What is employee recognition?

Most employers know that good employees are the driving force behind a successful business. When employees deliver their best work, they deserve recognition for their efforts. But recognition is often overlooked or forgotten.

A common reason employees quit their jobs is that they don’t receive meaningful recognition for their work¹. Recognition not only helps your employees feel motivated and engaged, but it also lowers turnover. So if you’re struggling to retain your staff, it’s possible that merely saying, “Thank you,” once in a while isn’t enough.

If you’re unsure where to start when making employee recognition part of your work culture, this blog will help. We’ll go through the ins and outs of employee recognition, why it’s important, and ways you can show frequent workplace recognition.

Learn how you can show your employees appreciation with fringe benefits

What is employee recognition?

Employee recognition is positively acknowledging staff members for who they are and what they do for a company. Recognition can range from appreciating them for smaller wins, like length of service or exceptional teamwork, to larger accomplishments, like exceeding job expectations or contributing significantly to company goals. Essentially, it’s going out of your way to show employees that you appreciate their efforts.

Offering recognition profoundly impacts a business because it’s one of the best ways to keep your employees engaged, productive, and confident in their abilities. It reinforces and rewards positive employee behavior and performance so they feel valued and continue to strive for success. Additionally, when employees feel appreciated, employee retention is positively impacted.

There are various types of employee recognition. It can be a simple shout-out in a Slack channel, a featured slide during a company meeting, an end-of-the-year bonus, and more. Either way, a successful employee recognition program should be meaningful and consistent—even if you’re using a mix of informal and formal methods.

This will help your staff know what to expect when they experience a win and prove your company’s commitment to employee appreciation.

What are the categories of recognition?

You may think only a manager can recognize an employee for good work, such as an impactful business achievement. But not all recognition needs to come from a leader. A company culture that encourages recognition benefits everyone, meaning that anyone at your organization can recognize another person’s wins—no matter how small.

The common categories of recognition are:

1. Top-down recognition: Authentic appreciation given from the top down, meaning from a supervisor, manager, or leader, is the most traditional form of recognition. It’s seen as one of the most impactful types of recognition because these people are typically in decision-making positions where they can recommend bonuses and promotions to high-performing employees.
2. Peer-to-peer recognition: Teammates and coworkers work closely together. This puts them in a perfect position to offer recognition when a teammate has done great work or contributed. Recognition from peers strengthens the team’s bond and trust, making the entire team stronger.
3. Bottom-up recognition: Just because they’re at the top doesn’t mean managers and leaders don’t need recognition. Also called 360-degree style recognition, bottom-up recognition allows all employees to participate in your recognition program—no matter their job position or if they’re giving or receiving positive feedback.

Why is employee recognition important?

According to Gallup², employees who aren’t recognized enough are twice as likely to quit in the next year. That’s why understanding the importance of employee recognition is directly related to your business’s long-term success. Let’s go over a few benefits of employee recognition below.

1. It drives engagement and productivity

Employee recognition empowers individuals to perform their best. It gives them a reward system tied to their goals, making them more engaged in meeting them. This system motivates and encourages employees, driving them to produce high-quality work and, therefore, increasing productivity.

When they’re recognized and valued for their efforts, employee morale soars, continuing the cycle of better productivity. That’s why having a staff recognition program to aid your employees' productivity and morale is good for your bottom line.

2. It highlights your company's values

Having a culture of recognition shows that you put your employees first. When your culture emphasizes appreciation, empathy, and a strong work ethic, your employees absorb your company values, which positively impacts their job performance and satisfaction.

Updating your business to encourage recognition and hard work also goes a long way toward employee retention. Recognition experts say companies with a positive workplace culture that motivate their employees are much more likely to retain them than those that don’t³. Employee recognition programs are also a great way to promote your company culture and brand. This can set you apart from your competitors and attract top talent to your organization.

3. It grows trust

Impactful recognition programs don’t just keep employees happy. Recognition improves the lines of communication between peers and leadership, and better communication in the workplace goes a long way toward growing trust.

