Why Employee Recognition Matters For Culture-Focused Workplaces

Most of us are familiar with the feeling of being appreciated. Whether it’s a heartfelt “thank you” from a loved one or a pat on the back from our boss, recognition feels good. That’s why employee recognition is crucial for modern workplaces. This is especially true for companies that are committed to strong improving company culture, employee satisfaction, and team productivity.

Psychology of recognition tells us that feeling appreciated is crucial to our well-being. When we feel valued, our brain releases dopamine, making us happy and motivated. On the other hand, when we feel ignored or unappreciated, our brain releases cortisol, which can lead to stress and anxiety. Given the importance of feeling appreciated, it’s no surprise that employee recognition is essential to any successful organization.

Employees who feel like their work is valued are more likely to be engaged and productive. Furthermore, studies have shown that employees who receive regular recognition are more likely to stay with their company for longer. In other words, not only does employee recognition boost morale in the short term, but it also positively impacts retention rates.

What Does “Employee Recognition” Mean?

Employee recognition is the act of showing appreciation for an employee’s hard work and contributions. Of course, there are many different ways to show recognition. Still, some of the most common include verbal thanks, written notes of appreciation, awards, and bonuses.

Why Is Employee Recognition Important?

Based on the psychology of recognition, here are some of the reasons employee recognition matters.

It Boosts Employee Satisfaction

Employee satisfaction is crucial to a successful business. When employees are happy, they are more likely to be productive and engaged. And when they feel valued and appreciated, they are more likely to stick around. A recent study found that 66% of employees quit their jobs because they don’t feel appreciated. That’s a significant number, and it underscores the importance of recognition.

It Increases Employee Engagement

Engaged employees are more productive and more likely to stick around. They are also more likely to go above and beyond for their company. Recognition is one of the key factors that can increase employee engagement. Employees feel more connected to their work and company when they feel recognized. This, in turn, leads to higher levels of productivity.

It Improves Employee Retention

Recognition is a critical factor for employee retention and satisfaction. When employees feel appreciated, they are less likely to leave their company. In addition, recognition can also help to motivate employees and build morale. Acknowledging an employee’s hard work can inspire them to continue putting forth their best effort. Furthermore, recognition can also help to build team cohesion. When employees feel like they are part of a cohesive unit, they are more likely to be loyal to their team and company.

It Can Help Attract Top Talent In Today’s Competitive Job Market

With unemployment at historic lows, companies are struggling to attract and retain top talent. Employee recognition can be a crucial differentiator. Candidates want to work for companies that value and appreciate their employees. So if a business owner is going to attract the best of the best, they need to make sure their employees feel recognized.

Decreased Stress And Absenteeism

When employees feel appreciated, they are less likely to experience stress. And when they don’t feel stressed, they are less likely to call in sick. A study by the American Psychological Association found that employees who feel recognized are less likely to experience stress-related health problems. As a result, they are more likely to be productive and engaged.

Improved Customer Service

Recognition can also have a positive impact on customer service. For example, employees are more likely to go the extra mile for customers when they feel appreciated. They are also more likely to be friendly and helpful. And that can lead to real customer loyalty.

How To Express Recognition

Now that we explained why practicing psychology of recognition matters, the business owners might wonder how they can show their employees some appreciation. There are several different types of employee rewards and recognition.

Bonuses And Financial Incentives

One of the most common forms of recognition is a bonus or financial incentive. It can be a great way to show the employees that they appreciate their hard work.

There are three main types of bonuses:

  • Individual bonuses: These are given to employees for meeting or exceeding individual performance goals.
  • Group bonuses: These are given to teams for meeting or exceeding team performance goals.
  • Spot bonuses: These corporate incentives are given to employees for a job well done, without any specific goal in mind.

Non-Monetary Rewards

Monetary rewards are not the only way to show appreciation. There are many other types of recognition that can be just as effective.

  • Public recognition: This can include announcing an employee of the month or giving out awards at company-wide events.
  • Private recognition: This can be as simple as a handwritten note or an email from the boss.
  • Social recognition: This can include posting about an employee’s achievement on social media or giving them a shout-out in the company newsletter.

When To Show Recognition

There’s no one-size-fits-all answer to when to show employee recognition. However, there are a few major occasions when appreciation is significant.

Employee Appreciation Day

Employee Appreciation Day is one such occasion. This national holiday celebrates employees’ hard work and dedication across the country. It’s an opportunity to let the team know that their contributions are valued and that they are grateful for everything the employees do.


Birthdays are another excellent time to show appreciation. A simple birthday card or e-card can go a long way towards making an employee feel valued.


Milestones are also a great opportunity for recognition. Whether it’s a five-year anniversary or major project completion, acknowledging an employee’s achievements is a terrific way to show appreciation for their efforts. Ultimately, the best time to show employee recognition is whenever there’s a chance! A little appreciation can go a long way towards building a positive, productive environment and organization.

Why Employee Recognition Matters – The Takeaway

Employee recognition matters because it can lead to improved productivity, lower stress levels, and better customer service. There are many different ways to show appreciation, including bonuses, financial incentives, public recognition, private recognition, and social recognition. The best time to show employee recognition is whenever there’s a chance. So, business owners should go ahead and show their employees some appreciation. A little recognition can go a long way!

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