should recognize for, and what rewards you can offer for fantastic work. The mechanics are important, without a doubt, and perhaps it goes without saying that recognition has a positive impact, but what exactly is happening in the brain when you recognize someone?

Let’s dive into the psychology of employee recognition and how it has real, powerful, and tangible psychological and physiological effects that can boost your mood, improve productivity, and engender greater trust.

What Are Some of the Theories of Motivation?

To understand what’s going on in the brain during recognition, we need to understand a little bit about how humans work. Even if you already know how important employee recognition is, you may be struggling to figure out what motivates your team. Not everyone is motivated by the same things, and it can be difficult to figure out how to motivate different types of people. That’s where employee motivation theories come in. Understanding these theories can help you effectively motivate your team in different ways.

Below are a few of the most common motivation theories in management. 

Incentive Theory

Incentive theory is an employee motivation theory that suggests people are motivated by external rewards and reinforcement. Many theories suggest that we are pushed by internal motivators, whereas incentive theory suggests that individuals are instead pulled into action by the desired incentive. In the workplace, examples of incentive theory can include pay increases, a bonus, promotions, additional PTO, and more. 

Competence Theory

The central idea behind competence theory is that people are motivated by activities in which they feel competent and/or capable. Some employees are motivated by being able to display their knowledge, skills, and abilities in front of their peers. This motivation may lead them to share their knowledge with others in order to receive recognition. 

Mcclelland’s Three Needs Theory

David McClelland was a Harvard professor who spent thirty years conducting research on motivation. His theory suggests most people are motivated by one of three needs: the need for achievement, the need for power, or the need for affiliation. By understanding the Three Needs Theory, managers may be able to identify different employee needs and help correctly motivate each individual based on their specific needs.

Maslow's Hierarchy of Needs

To understand what’s going on in the brain during recognition, we need to understand a little bit of how humans work. Maslow’s hierarchy of needs is a foundational psychological theory that can help us understand human behavior a little better.

Every person has needs that must be fulfilled in order to live a happy, productive life. Maslow called the pinnacle of his hierarchy (or pyramid) “Self-Actualization,” or that true sense of achieving what one was made for. According to this theory, you can’t achieve self-actualization unless you have all your other needs met—in other words you can’t become your best self unless the foundations of your pyramid are built. Once you have the base layer down, you can move on to the next, and the next, and so on.

Maslow’s hierarchy of needs is as follows:


The most basic of human needs for survival, this is the first layer of the pyramid. Physiological needs such as food, water, clothing, and shelter fall under this category. Without these needs met, you can’t move on to the others and continue in your journey of personal growth. Think about the times you’ve been hungry, or cold. Can you really focus on anything else when that happens? It’s pretty hard.


Once your physiological needs have been met, you can move on and focus on your safety needs. These include physical and emotional security. Do you have a safe place to go that will protect you from danger? Do you feel emotionally safe wherever you are? Feeling safe is an important need that often goes overlooked—especially the emotional aspect.


As your basic physical needs are met and you feel safe in your life, you can focus on social needs such as relationships, friendships, social support, and social growth. Social needs are psychological needs, meaning they aren’t necessary for physical survival (though that point can of course be debated).


Building further on your foundations of basic needs and psychological needs, esteem needs come next. Feeling accomplished, feeling noticed (or, shall we say, recognized), and feeling appropriately challenged are what builds esteem in one’s capabilities.


The summit of your personal growth, self-actualization is when you achieve your full potential in life. This can be through creativity, expression, achievement, or any sort of accomplishments. Self-actualization looks different for everyone, but it cannot be achieved unless your other needs are met.

Maslow’s hierarchy is not a hard and fast rule (that’s why they call it a theory) but there is certainly some truth to it. Now that you’ve read through our little classroom chat, you might be wondering: how does this relate to recognition?

Recognition Fills Basic Needs

Recognition, it turns out, helps meet 3 out of the 5 basic human needs—which is pretty incredible considering most things in life fulfill one, maybe two.


You might not think that recognition has much to do with feeling safe, but consider someone that is working hard and yet still worries about job security. They might be living in constant fear that their job is in jeopardy. Recognition can change that in an instant and can bring a sense of security that was absent before.


One incredible thing about recognition is that it actually strengthens relationships and fosters better collaboration between teams. When recognition is given, it helps reduce stress and stimulates part of the brain that boosts trust (more on that later).


When recognition is given in a work environment—or any environment—it engenders feelings of accomplishment. Knowing you did a good job, and knowing that others think you did a good job too, is an important aspect of esteem. Recognition fulfills that.

So we’ve talked about how recognition fulfills many basic human needs and can have a big impact on a person. That impact is widely known. Say thank you to someone and their mood—and yours—is boosted. That’s not hard to understand. But what’s going on in the brain when that happens? Is there a physical thing we can see that can help our understanding of the benefits of recognition? Turns out there is.

