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What is Employee Recognition & Why Does it Matter?

6 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?

Giving recognition to your staff members comes with huge benefits, both to your working environment and your bottom line.

Happy, motivated workers who feel appreciated are 12% more productive than those who are demotivated and think their efforts are rarely noticed. Recognising great work, in whatever form that takes, consistently results in higher productivity and more creative working.

Staff who feel appreciated may also feel more confident about putting forward new ideas and offering suggestions for improvements. Making sure that your employees feel like a team also builds resilience, allowing them to pull together to overcome obstacles.

Employees who feel seen and appreciated are also far less likely to look for a new role elsewhere. You’ve probably heard that people don’t leave jobs; they leave managers. Research shows that few employees are keen to leave a manager who recognises their hard work and makes a point of thanking them publicly. 

Employee recognition creates a ripple effect – great employees are highlighted and thanked, encouraging others to emulate them. Staff will also pick up the culture of appreciation and gratitude, often complimenting and thanking each other.

This creates an encouraging, supportive work environment where staff feel supported and valued.  

What does it 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? 

Mo is an employee engagement platform that helps leaders improve collaboration and morale, prevent people from leaving and drive change.

Our platform creates a recognition-rich culture through the development of team habits, encouraging people to celebrate successes, recognise results and appreciate colleagues.

Great for any team. An absolute must-have for distributed teams. Your complete toolkit for connecting and motivating teams in the new world of work.

Book a demo or try Mo for free today!