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Boosting Business Success and Morale through Employee Recognition

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One of the main reasons people leave a job is a lack of employee recognition.

Recognition is an important motivator for all human behavior, but especially in the workplace. Employees expect hard work to be rewarded - perhaps in the form of promotions or other tangible rewards.

There are many forms of recognition, and every employee is looking for something different. Therefore, you should use all technological tools that support employee recognition.

Ultimately, even a simple “thank you” can go a long way in improving employee retention and culture.

What is employee recognition?

Employee recognition is the recognition of employees for their good work and living out the company values. It can take different forms and pursue different purposes in different circumstances.

Examples of employee recognition

  • Outstanding Performance: Recognition of individuals who consistently exceed expectations in their tasks.
  • Innovative Ideas: Recognition of employees who contribute innovative ideas that benefit the company.
  • Leadership: Recognition of individuals who demonstrate strong leadership qualities, even if they do not hold a managerial role.
  • Adaptability and Flexibility: Recognize employees who adapt to change and deal effectively with difficult situations.

Recognition and reward are often confused with each other, but there is a difference. Employee rewards are amounts of money awarded to employees for their hard work and may be a direct result of their efforts.

When an employee completes a high-value deal for the company, they can receive a reward, such as: an increased bonus, a gift voucher or another form of financial reward. These rewards are things with monetary value.

Recognition, on the other hand, has no monetary value. We might think of the old-fashioned "employee of the month" plaques hanging on the wall, but employee recognition can be anything from a verbal recognition to a mass email to a mention in the latest employee magazine .

Why is employee recognition important?

Employee recognition is critical because it boosts morale, increases productivity, and promotes a positive work environment. It also contributes to employee retention as it makes individuals feel valued and recognized for their contributions.


According to the Society for Human Resources Management (SHRM), 79% of employees work harder when they are recognized in the workplace, proving the value of recognition as a motivator.


Research from the University of Warwick shows that happy employees are 12% more productive and that employees who are unhappy are less productive.

Job satisfaction, a positive work environment, and meaningful work are all factors that promote workplace happiness and can be improved through recognition practices.


Recognized and valued employees are more willing to put in extra effort and achieve higher levels of performance.

Research from Deloitte shows that productivity and performance are 14% higher in companies without recognition programs or strategies than in other companies.

Employee retention

Given the positive impact of recognition on the aforementioned areas, it is not difficult to see a direct link to a positive impact on employee retention.

The SHRM study confirms this, finding that 68% of HR managers believe there is a positive correlation to employee retention.


Improved recognition is not only beneficial for employees, but also for their managers. Nearly 90% of employees said they have more trust in their managers who take the time to recognize them.

What are the business benefits of employee recognition?

According to research, 91% of employees say that a strong culture of recognition motivates them to work for a particular company.

The benefits of employees investing their time and energy into the success of the company are significant. Recognition of employees contributes significantly to:

  • Stronger team culture: Recognition promotes a sense of camaraderie and collaboration and strengthens team dynamics.
  • Attracting top talent: A culture of recognition makes a company more attractive to potential employees seeking a supportive work environment.
  • Encouraging continuous improvement: Recognition of achievements motivates employees to maintain and improve their performance.
  • Reduces absenteeism: Employees who feel valued are more likely to have a positive work atmosphere and are less likely to take unnecessary absences, which leads to a decrease in absenteeism.
  • Improves company reputation: Having a reputation for valuing employees improves the company's image both internally and externally.
  • Promotes innovation: Recognized employees are more willing to be creative and innovative and bring new ideas and solutions.

Each of these areas can impact the bottom line if not implemented well in your company.

Types of Employee Recognition

Formal recognition vs. informal recognition

Formal recognition includes structured programs such as employee of the month awards, annual honors, or milestone recognition.

Informal recognition includes spontaneous gestures such as verbal praise, thanks, or casual recognition in meetings.

Peer-to-peer recognition vs. top-down recognition

Peer-to-peer recognition allows colleagues to thank each other for their contributions.

In top-down recognition, managers or executives recognize the achievements of their team members.

Monetary rewards vs. non-monetary rewards

Monetary rewards include bonuses, raises, or gift certificates.

