Employee recognition and why it matters

Peero App
October 28, 2021

Blog Article by: Ilze Enkuzena

It is people who make businesses succeed or fail.

Each human being has the potential for creativity and achieving goals, but the question is, how can the organization reach its employees’ potential, and what methods should be used to foster it? Understanding what motivates employees is one of the key challenges for managers.

A study, which was conducted in one large organization with a goal to understand the relationship between rewards and employee satisfaction, came to a conclusion that when an organization places focus on rewards and recognition, employee’s motivation will be increased and therefore will result in higher levels of job performance. Meanwhile, another study reveals that lack of recognition in the work environment results in the second largest risk factor for psychological distress in the workplace. Moreover, among managers, recognition is defined as a key element in their ability to handle difficult work-related situations.

When we hear the term “employee recognition”, it is more likely we come to think of benefits or rewards. But the truth is, employee recognition is built from many bits and pieces and winds through the organization in all levels, from all sides. Employee recognition is built also from ethical, humanistic, and existential angles. While it may sound very complicated, at its core it isn’t. Human needs are very simple and employees can feel recognized, for example, if in the organization:

  • An employee is being included in the steering group for some projects;
  • An employee is provided with training and development possibilities;
  • Managers are visible and accessible;
  • Employees are authorized with flexible working schedules or other personal arrangements;
  • Past mistakes and the negative impact of poor decisions on employees is acknowledged;
  • Is established an organizational culture that respects personal values;
  • Employees are encouraged to support each other.

These are just a few examples and there, of course, are many more, but one is clear – employee recognition reaches far more beyond a tangible reward. It is a part of organizational culture which stretches throughout the organization and must be nurtured on a daily basis. Humans are all individuals, but some of the needs we do share, such as a need to be recognized in our working environment – by our managers, colleagues, or clients, regardless of our job status or type.

Without a doubt, a big part of employee recognition is an acknowledgment of both their performance and employees’ contribution to their performance at work. While performance recognition is somewhat easier to measure, and typically it is done either by managers, subordinates, or clients, the latter one (employee’s contribution to their performance at work) is surely a much trickier part. So-called “beauty judgment” is typically done by peers who are in a better position than anyone else to notice their colleague’s work quality and effort. For the employees themselves, peer review creates a sense of belonging and a feeling of being appreciated.

Now, there are plenty of studies done to support these words, but perhaps we can start with ourselves. Ask yourself – how does it make you feel when you are being recognized by your coworkers? How does it affect your work performance? Your mood? Take a moment to think about it and maybe be inspired to say thanks to your coworker who is on top of their game today.

While all mentioned above focuses more on how employees execute their work rather than on who they are as a person, it is also crucial to notice the contribution of less productive workers or those who are working behind the scenes. Besides, employees may sometimes fall short of expected results, despite their best efforts and know-how, but nonetheless, it is encouraged to recognize the energy and intensity they brought to their tasks. Every task and commitment within the organization should be recognized as only that way the organization can come together as a whole and strive towards growth and success.

One is clear, all mentioned above sounds very beautiful and encouraging, but to implement proper employee recognition which would serve your company’s individual needs and purpose, takes a lot of effort and resources. So let’s take a look at it from a bit more tedious perspective – numbers. What tangible results can businesses gain from implementing employee recognition practices?

A very interesting field experiment was done at Maastricht University a few years ago. Researchers hired more than 300 employees to work on a 3-hour data-entry task (they were not aware that they were being participants of the experiment) and in a random sample of workgroups. After 2 hours of work, employees received an unexpected recognition in a thank-you note form, thus, non-financial. Meanwhile, it must be pointed out that in this experiment recognition was public, which, however, is not recommended in a real work environment due to a risk of jealousy and other negative side effects. Results were stunning:

  • All employees in the group received recognition, the group’s performance increased by 5.2%;
  • 3 best group’s performers received recognition, the group’s average performance increased by 7.3%;
  • Recognition was received by the single best-performing employee, the group’s average performance increased by 5.6%.

One cannot argue with the numbers, nor they should. The conclusion from this experiment is beautiful in its simplicity: when employees are recognized, they increase their performance, which results in increased profit for the organization.

The key message based on studies is that employees care for the employer who cares for them. Employers who create a work environment that fosters employees’ need for recognition (remember also ethical, humanistic, and existential angles mentioned above) will be perceived as kind and caring, which in turn, will result in increased performance from the employee’s part. At the end of the day, every business’s main goal is to make a profit and isn’t it great that profit can be increased by simply being… Kind and caring?

Learn more how electronics giant Samsung made employee recognition happen in this case study