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What is Employee Recognition & Why Does it Matter?

8 min read
Zoe Brankin
Zoe Brankin

Your employees are your company. If this wasn’t clear before, the past few years’ events have provided unequivocal evidence. The companies that have thrived during these times have highly-skilled, well-motivated employees.

We can upskill our outstanding team members with specialised training and development opportunities, but keeping them happy and motivated is essential. Ping pong tables and hang-out areas are simply not enough, and more companies now realise that employee recognition needs to be at the forefront of their business. 

Employee recognition is an essential part of making sure that your employees feel respected and valued. Let’s look into why employee recognition is so important and how you can create a culture of recognition and gratitude.

What is employee recognition?

Employee recognition is a sign of appreciation and gratitude to your employees for their efforts and achievements within your organisation. Employee recognition is anything that shows your team members that you value how hard they’ve been working.

Implementing the right kind of recognition program is crucial in giving your company a competitive edge over others. They’re a powerful tool for improving employee engagement, reducing staff turnover, increasing productivity, and building purpose when used correctly. 

Although most recognition schemes operate top-down, that isn’t the only way to help keep your employees motivated. Recognition from co-workers and peers can sometimes be even more effective at encouraging team members, creating an enthusiastic and supportive workplace.

Why is employee recognition important?

Introducing proper employee recognition processes into your daily practices can considerably impact many areas across the business. 

The connection between employee recognition and engagement

An engaged employee is a happy employee. Right? Engagement is one of the essential qualities you should want from your workers –– and there’s no faster way to get there than with proper recognition.

Consider the results from Bayhealth Medical. When the organisation implemented a formal recognition strategy, employees reported feeling a greater sense of belonging and connection to the company and with their coworkers. This can increase engagement and, in turn, staff satisfaction. But it also can’t be a once-and-done exercise. 

Recognition needs to be ongoing rather than a one-off acknowledgement. A 2020 UK workplace culture study found that half of the employees who had been recognised within the past week were very engaged. Fantastic numbers. But unfortunately, those numbers dropped to less than a third of employees recognised in the last month, and just 16% in the last year. 

Recognition can lower the turnover of staff

The proof is in the pudding. Employees want to feel appreciated, but more than that, be recognised. More than half of employees want more recognition from their direct manager, which means more than half of workers may soon be driven to quit their jobs if they don’t get it. 

Ask yourself, what are you doing as a business to recognise your employees?

It’s a perk for potential candidates

There are many things professionals look for when job-hunting: salary, perks, company culture… the good stuff. Increasingly, people are looking for more. It’s become apparent that new applicants seek out jobs in organisations with established employee recognition programs –– you might write it off. Still, it continues to be one of the most important employer traits candidates looked for in 2021.

If you’re hoping to recruit the top talent into your organisation — and keep them on board — having a good track record of employee recognition is essential. 

Increased productivity

Happier workers are more productive at work. And not just marginally. Happiness makes staff around 13% more productive. Big hitters such as Google now invest more in employee support, and satisfaction has risen by an eye-watering 37% as a result. 

Your organisation can foster a higher sense of well-being and happiness by simply instating proper employee recognition, leading to more productivity across the board. A small investment in a recognition program can pay massive dividends. 

Improved employee satisfaction

We all go into work wanting to have some purpose. Whatever our job role is, it’s important to make a difference –– but if no one recognises that, what’s the point in continuing? Multiple workplace studies have proven this direct link between recognition and a sense of purpose. 

A recent study found that three-quarters of US employees who were happy with the amount of praise their teams received also strongly agreed that they felt their work was valuable and useful. 

Build your company culture

Despite what some tech startups may think, company culture isn’t just about having free beers on Thursdays, nap pods or an office ping pong table (although they are pretty great). The culture of a company is built on the back of employee satisfaction.

If people aren’t happy with management practices and don’t feel adequately recognised for their work, it will be near-impossible to build a positive culture in the workplace. 

Decreased absence of staff

More engaged staff leads to staff more eager to come to work. Period. While many absences can be attributed to sick days or personal issues, there’s no denying that a lack of employee satisfaction can lead to this increased absence rate.

According to a Gallup report, businesses with employees actively engaged in their work have lower employee absenteeism rates –– by up to 41%. That’s nothing to be scuffed at. 

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Rewards & Recognition: How to Make Your Program Successful

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What does recognition look like? 

