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The importance of employee recognition: the valuable insights you need to know


December 4, 2023


December 28, 2023

Would you say everyone understands the importance of employee recognition in your organization? Do you consider your company a workplace with a culture of recognition?

The importance of showing gratitude and acknowledgment to employees is well-known. Actually, the lack of recognition of workers’ input and efforts is at the third spot on the podium of why people leave their jobs. Yet, it is not always applied or not in the correct format. What makes your team members feel valued for their work and contributions? Do you know the type of rewards and recognition they appreciate the most?

If you are one of our fellow readers, you know how essential it is for us to enable you to create a positive and thriving work environment. The deskbird app helps your staff embrace flexible work, but we also support you in promoting a people-first approach.

To do so, today’s blog post gives you a clear understanding of the massive role of recognition in the workplace. Thanks to key statistics, valuable insights, and essential tips, you’ll be ready to build an employee recognition program that matches your workforce’s expectations and triggers positive outcomes for your business.

The importance of employee recognition in numbers

The lack of recognition is the third reason people quit their jobs

Do you want to build an effective talent retention strategy? You better promote genuine employee recognition, which is critical to creating workplace connection, fulfilment, and retention. Not only does it show your staff you notice their work and are grateful for it, but it also significantly boosts morale and job satisfaction

Studies have shown that feeling valued is vital in a person’s decision to stay with or leave an organization. In fact, the lack of employee recognition is the third most common reason for workers quitting their jobs. Conversely, those who receive recognition are 63% more likely to stay.1

When individuals feel unrecognized, their engagement and productivity often decline. They then have two options: quiet quit but feeling miserable or send their resignation letter. Businesses implementing well-thought-out recognition programs tend to register lower turnover rates, as acknowledgment can foster a deep sense of loyalty and belonging among the workforce.

More than 1 employee out of 2 wishes for more recognition from their direct manager

The importance of employee recognition from direct managers is undeniable. It is pivotal to fostering an engaged workforce and a healthy teamwork atmosphere. Leaders actively acknowledging accomplishment help reinforce positive behaviors and cultivate an environment where their coworkers feel valued. This personal appreciation is essential, as it immediately affects job satisfaction and motivation. 

Although it positively impacts employees, a real issue is that one in two workers admit wishing for more recognition from their direct supervisor. This gap between the need for acknowledgment and its application can result in low morale and increased turnover. Therefore, highlighting the importance for leaders to prioritize meaningful recognition as an essential strategy in talent retention and overall organizational health is crucial.

83.6% of employees believe recognition plays a key role in their motivation to thrive at work

Feeling recognized and valued is one of the core needs of human beings, from our earliest days until our later days. Remember how proud you were each time you did something new and showed it to your parents. Of course, managers shouldn’t have a parenting approach with their team members. Yet, you get the idea. We all need recognition at every age of our lives. 

Studies confirm this point. 83.6% of employees affirm that recognition is a critical ingredient in their motivation to thrive at work because it validates their efforts and conveys a feeling of achievement. This acknowledgment from employers not only boosts their morale but also fosters a sense of belonging and purpose within the company. 

When people are praised for their hard work, they feel seen and appreciated, which fuels their drive to excel and exceed expectations. A culture of recognition is often more meaningful than financial incentives, as it directly impacts an employee’s emotional well-being and job satisfaction.

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Colleagues recognizing each other

The importance of encouraging each type of employee recognition

Manager-to-employee recognition: leading by example 

As we’ve just highlighted, employee recognition from direct managers is paramount for cultivating a supportive and motivating work environment. When leaders acknowledge their coworkers’ efforts and achievements, they provide essential feedback reinforcing positive behaviors and outcomes. Such recognition means a lot to team members, as it confirms that their hard work is noticed and valued individually. This can act as a powerful, uplifting effect. 

On this note, 40% of workers consider manager-to-employee recognition to have the most significant impact on how they feel in the workplace.2 Moreover, when direct supervisors provide recognition, it creates a sense of personal connection and validation, enhancing the manager-employee relationship.

Peer-to-peer recognition: belonging and feeling valued

Peer-to-peer recognition in the workplace plays a crucial role in building a supportive and cohesive environment. There is nothing worse than working with people who don’t see the purpose and value of your job and, therefore, don’t acknowledge it. However, when colleagues highlight each other’s efforts and successes, it fosters a culture of appreciation and community. 