How Does Recognition Work in Psychology?

It’s not too much of a stretch to say that recognition is much the same as giving someone a compliment. When you compliment someone, or recognize them for something, there’s an actual physical response in the brain. Recognition is no different. When you recognize someone, which is essentially giving them a compliment, several key things happen:

Reduced Amygdala Activity

The Amygdala is a small part of the brain often referred to as the “emotional center.” Its responsibility is to help us process strong emotions. When someone experiences high emotional stress, the Amygdala lights up with activity. Generally, less activity in the Amygdala is associated with less stress.

Thankfully, recognition and compliments reduce Amygdala activity in the brain by releasing Oxytocin, a neurotransmitter associated with feelings of security, safety, and peace. Compliments and recognition release Oxytocin, Oxytocin reduces Amygdala activity, and that means less stress levels. And we could probably all use a little less stress in our life, right?

Stronger Bonds of Trust

One interesting feature of Oxytocin release from recognition is that it can strengthen bonds of trust between two parties—and, remarkably, this bond strengthens both for the giver and the receiver of the recognition. Recognition can lead to stronger relationships, stronger feelings of trust, and a better working environment as a result.

Better Retention of Skills and Learning

Recognition and compliments boost something called “skill consolidation” that helps people learn tasks at a faster rate and helps them retain the information longer—even when they’re not specifically engaged in the task. Skill consolidation is a valuable tool because it can increase productivity, and there’s almost no better way to improve skill consolidation and performance than through giving recognition.

What Are the Different Types of Recognition?

Now that we know some of the motivational theories for employees, the psychology of employee recognition, and where recognition fits in the hierarchy of human needs, what are some of the most effective types of employee recognition? This is by no means an exhaustive list, but they could be implemented into your own employee recognition program and, as we’ve seen, it is something we've seen increase the effectiveness of recognition across the board.

Celebratory Recognition

This is the lowest barrier to entry into the goodness of recognizing others because EVERYONE deserves to be celebrated. If you think about it, we do this kind of thing regularly in life: we celebrate birthdays, holidays, anniversaries, and other special occasions that come up. Why? Because celebrating is a chance to take a load off, enjoy time with friends and family, and enjoy what makes life great. Celebratory recognition can be as simple as a "Hey Nancy, I saw that today is your birthday! Happy birthday!" or as complicated as a surprise retirement party for a beloved friend. As far as the workplace goes, we recommend at least three celebrations each year for every employee: birthdays, service milestone anniversaries, and employee appreciation day (it's March 5th, in case you didn't know).

Spot Recognition

This is highlighting people for good work, and doing it on the spot. Did your coworker just crush a presentation? Did your teammate complete a month's-long project that took a lot of coordination and effort? Did your friend just compete in a triathlon and you want to celebrate their accomplishment? There's no better way than timely, specific peer recognition, directed recognition. This can be done verbally, in writing, or digitally on platforms like Awardco's, and it doesn't even need to include money to be meaningful.

Rewarding Recognition

This employee recognition strategy recognition recognizes and rewards high-performers. Similar to spot recognition in that it needs to be timely and specific, rewarding recognition is for those employees that go above and beyond to create value that deserves to be recognized AND rewarded. Recognition alone has a powerful influence, but when paired with a meaningful reward, it can be even more powerful. Our research shows us that the companies with the highest-performing employee satisfaction programs have at least one rewarding recognition program initiative. 

Incentivized Recognition

This is a useful tool in your belt for when you'd like to encourage certain behaviors in your workforce through an incentive program. Sales teams often thrive with incentivized recognition and the inherent competition that comes from it. This type of recognition is especially useful because employees can participate in their own recognition and rewards by earning them through completing certain tasks.

Value-Driven Recognition

This is a strategy of recognition that ties your company values to certain behaviors. For example, if someone really shines and exhibits some of your company values in the workplace, this should be recognized and tied back to those values so the employee (and everybody else) can see how their behavior reflects what the company values most. This type of recognition is absolutely critical if you'd like to align employees more closely with what your company values the most.

More Than Just a Fuzzy Perk

Stop trying to decide if you should implement a recognition program—it's time to show your gratitude for employees' hard work. Recognition is so much more than just a fuzzy, nice-to-have, ditch-it-when-you-don’t-have-time-for-it addendum to your company’s employee engagement strategy. Recognition IS your employee engagement strategy. When you recognize your employees, you are strengthening bonds of trust, boosting productivity, and, perhaps most importantly, helping your employees feel safe, secure, and empowered to do their jobs. It’s not something you can afford to ignore—it’s science!

Schedule a demo with Awardco and start recognizing your employees today!