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Employee Recognition: The Not-So-Secret Ingredient to Business Success

April 24, 2024

Employee recognition

"Thank you!"

Two simple words that can yield extraordinary results. In a world where employees often feel undervalued, taking the time to recognize their hard work can be the difference between a disengaged workforce and a thriving, successful company.

These days, talent retention and employee engagement are crucial to organizational growth — and believe it or not, employee recognition programs can help your business win big.

You might be thinking, "Is it really that big of a deal?"

The answer is yes.

Sure, employee recognition initiatives might feel a little fuzzy, but O.C. Tanner’s 2024 Global Culture Report reveals the stark reality: over 80% of employees don't feel seen or appreciated for their workplace contributions. 

It's time to change those numbers through targeted recognition strategies. Walk with us!

The power of employee recognition programs for your MVPs

You know how your favorite barista gives you that extra shot of espresso just the way you like it?

Well, recognizing your employees is a bit like that, but for your business. It creates a positive workplace culture that, in turn, energizes morale and engagement. 

Here are four advantages of employee recognition programs:

  • The feel-good factor: Recognition fuels a vibrant workplace culture, significantly impacting employee morale and engagement.
  • Motivation station: Think of recognition as tapping into the science of human motivation. Engaged and motivated employees are more likely to innovate, go the extra mile, and achieve great things for your business.
  • Big business benefits: Companies that master the art of employee recognition often see a surge in stock prices, customer satisfaction scores (NPS), and stellar employee performance.
  • Turnover? I don’t know her: Nothing sends employees packing faster than feeling unappreciated. Robust recognition programs can dramatically decrease your voluntary turnover.

Boosting morale, motivation, and the bottom line

Picture it: You've worked late nights and sacrificed weekends to hit a major deadline. You’re relieved to have succeeded but also feeling burnt out. A simple "Thank you, this wouldn't have been possible without your dedication" from your manager can transform your entire outlook.

That's the power of recognition at work.

Employee recognition isn't rocket science. It taps into a basic human need: the desire to be seen and valued. A heartfelt "thank you" for a job well done releases dopamine in the brain, triggering feelings of pride and pleasure. When your people feel consistently appreciated, it ignites their motivation and propels them forward.

Silent gratitude isn't much use to anyone.

Gladys Bronwyn Stern

The vibe you want

When one team member shines, the whole team wins. Consistent, genuine recognition creates a contagious atmosphere of positivity, driving employees to push themselves further and collaborate with enthusiasm. 

This energy spills over into everything from customer interactions to innovation. Recognized employees are also more likely to champion your company's mission and become ambassadors for your brand.

Google gets it: The tech giant encourages recognition through the "gThanks'' platform, where employees can send personalized notes of appreciation to their colleagues. Their legendary peer-to-peer bonus programs foster a culture where employees feel empowered to give each other shout-outs (and cold, hard cash!).

Making work a happy place

Let's just state the obvious: nobody wants to work in a place where they don't feel valued. A recent Globant report spills the stats: 97% of employees want their strengths recognized, and 24% left their last job because they felt unappreciated.

When employees know their work makes a difference, they don't just show up; they lean in. Highly engaged employees have an emotional commitment to their work, leading to better job satisfaction, innovation, and lower turnover rates. They tackle challenges with enthusiasm, bring creative solutions to the table, and become deeply invested in your company's mission.

They are also more likely to be net promoters: people so happy with their employer that they spread the word and recommend your company to peers, friends, and other potential new hires. Think of them as your company's hype squad, spreading the good word and attracting top talent to the team. It's a beautiful cycle.

Recognition = retention

Replacing employees is expensive — not just in dollars, but in lost knowledge and disruption to your team's momentum. A strong culture of recognition is your best defense against losing your company’s most valuable assets.

Recognition demonstrates to your employees that you're invested in their success and growth. And with career development a top priority for many (especially Millennials and Gen Z), offering opportunities for learning, mentorship, and advancement shows you're serious about developing your workforce.

Why employee recognition is important

Employee recognition is more than cutting a check or handing out annual trophies. It's about genuine appreciation and creating a workplace where people want to be.

Still not convinced?

When employees feel valued, the energy is palpable. An affirmative work environment boosts morale across departments, and who wouldn't want to be part of that? Engaged employees have a tighter emotional investment in their work, going above and beyond because they believe in what they do.

Research shows that employees who receive regular recognition are more likely to report high levels of job satisfaction. This directly combats turnover (and is a huge cost-saving win).