This mutual recognition fulfills the intrinsic human need for belonging and feeling valued. Such peer validation enhances self-esteem and reinforces their sense of being an integral part of the team. This is essential for both personal and collective success. This melting pot of appreciation not only bolsters morale but also strengthens the social aspect of the organization, leading to increased collaboration, productivity, and job satisfaction.

Company-to-employee recognition: taking care of your backbone

We say it all the time: every workforce is the backbone of an organization. This reason alone justifies the importance of employee recognition as a business. While getting recognition from managers and colleagues is pivotal, having the work and efforts acknowledged by the company itself is equally essential. 

Thus, you must foster a culture of recognition that highlights the collective achievements and individual contributions. Displaying such corporate-level appreciation to your workforce gives them proof that their efforts are seen and integral to the business’s success. By making recognition part of your core values, you reinforce a culture of value and respect, which usually leads to long-term employee engagement and organizational growth.

Customer-to-employee recognition: receiving the most valuable reward

When learning about this topic, customer-to-employee recognition is less likely to be mentioned, if not forgotten at all. But we want to highlight this type of employee recognition as it is another way your staff can feel truly recognized, useful, and valuable. When customers express their gratitude directly to workers, it acts as a powerful statement of the quality of service and the impact of the employee’s job. 

For instance, a happy customer leaves positive feedback, mentioning the name of one of your team members. Taking a moment to compliment your colleague for outstanding service increases morale and reinforces a sense of pride and professionalism. This direct feedback from the consumer can boost motivation and encourage your staff to consistently deliver exceptional experiences, reaffirming their vital role in the company’s success.

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Employees congratulating each other
Employees congratulating each other

The best outcomes of enhancing recognition in the workplace

Rewards trigger motivation and engagement

When employees receive acknowledgment for their efforts with a reward (thank you note, bonus, public or private verbal appreciation, etc.), it creates a sense of fulfilment that enhances their investment in their roles. This personal gratification can deepen their commitment to the company and lead to a more emotionally connected and enthusiastic workforce. 

Moreover, the good thing about rewards is that it provides a palpable way to show your acknowledgment. Team members who feel valued and recognized, not only by their direct manager and their peers but also by the organization itself, tend to be more involved in their tasks and the business’s goals. This dynamic of recognition and reward nurtures a culture where people feel respected and appreciated, which is essential for sustained engagement and a thriving workplace atmosphere.

The undeniable link between employee recognition, happiness, and productivity

Employee recognition improves happiness in the workplace, which then enhances better productivity. The correlation between these three core aspects of a thriving workforce is undeniable, and recent statistics emphasize this statement. Recognition directly strengthens satisfaction and well-being, which are key triggers of employee happiness. In turn, happier employees tend to exhibit greater engagement and efficiency. 

For instance, a study by Oxford University’s Saïd Business School found that workers are 13% more productive when happy.3 Moreover, the Harvard Business Review reports that businesses emphasizing the importance of employee recognition have 31% lower voluntary turnover.4 Do you want to foster a more positive work environment and boost productivity? Then, making recognition a core pillar of your culture is key.

Recognition and reward boost talent retention.

As mentioned at the beginning of this article, a lack of recognition and appreciation is the third reason people quit their jobs. Recent statistics confirm the idea that promoting employee recognition in the workplace has a profound impact on talent retention. 

For instance, employees experiencing recognition practices are 69% more likely to stay by their employers’ side than others1. This number proves that recognition is not a nice-to-have but a strategic approach to retaining top talent. 

By acknowledging employees’ achievements and contributions, companies can significantly bolster loyalty, reduce costly turnover, and maintain a stable, experienced workforce committed to the organization’s success. Yet, showing gratitude and appreciation must be genuine. Otherwise, this might have a negative boomerang effect. We’ll talk about this important aspect further below.

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Employee celebrating his success

The significance of employee recognition among Millennials and Gen Z

Important facts about Millennials and Gen Z

Millennials and Gen Z represent the majority in today’s workforce, bringing a distinct set of expectations for the workplace. Key expectations from these two demographic groups include a strong desire for work-life balance, meaningful engagement, flexible work arrangements, and opportunities for growth and development. 

Both generations highly value purpose-driven work, where success is not just measured by income but also by its social impact and personal fulfillment. Immediate feedback and regular recognition are also important to them. To do so, a shift from traditional hierarchical structures to a more dynamic, supportive, and collaborative work environment is essential. Companies that adapt to meet these values are more likely to attract and retain talent from Gen Y and Gen Z.