Letting your employees know that even daily tasks are appreciated by coworkers and leaders shows that you trust their ability to produce their best work. This makes them much more likely to experience job satisfaction and improved morale.

Recognizing employees for their hard work and what they’ve done well can also make them more receptive to constructive feedback. Employees are more engaged when management is honest without lowering morale.

4. It builds confidence

Employee recognition in the workplace can create a culture of self-improvement. When employees are praised, it can give them a much-needed confidence boost to take their careers to the next level. This may mean they’re motivated to seek professional development opportunities, tackle a new project, or gain additional industry skills.

If you don’t recognize employee achievements, they may not think that you believe in their abilities. Improved confidence not only makes your employees more productive and secure in their current duties, but it can help encourage them to master their skills and become even better at their job.

Three ways you can recognize your employees

There are several ways you can set about recognizing your employees. You could use a structured method, a more relaxed approach, offer financial gifts, or do a combination of all three. But no matter how you choose to go about it, recognition should be meaningful and organized, so your employees can get the most positive impact.

Below we’ll review three common methods of recognizing employees and examples of how you can use all three at your organization.

Example #1: Formal recognition

The first way you can recognize your employees is formally. Formal recognition is held on a set schedule, clearly communicated to all employees, and is a public and recurring event typically run by a manager or senior leader. Depending on what you’re recognizing, employees may know the criteria necessary to be chosen to receive formal recognition.

Employee Appreciation Day is an excellent example of when many employers hold formal recognition. It’s held annually on the first Friday of March and celebrates employees' hard work. An Employee of the Month Award (or quarter or year) is another way to appreciate your workers formally. Typically, individual employees need to meet certain company values or business goals to qualify.

Other ways to formally appreciate your employees include special occasions like birthdays and work anniversaries. You can also use regularly scheduled company meetings or retreats to celebrate smaller achievements. Lastly, performance reviews are typically held quarterly or annually, providing a perfect opportunity to pass along recognition and constructive feedback.

Example #2: Informal recognition

Informal recognition can happen at any time, come from any individual, and be public or private. They generally occur soon after an achievement happens. They aren’t usually tangible rewards or come with a cost. It’s mostly the act of praising someone. The gratitude the recipient feels from being recognized is what’s impactful.

Informal recognition is typically frequent as it can include appreciating someone for various tasks, such as completing a long project. With this type of recognition, you can highlight their time working on an assignment and congratulate them on a job well done.

Most examples of informal appreciation are verbal peer recognition, like a thank you email, handwritten note, team meeting announcement, shout-out via your messenger app, or a post on your company’s social media page. If you want to make it monetary, you can treat an individual employee to lunch to show appreciation.

Lastly, you can take it a step further by creating a recognition wall. This is usually somewhere in your office (or a channel via a messenger app if you have a remote workforce), where employees post congratulatory messages or virtual sticky notes to outstanding employees. And because it’s public recognition, it motivates employees to perform their best so they can make it on the wall too.

Example #3: Monetary recognition

If you want to go the extra mile for your employees, you can couple your formal and informal recognition by offering a monetary reward. Monetary recognition, also known as employee rewards, can be any amount your budget allows, and award recipients can be individuals or an entire team.

Whatever the amount, monetary recognition shows your employees you appreciate their efforts, and their hard work deserves more than just an informal activity or special event.

Conclusion

Showing appreciation for employees is no longer optional in the workplace. Using a variety of recognition methods engages your workers, provides positive reinforcement, and drives better job performance. Simply put, having motivated and happy employees is necessary for running a successful business.

Whether you want to implement a formal recognition program or offer regular monetary recognition, appreciation that goes beyond occasional compliments should be an integral part of your company culture—especially if you want to attract and retain your employees long-term.

1. https://www.octanner.com/content/dam/oc-tanner/documents/global-research/White_Paper_Performance_Accelerated.pdf

2. https://www.gallup.com/workplace/236441/employee-recognition-low-cost-high-impact.aspx

3. https://officevibe.com/blog/infographic-employee-feedback