Teamwork makes the dream work, and valued employees are more likely to collaborate effectively, share ideas, and support each other's successes. Disengaged employees cost the world $8.8 trillion in lost productivity, according to Gallup. However, highly engaged teams show a 21% boost in profitability.

Recognition is a powerful motivator with direct financial benefits.

Microsoft's model: Microsoft invests heavily in employee recognition programs, like its Total Rewards Portal (TRP). The platform gives employees a bird-eye view of their compensation and benefits and shows them the investment Microsoft is making in them. It has contributed to a significant increase in employee engagement scores and a more dynamic company culture overall.

Types of employee recognition

Variety is the spice of life, and recognition isn't one-size-fits-all! Your company should offer a mix of programs that appeal to a diverse workforce and offer both short- and long-term benefits to employees.

So, how do you decide which ones suit your business best?

Start with your company culture. Consider the formality of your workplace when choosing recognition types. A startup might love quirky, informal methods, while a corporate environment might need a balance of formal and casual.

Next, think about cost versus impact. Some forms of recognition are budget-friendly (handwritten notes), while others are bigger investments (annual awards). Weigh the potential impact against the money involved.

Easy enough, right? Here's a closer look at the common types of employee recognition and how they can best benefit your company.

Formal ways to recognize your employees

These high-profile moments are fantastic ways to celebrate big wins:

  • Annual awards and ceremonies: Grand gestures celebrating major milestones and crowning an employee of the year build anticipation and excitement. They also help set clear goals and promote healthy competition.
  • Employee of the month programs: Consistent recognition keeps morale and motivation high on a daily basis. These programs make employees feel consistently seen for their contributions year-round.
  • Recognition through promotions: Promoting employees who excel shows them they're on the right track, cultivates ambition, and demonstrates a path for professional growth within the company.

Informal, creative ways to recognize your employees

Sometimes, the most meaningful recognition comes in small, everyday gestures:

  • Peer-to-peer recognition: Empowering employees to acknowledge each other's contributions builds team spirit and a sense of appreciation flowing in all directions.
  • Shout-outs in team meetings: Who doesn’t love feeling seen? Public praise highlights wins effectively and gives employees an immediate mood boost. Moreover, it encourages others to strive for similar recognition.
  • Social media recognition: A virtual pat on the back (especially visible to the employee's network) can feel extra special. By reaching a wider audience, you enhance the employee's reputation within the company and industry.

For example, Southwest Airlines' SWAG (Southwest Airline Gratitude) program gives leaders and peers the opportunity to recognize and thank one another “early and often” with points redeemable for merchandise, gift cards, and travel incentives. This reward system celebrates individual employees while creating a strong sense of community.

Tangible rewards are great, too!

Don't underestimate the power of bonuses, gift cards, and flexible work arrangements.

  • Bonuses and incentives: Everyone loves immediate gratification for hitting their goals. Financial rewards are a classic motivator and prove that the company is putting its money where its mouth is.
  • Gift cards and vouchers: Create a sense of instant rewards by allowing employees to choose their own treats. This adds a touch of personalization and care.
  • Flexible work arrangements: The gift of time is incredibly valuable. Giving employees a choice in their schedules demonstrates trust and understanding of work-life balance. It’s an easy way to improve retention and overall job satisfaction, especially for working parents and those with caregiving responsibilities.

For example, Zappos' commitment to multi-directional recognition built a culture so strong that employees wouldn't dream of leaving. Along with flexible and remote work options, Zappos prioritizes strategic employee recognition.

The company offers everything from surprise bonuses to its coveted "Co-worker Bonus Program" — in which all employees can award each other $50 monthly — as a way to empower teams to recognize each other's efforts.

How to implement an employee recognition program successfully

Successfully implementing an employee recognition program that works for everyone is no easy feat. But we have some tips and tricks to help you get it right.

Stick to clearly defined criteria

Recognition shouldn't be random. What do you want your program to achieve? Increased productivity? Better teamwork? Tie it to measurable goals, core company values, and specific behaviors you want to highlight and encourage.

To track progress easily, decide on KPIs like project completion rates, customer satisfaction scores, etc.

Not only does this approach create a sense of transparency (and help employees understand why they're being recognized in the first place), but it also ensures that your programs avoid bias and leave no one behind. Speaking of which.

Keep inclusivity and fairness top of mind

Avoid those "teacher's pet" vibes!

A Gallup survey finds only 26% of employees strongly agree that they receive “similar amounts of recognition as other team members with similar performance levels.” 