Non-monetary rewards can include certificates, additional time off, or public recognition.

Private recognition vs. public recognition

Private recognitions are personal recognitions, e.g. in the form of a personal email or a private meeting.

Public recognition includes recognizing an employee's achievements in a public setting, e.g. at company meetings or in newsletters.

Performance-based recognition vs. behavior-based recognition

Performance-based recognition focuses on achievements related to job performance, such as meeting sales goals or completing projects.

Behavioral recognition focuses on actions that align with core values or culture, such as teamwork, innovation, or customer service.

Material recognition vs. intangible recognition

Material recognition includes physical rewards or gifts.

Intangible recognition consists of praise or recognition without a material gift.

How can you build a recognition program for your employees?

Creating a culture of recognition is not entirely unproblematic. How should you recognize an employee's performance in a way that does justice to their performance?

This starts at the top, with leaders who lead by example by setting aside time to recognize their team members - preferably publicly - for their contributions. They then encourage team members to publicly recognize each other as well.

It may take a while, but if leaders are consistent, a culture of recognition will develop over time.

Present current work

First, look at what exists in your current workplace culture and what would be a good fit.

What measures have you put in place to track when employees exceed their goals or KPIs? If you track the number of hours worked or the number of projects someone is involved in, there's probably a story waiting to be told.

Do you have an internal mechanism that can help you with your recognition program, e.g. a newsletter or an internal messaging system (Slack, Teams, etc.)?

Also remember to include all employees, from the rainmakers to the support staff. Everyone deserves to have their achievements recognized and will feel better for it.

Timing is crucial

For recognition to be effective, it should occur in real time (or as quickly as possible).

Quarterly or annual announcements do not have the same impact as genuine recognition of an employee's achievements in the moment it occurs. Frequent, regular recognition will encourage employees to work just as hard as their colleagues to achieve the same successes.

Be bold with your praise

Make sure recognition is public so that every team member can recognize their colleagues' achievements and be inspired by their good work.

If you can make the recognition visible outside the company, even better. An airline, for example, placed their employee of the quarter on the side of a plane!

When you delve into the trends shaping recognition, it becomes clear that the combination of recognition and reward is meeting employee expectations.

Personalized rewards that matter to each individual

Personalized reward systems address the different motivations of employees and thus increase engagement and productivity.

Data-driven OKR software can help you scale this approach by allowing employees to efficiently select their preferred rewards so that individualized rewards can be managed for entire companies.

Gamification creates competition for recognition

Gamification in recognition programs with elements like leader-boards and incremental rewards tied to personalized goals leads to more engaged employees.

This approach transforms recognition into a dynamic tool for real-time learning and progress, providing frequent, meaningful recognition that reduces uncertainty.

Well-being might be the most valued form of employee recognition

Companies are increasingly incorporating wellness and eco-friendly options into their recognition programs and offering rewards such as vacations, wellness vouchers, fitness classes and digital gift cards to reward high-performing employees.

This type of alignment can be achieved with the help of employee engagement software that allows you to survey your employees about the types of recognition and rewards they value most.

Secure, instant rewards

The focus is shifting to secure and instant reward systems, with companies leveraging automated platforms to efficiently deliver and redeem rewards while ensuring both operational efficiency and data protection.

These solutions advance recognition efforts while maintaining data security and privacy.

Inclusion and diversity in reward

Recognition programs are evolving to better reflect diversity and inclusivity by screening for bias and ensuring fair practices for all employees, regardless of age, gender, race or identity.

Combating discrimination in the workplace is critical to promoting innovation, creativity and teamwork, as well as improving overall employee performance.

Final Thoughts on Employee Recognition

Employee recognition is important for a company's well-being and company culture. It's also easy to implement and can cost little or nothing to show employees appreciation for the work they do.

These simple measures increase employee morale, and a satisfied employee usually stays with the company long-term.

HR managers looking to spice up employee recognition can find a wealth of recognition program ideas online and statistical data on how recognition programs can benefit the entire company.

Invest in employee recognition with IceHrm's innovative tools for a happier, more productive workplace. Start fostering a culture of appreciation today!

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