10 Truths of Employee Recognition Every HR Leader Should Know

Recognition plays a pivotal role in many areas of an organization. Retaining talent, boosting productivity and engagement, and driving performance are just a few of the many powerful benefits.  

Employee recognition continually comes up as a key solution for many challenges organizations are faced with today. We don’t need to prove this, it’s a fact – employee recognition helps drive organizational performance and improves business outcomes.  

Let's explore 10 undeniable facts about employee recognition.

1. Employee recognition enhances company culture

To gain a competitive advantage, organizations must comprehend the impact of building a culture of recognition, and the impact that has on the overall employee experience. In a recognition culture, employees are aware their contributions are genuinely valued by their company.  

A culture of recognition builds trust, security, and a heightened motivation to continue delivering exceptional work. Employee recognition enhances workplace culture, engaging and inspiring employees to perform at their best.

While the specifics of employee recognition may vary across industries, understanding how to strategically implement it and build a culture of recognition can have a profound impact on your business.

2. Employee recognition leads to better engagement

Since the rise of remote and hybrid work, many organizations have struggled to keep employees engaged and connected. Engaged employees are highly motivated and more productive because they know their organization values them and their needs are being met.  

Employee recognition is continually noted as a top driver for employee engagement. According to Quantum Workplace, employees who are recognized are 2.7 times more likely to be highly engaged. A highly engaged workforce leads to higher productivity, better performance and improved business outcomes.  

3. Employee recognition improves well-being

Stress is a major contributor to decreased productivity, motivation and overall well-being – nearly 1 in 5 workers have quit their jobs due to stress.  

Recognizing and valuing employees' efforts plays a vital role in nurturing the overall well-being of your workforce. When team members are genuinely appreciated and praised for their hard work, it not only elevates their self-assurance but also alleviates stress. Including recognition in your culture strategies fosters an environment where employees are happier, healthier, and more productive.  

Ensuring employees have a safe space to voice how they are feeling is vital. For example. Kudos' Sentiment Survey provides valuable insights about employee well-being in your workplace, allowing leaders to assess the overall employee sentiment in the moment and over time.  

4. Employee recognition improves retention

There are many reasons why someone chooses to leave their job – burnout, lack of growth opportunity, and lousy culture are just a few of many reasons. Turnover has a tremendous financial impact on an organization. It’s estimated that turnover costs 33% of an employee’s annual salary.  

Employee recognition can help lower turnover and help address the pain points that are causing your best talent to leave. Regular recognition fosters a positive and supportive work environment, enhances employee satisfaction, and strengthens bonds among coworkers, leading to reduced turnover and a more engaged workforce.

5. Meaningful recognition is more impactful

In companies where an effective recognition system is in place, employees are five times more likely to feel connected to the company's culture and four times more likely to be engaged in their work.  

Recognition should always flow freely, but when your message is truly meaningful, it will have the most impact. While a simple "thank you" is always appreciated, establishing a formal employee recognition program where meaningful recognition tied to your corporate values can easily flow throughout your organization will have the most impact.

Learn how to write a meaningful recognition message in our Recognition Your Team Will Love Culture Guide.

6. Rewards must be paired with recognition

Employee rewards create an environment that fosters short-term motivation, loyalty, productivity, and, ultimately, business success. They can be a powerful motivation tool – rewards can be tied to goals and milestones, and encourage employees to reach new heights. However, for employee rewards to be impactful in today’s workforce, they must be personalized and paired with recognition.  

The key to an effective employee rewards program that can elevate recognition, is providing flexible reward options that satisfy everyone’s preferences. Personalized rewards that align with employees' needs and values will have a greater, transformative impact on your culture.  

7. Employee recognition reinforces values

Most employees either don’t understand their company’s core values, or don’t know them at all. An employee recognition platform that reinforces your core values, like Kudos, ensures your values are being demonstrated throughout all levels of your organization.  

Employee recognition serves as a powerful reminder to organizations that everyone plays an integral role in upholding and embodying the company's core values. Through effective recognition, employees grasp the significance of their achievements within the broader context of the organization's mission. Even during times of change, employees feel secure and content, knowing that their contributions are appreciated and impactful.

Learn how Oliver+, a Kudos client since 2021, has transformed their company culture by ensuring its values are being demonstrated at all levels of the organization.

8. Appreciation is a basic human need

Abraham Maslow theorized in the hierarchy of needs that for human beings to be motivated to make decisions, they must feel appreciated. Appreciation is included in many levels of Maslow’s pyramid – it can be found in the need for love and belonging, esteem and self-actualization.

Employee recognition fulfills people’s need for appreciation. Being recognized for contributions helps employees understand the value they bring and that their work has a purpose. Without recognition, employees can feel undervalued and unmotivated, and can start to resent the organization they work for.  

9. Employee recognition increases motivation

Employee recognition directly impacts motivation – when employees are recognized, they feel more motivated to do great work. It affects drive, productivity, wellbeing and the overall performance of the organization.  

When employees witness recognition being given to their colleagues, it also serves as a powerful motivator to engage in more recognition themselves. When we receive recognition, it activates the reward center of our brains and automatically produces motivational thought patterns. By making recognition a workplace habit, employees feel more motivated to contribute value to their organization.

Recognition is a powerful motivator – here are 25 inspirational quotes to help motivate your team.  ‍

10. Employee recognition improves customer satisfaction

When employees feel valued and appreciated, their motivation to perform at their best soars. For those employees who directly interact with customers, this translates into providing exceptional experiences that clients cherish and remember. One study confirmed that companies boasting at least 50% employee engagement retain over 80% of their customer base. This exemplifies the profound impact of employee recognition.

Renowned author and speaker Simon Sinek once said, "There's no CEO on the planet who's responsible for the customer. They're just not. They're responsible for the people who are responsible for the customer." To ensure your customers remain satisfied, prioritize the happiness of your employees by recognizing their contributions.

Employee Recognition Matters

Employees seek workplaces that unlock their full potential, invest in their growth, acknowledge their achievements, and cultivate a positive workplace environment. With continuous HR challenges and shifting employee expectations happening worldwide, employee recognition is a beacon of hope for businesses seeking to thrive.

When meaningful recognition becomes an integral part of your company's culture, you gain a competitive advantage and set the standard for what truly makes a workplace exceptional.

Your employees are your most valuable asset. Kudos is here to be your technology partner in creating an exceptional culture where employee recognition is the foundation of a highly engaged and thriving workplace.