What’s more, the study pointed out that while 28% percent of White employees strongly agree that they receive equitable recognition, only 19% of Black employees and 21% of Hispanic employees say the same.

We all have unconscious biases. Be aware of yours and encourage the same for anyone involved in recognition decisions. Make sure recognition opportunities are accessible to everyone — regardless of role or department — and set up systems to distribute them fairly across your entire team. Your business will be better for it.

ABC: always be consistent

Aim for regular, light-touch acknowledgments to keep the momentum going. Recognition should be a part of your work rhythm — think daily high-fives, weekly shout-outs, or monthly awards. After all, giving kudos too long after their great work loses its oomph. 

Don’t forget to spread the love: a fair system encourages greater participation across the company. If the same few folks get all the praise, others might tune out (or worse, take off).

Get your employees involved

You don't have to make assumptions about what your employees want — actively solicit and gather their feedback, then tailor your program accordingly. Are employees feeling valued? What kind of recognition truly motivates them?

A successful employee recognition program will feel organic, not forced. By letting employees be part of the process, you’ll foster a collaborative spirit and help them take ownership of creating a more positive workplace culture.

Employee recognition programs best practices

Time to take your employee recognition from good to truly impactful. Here are some tried-and-true strategies:

Personalize the experience for employees

A generic "good job" is nice, but recognition that acknowledges a specific achievement or a personal touch? That hits differently. When you tell an employee, “That presentation was incredible! Your data visualization made a complex topic easy to grasp,” it shows you were truly paying attention.

So, know your audience and tailor recognition to individuals. A handwritten note might mean the world to one employee, while a shout-out on social media is perfect for another.

Did an employee crush a project while also volunteering at an animal shelter? A donation to that organization in their name is a thoughtful win. Are they pulling all-nighters to make a tight deadline? A monogrammed mug and gift card to their favorite coffee shop screams, “I see you!”

Public recognition is a prize we all deserve

Highlighting accomplishments in team meetings, email blasts, or company-wide channels creates a ripple effect of motivation. Take a few minutes at the top of meetings to recognize recent victories and the employees behind them — this sets a positive tone for everyone.

You can also share achievements on your intranet or Slack for maximum visibility. We all crave a spotlight moment, and even a quick public shout-out can make an employee's day. 

Continuous improvement can make a lasting impact

The best recognition programs aren't set in stone. It’s important to regularly assess what's working well and where you can improve to keep things fresh and relevant. Survey employees to discover which kinds of recognition resonate most (and what might not be hitting the mark).

You can also stay up-to-date on what other companies are doing successfully. There's no shame in borrowing great ideas.

Remember, as your company grows and changes, your recognition program should, too. When you adapt and evolve to changes, it shows you're invested in keeping employees feeling truly valued.

Nailing the balance between individuals and teams  

Your business is a symphony, not a solo act. While recognizing those standout employees is crucial, you should celebrate team wins with equal enthusiasm. This strengthens camaraderie and builds a sense of shared purpose.

Nurturing a focus on teamwork reinforces the idea that success relies on everyone pulling together. This promotes trust and makes employees feel valued as part of something bigger. Studies show that companies fostering individual and team recognition see significantly higher employee engagement scores. Think about it — doesn't it feel amazing when your entire team achieves something remarkable?

Simply put, you can’t praise Beyoncé without also appreciating Destiny's Child. The same goes for your workplace superstars; give credit where credit is due.

Employee recognition ideas: tactics that make employees feel like rockstars

Let's talk about a few ways to make your recognition truly shine.

Personalized notes of appreciation

We live in a digital world, but a handwritten "thank you" still carries serious weight. Add a quick video call or voice note for extra impact! Bonus fact: A Deloitte study found that 36% of women prefer written thanks over verbal, compared to 28% of men. Keep that in mind when tailoring your approach.

Public acknowledgment during team meetings

Carve out time in team meetings to shout out successes. Even a few minutes of public recognition creates a wave of positivity that can carry employees through the day. Encourage everyone to participate in the "hype session" and cheer each other on — it'll make the recipient (and their teammates) feel valued.

Opportunities for growth

Don’t be fooled: money is still a great way to thank your employees! However, a Deloitte study finds that salary increases, high performance ratings, and bonuses were far less popular choices than good ol’ fashioned growth opportunities.

Offering training, mentorship, or a juicy stretch assignment demonstrates your belief in an employee's potential.

Reinforce a culture of collaboration by celebrating collective wins

Here's how to celebrate those team wins that foster collaboration.