Quiet quitting, the response from Millennials and Gen Z to a lack of recognition

When Millennials and Gen Z feel there is a lack of employee centricity and recognition in the workplace, they tend to quiet quit as a silent protest (if not quitting at all). This trend involves doing the bare minimum required by their roles, removing the additional effort and enthusiasm that goes unrecognized. Rather than outright resigning, they refrain from going the extra mile. 

This approach is a powerful message to express their desire for acknowledgment and meaningful recognition. It’s a passive but effective method for expressing their desire for a work environment that values and rewards their contributions.

The types of recognition and rewards Gen Y and Z value the most

Authenticity is a must with these two demographic groups. Millennials and Gen Z value genuine, personalized recognition and rewards that reflect their individual contributions and lifestyle preferences. 

They appreciate public acknowledgment, such as getting credit during team meetings, which provides social proof of their achievements. Professional development opportunities, such as mentorship programs or course access, resonate with their drive for career advancement and learning. Additionally, flexible working conditions and wellness perks improve work-life balance. Non-traditional benefits like extra time off and remote work options also stand out. 

Are you wondering how often you should show gratitude to your teams so that it’s not too much but not too little? Whenever you are grateful for something your coworkers have done. However, studies show that employees consider weekly and monthly recognition a reasonable frequency.

👉 Read our article about Millennials and Gen Z in the workplace to learn more about how to make these generations thrive!

The importance of promoting genuine employee recognition and avoiding toxic positivity

Stay genuine and do not fall into toxic positivity.

Toxic positivity is when companies and managers focus only on the positive and avoid discussing the negative. Highlighting this aspect is crucial as we always encourage a people-first approach. Yet, you shouldn’t overdo it or fake it. As we just said, authenticity is paramount. Forced recognition practices can be perceived as manipulative or patronizing, unfavorably affecting trust and morale.

Therefore, ensuring that recognition is deserved, specific, and aligned with real achievements is key to reflecting a truthful appreciation for individual contributions. Moreover, avoiding toxic positivity is imperative. Team members need to feel heard and advocated, even in challenging times. Authentic recognition cultivates a positive work culture that acknowledges the full range of employee experiences. It encourages a supportive environment that values sincerity and fosters resilience.

Establish an employee recognition program

Creating an employee recognition program is essential to ensure genuine appreciation for all team members, reinforcing a culture of acknowledgment and respect. A formalized program helps establish clear criteria for recognition, ensuring consistency and fairness across the board. For instance, it can be contract anniversaries, promotions, goals achievements, social contributions, etc. It can also indicate a baseline of how often workers should be thanked and recognized for their input into the company.

This structure prevents biases and favors, allowing every employee’s accomplishments to be recognized for their personal qualities. Transparent recognition processes also promote trust within the team and between staff members and management. It fosters a positive work environment where everyone feels valued and motivated to thrive in their role as they know their contributions will be acknowledged.

Remember the importance of informal and spontaneous employee recognition

Promoting informal and spontaneous forms of recognition is crucial in fostering a culture of continuous appreciation. These gestures, like leaving a personalized thank-you note on a team member’s desk, are immediate and authentic expressions of gratitude. They can significantly boost morale and reinforce positive behaviors among your teams. 

Such small yet meaningful tokens of appreciation are often memorable and can resonate deeply, strengthening the interpersonal relationships within the team. They complement formal recognition programs by ensuring that the acknowledgment of daily normal contributions is part of work life. Ultimately, this creates an environment where workers feel genuinely valued for their support and efforts.

Focusing on the importance of employee recognition is not just a nice-to-do practice. When done genuinely, it’s a strategic business move that can lead to increased productivity, higher morale, and lower turnover rates. A well-implemented culture of recognition can significantly impact the overall organization’s success. It creates a positive work environment and highlights employee efforts that support the company’s mission and goals. By encouraging acknowledgment and appreciation among your workforce, you not only foster a sense of mutual respect and belonging but also produce a ripple effect that boosts employee well-being, satisfaction, and performance. Remember that employees are the most valuable asset of your business. No matter what your industry is, recognizing their contributions is essential for long-term success and growth.

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2 10 Employee Recognition Statistics You Need To Know In 2023, Nectar.

3 Happy workers are 13% more productive, Oxford University.

4 The Importance of Employee Recognition: Statistics and Research, Quantum Workplace.

The importance of employee recognition: the valuable insights you need to know

Paulyne Sombret

Paulyne is a highly respected expert in hybrid work. She's known for her writing on sustainability in the hybrid office, flexible work models, and employee experience. With a strong background in content and SEO, her work explores the exciting trends and latest news in the world of work.

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