So what exactly does employee recognition look like? Recognition schemes or programs can take on many forms, but it’s one of the most important and valuable areas a team can focus on. 

Traditional employee recognition programs typically offer rewards, such as vouchers, as a concrete symbol of your appreciation, but recognition at work doesn’t end there. Sometimes, it’s as simple as a handwritten note saying thank you, or a shout-out for great work that’s shared with the rest of the company. 

It’s not a one-size-fits-all exercise. You want to set up a recognition program that will offer different rewards for different occasions. Not only do you want to have a solid recognition scheme in place, but you will also want to build a supportive atmosphere that encourages your employees to do their best. Ask your employees what they want, and decide from there what it is you can deliver. Here are a few examples:

Monetary Rewards

One of the most common reward schemes set out by companies is a tangible reward for good work, such as receiving a gift card for a local restaurant or a voucher for a free coffee. 


Another standard reward scheme is an employee of the month award, which usually involves all employees voting for who they think deserves it this month and potentially writing down why. Some organisations may even go further than this and offer a team of the month award, which can help boost team morale and spirit.

Verbal Praise 

How often would you actually say thanks to one of your colleagues or employees? Verbal praise can make a bigger difference than you think, and you should never underestimate how powerful a simple ‘well done’ can be! It’s a genuine form of appreciation, and the best way to do it is by explaining what you’re thankful for.

Written Praise 

If you’re going to give an employee written praise, you could do it through Mo! On our platform, you can send your message of appreciation and gratitude to an employee for the whole company to see, meaning it won’t get lost in an inbox or Slack channel. When employee recognition is given in the moment, it has the most significant potential for impact because the action is rewarded almost immediately.

What defines an effective and successful employee recognition scheme?

Recognition in the workplace is hugely important, but as we said, you need to get it right. Not all staff recognition schemes are equal. If you want to show your appreciation in ways that will motivate your staff, here are some features of a great employee recognition scheme to keep in mind.

It reflects genuine appreciation

One of the most important aspects of showing your appreciation for your staff members is sincerity. One of the reasons why traditional employee reward schemes miss the mark is because they feel formulaic and insincere.

This is why recognition is often deemed better than reward. Team members can interpret a voucher as a routine part of a scheme, whilst saying thank you, whether face-to-face or in a message, feels like a genuine gesture of appreciation.

Rather than ‘going through the motions’, focus on paying attention to the staff members you’re grateful for. This creates a sense of connection, which is key for successful recognition.

It’s timely and responsive

It might be convenient for management to run monthly or quarterly reward and recognition processes. Unfortunately, this creates disconnect between your team member’s efforts and your appreciation.

Some gestures of thanks might take a little time to organise, but make sure that you’re showing your appreciation straight away. Take a few minutes to say thank you or highlight their efforts to the rest of the team.

It’s public

Not all employee recognition has to be public, but some of it should be. Making a public statement about an employee’s great performance can help to build team cohesion and motivate the rest of your team at the same time. Making your employee recognition public ensures that everyone knows what it takes to excel and creates a culture of appreciation.

It’s fair and open to all

Having an excellent recognition scheme can be counterproductive if not everyone can participate.

The best staff recognition schemes encourage employees to show their appreciation to each other, rather than relying just on top-down awards. Demonstrating that team members can also appreciate each other’s efforts is one of the fastest ways to build team identity and cohesion.

Great schemes are also broad enough to reward a wide range of employees and different types of success. This isn’t about lowering the bar so everyone can be recognized. Instead, the aim is to be able to reward the myriad of ways that great employees can make a difference.

It reflects the company’s values

Your employee recognition scheme is custom-designed to reinforce your company’s values. This is your chance to demonstrate that your values are more than a slogan.

Plan your employee recognition scheme to reflect those values. If you value teamwork and collaboration, make sure that those qualities are rewarded regularly and publicly.

Whatever your values, recognise those team members who best embody them to create a strong company culture.

Want to take your employee recognition scheme to the next level? 

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Mo is an employee recognition and engagement platform that can help leaders improve collaboration and morale, reduce employee churn and drive change. 

Our platform creates a vibrant culture by developing team habits, encouraging people to celebrate success, recognise results and appreciate colleagues.

Your complete toolkit for connecting and motivating teams in the new world of work. Book a demo with our team today!

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