Team recognition events

Treat these like mini-celebrations to jumpstart morale and remind everyone why they make such a great team. Skills-focused training sessions or collaborative problem-solving workshops get everyone working together, plus they feel like a reward. Don’t forget about “fun” offsites: even something simple, like a team bowling outing or virtual escape room, builds solidarity in a relaxed setting.

Peg recognition events to milestones (“We hit 10,000 subscribers!” party) or company values for extra meaning. Even playful, informal awards for teamwork or the most innovative idea can bring out the best in your employees and give them the opportunity to share and celebrate specific achievements.

Communicate wins widely to higher-ups

Hey managers: your teams are kicking butt; now make sure everyone knows it! Think company newsletters, intranet announcements, or quick shout-outs at all-hands meetings. Include successes in reports to senior leadership. 

This gives your team major visibility across the company. When highlighting wins, call out the specific contributions of team members — it showcases their individual value. Don’t let good work go unnoticed.

Acknowledge collective milestones to build mutual support

Research shows that celebrating small wins can have big results. At the start of meetings, call attention to smaller accomplishments and great teamwork examples. This positive feedback loop encourages more collaboration. When employees see their efforts recognized, they're more likely to keep up the good work.

A culture focused on those small but mighty wins makes the whole team feel supported and valued, which improves morale, fuels engagement, and makes everyone more invested. 

Values can pay the bills 

It's easy to have values on a poster, but recognizing actions that embody them creates a culture where those values truly become part of your company's DNA. So, what if aligning your company values with employee recognition could supercharge your success?

Turns out it totally can! When you connect recognition to those values, every "thank you" reinforces that mission. And the data doesn't lie: companies that do this well consistently outperform their competition across the board.

According to bestselling author and researcher Shawn Achor, employee recognition raises nearly every measurable business outcome, increasing sales by 37%, productivity by 31%, accuracy on tasks by 19%, and providing improvements to employees’ health and quality of life.

Our words can move other people from a fear-based mindset in which they see obstacles as insurmountable to a positive mindset where they see that change is possible, get unstuck, and take action.

Shawn Achor

The key takeaways for an effective employee recognition strategy

Let’s recap, shall we?

Investing in a well-structured, consistent recognition program is no longer a nice to have — it's a business imperative. Recognition directly drives employee happiness, and happy employees power successful businesses.

What’s more, a culture of appreciation fosters a sense of safety where employees are more likely to bring their best ideas forward. Companies with strong recognition programs outshine the competition when it comes to attracting and retaining top talent.

Ready to reap the rewards? Here's your action plan:

Creating a recognition program

Source: Zensai

Employee recognition is a strategic lever for establishing a workplace where people feel valued, motivated, and genuinely excited to do their best work. It is a powerful investment in your company's most valuable asset — your people.

By making it a cornerstone of your culture, you're not just making your employees happy but giving your business an edge.

Employee recognition isn’t a trend; it’s a necessity

Here’s the thing: the way we work is changing. Employees crave more than just a paycheck; they want to feel their work aligns with a larger purpose. When you recognize moments when an employee truly embodies your company's values, you solidify that connection.

Employee recognition is the not-so-secret ingredient for sustained success — and absolutely essential if you want to stay ahead of the curve. Today's top talent knows their worth. A strong, recognition-driven culture can be a major retention magnet, ensuring your company isn't missing out on the best of the best.

Your employees are the heart and soul of your company, right? When they feel appreciated, that magic shines through in everything they do. Show your team how much you value their dedication, and watch your business take off.

Want to discover fresh ways to recognize your team's efforts? Our guide on unique employee rewards can help you!

Edited by Jigmee Bhutia

Employee Recognition Software
Shine a spotlight on your MVPs!

Celebrate your team's wins and cultivate a vibrant workplace atmosphere with top-notch employee recognition software.

Employee Recognition Software
Shine a spotlight on your MVPs!

Celebrate your team's wins and cultivate a vibrant workplace atmosphere with top-notch employee recognition software.

Employee Recognition: The Not-So-Secret Ingredient to Business Success When employees feel appreciated for their contributions, every part of their performance improves. Understand the tangible benefits of employee recognition.
Andy Roberts Andy Roberts is Executive Vice President of Product at Zensai, leading the development of their human success platform. He joined Zensai in August 2023 following its acquisition of Weekly10, a leading employee performance and engagement platform. He was the founder and CEO of Weekly10. Andy has two decades of experience in software and product leadership roles across finance, e-commerce, telecommunications, and SaaS.

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