Why is Employee Recognition Important?

Why is Employee Recognition Important?

Employees are suffering from burnout, disconnection, and low morale in greater numbers than ever before. However, there is a simple solution: recognition.

Employees’ top request in this new normal is recognition. The vast proportion – 82 % wish they were recognized more. And satisfying this need has a significant impact on critical drivers to your bottom line, such as employee engagement and retention.

Most people are constantly dissatisfied with their life because they lack appreciation and gratitude. This is because humans want to be seen, heard, and recognized. It’s critical. And recognition is a great method to express our gratitude to others.

Employee recognition is the process of recognizing a company’s employees for exceptional achievement. Employee recognition in the workplace essentially seeks to promote specific behaviors, practices, or actions that result in improved performance and beneficial business outcomes.

Appreciation is a basic human desire. Employees like being recognized for their exceptional work since it shows that their work is respected by others. Employees feel encouraged to continue or enhance their outstanding work when their work is recognized which increases their satisfaction and productivity level.

The important factors that help create employee recognition in the organization are mentioned below:

Employee Engagement

Employee recognition is the most important element driving employee engagement and, as a result, organizational performance.

Employees that are engaged benefit workplaces in a variety of ways:

  • they are higher performers,
  • they are linked to and devoted to their firm, and
  • they are ready to go above and beyond their duty.

Employee engagement increases by nearly 60% in firms that place a high value on praising and rewarding employee accomplishments.

Communicating clear business mission and values by public recognition also develops a feeling of community, which helps keep people motivated and alleviates some confusion regarding duties and responsibilities.

High Productivity

Productive employees help businesses in a variety of ways, including increased profitability and resource optimization. Productivity is strongly intertwined with company profitability and is a key driver of success in modern businesses. According to Bain & Company, the most productive firms are 40% more productive than the others, and their operating margins are 30% to 50% greater than their industry rivals.

Employee engagement is increased through genuine acknowledgment. As a result, employees are more productive. On paper, it appears straightforward, but the emphasis must be on actual recognition. Simply, the words of acknowledgment that are viewed as insincere or generic do not count. However, when done effectively, recognition has significant business benefits. According to psychological research, a simple statement of appreciation from someone in authority increased productivity by 50%.

Employee Retention 

Employee retention refers to an organization’s capacity to retain its staff. Employee awards and recognition are one method for retaining your employees. Financial incentives, like promotions, bonuses, and stock options, are one example.

Employee recognition gifts are highly appreciated. Employees that perform well, for example, should be awarded gifts, like, company-branded tees, hoodies, or tokens. Employee recognition through an incentive program is a great approach to express gratitude for your employees, keep them engaged, and keep them on board.

A study by Bersin & Associates research shows that firms with extremely successful recognition programs for boosting employee engagement had 31% lower voluntary turnover than those with ineffective recognition programs. Currently, 66% of employees are inclined to leave their job if they feel unappreciated.

If your company turnover is increasing and you think you can hire more employees for the company. Go ahead. But doesn’t it sound demanding and costly? Yes, it is.

According to some estimates, welcoming a new person into the fold may cost up to $3,500 in recruitment costs and up to $1,200 and 32 hours of continued training every year. In all, a new worker might cost $4,129 and up to 42 days of missed or compromised productivity. If that sounds like an unnecessary complication, you’re probably correct.

Employee retention is the ultimate test for a recognition program’s effectiveness. To put it simply, will our employees be staying longer? Employees that feel appreciated at work are more likely to stay with your organization. Employees who feel undervalued, as if their efforts are unimportant, will be more inclined to regard your firm as temporary until they find their “dream” job. Creating a meaningful employee recognition program will get your firm one step closer to being a “dream company” for top talent in the job market.


Employee morale rises on an individual level when leaders understand the genuine purpose of recognition. Employees leave work feeling appreciated. In essence, employees have a better feeling of well-being and job satisfaction. As a result, group morale rises and a sense of respect and positivism penetrates the workplace. Allowing your employees to know that their efforts are being recognized by management will help motivate your company’s most precious asset.


There are several ways to implement employee recognition in the workplace; however, it all starts with business culture. A successful employee recognition program begins with a business culture that values top employees. For the future, this can work as the foundation of strong staff engagement, ongoing employee development, and retention strategies.

By rewarding someone for reflecting company principles, you intentionally enhance your organizational culture and reinforce objectives.

Another advantage of employee appreciation in the workplace is that it can serve as the basic foundation for developing a culture of self-improvement. One of the most effective methods to recognize employees is to provide the opportunity to develop and improve their skills. To take it a step further, incentivizing learning will be good – to reward those who have taken the effort to work on self-improvement.

Think your way to success

Even at the highest levels of management, recognition is a critical success component. Giving workers the appropriate feedback to determine which of their efforts are most appreciated allows everyone to better understand the effect of their work and what to focus on. This does not imply that you should offer a standing ovation to every person that arrives on time, but it is critical to inform everyone about how (and how much) each of their efforts contributes to the organization’s success.

You need to start experiencing the benefits of employee recognition right away if you want to succeed. Great tool to implement employee recognition is Peero

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