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5 Benefits of Employee Recognition in the Workplace

It’s becoming more common knowledge that employees must be recognized in the workplace. To keep your talented staff and to encourage a positive, healthy workplace, it’s not a question of whether it’s really worth the investment—it is.

In this post, we’ll talk about the basics of employee recognition programs, how they can benefit your organization and the best practices for offering rewards and recognition.

What Are Employee Recognition Programs?

Recognition is a way of showing appreciation for the extra efforts or accomplishments an individual or team of people make. Organizations create employee recognition programs to recognize, appreciate, and reward their employees for their hard work, achievements, and dedication. Because this recognition often comes in the form of rewards, these programs are also called rewards and recognition programs.

In the past, employee recognition in the workplace was mostly in place to motivate team members. Examples include:

  • Incentive programs
  • Employee of the month programs
  • Years of service awards
  • Gift card programs
  • Department or team-specific programs that reward employees with treats, lunches, or small personal gifts

Employee recognition efforts were commonly associated with compensation and benefits. But to boost employee satisfaction, companies need to focus their recognition initiatives on multiple elements and take a more holistic approach to rewards programs. This can be a lot more effective than simply tying recognition to compensation.

Today, many companies understand the importance of employee recognition in boosting employee engagement, improving the employee experience, and fostering a positive workplace culture. They often use employee recognition software to create a formal recognition program that combines a points system, a social wall, and meaningful rewards to help employees feel appreciated.

Types of Employee Recognition

Every organization is different when it comes to giving out recognition and rewards. Therefore, how you appreciate employees will depend on a variety of factors, such as company needs, your business, and your budget. So, it’s up to you to figure out the best way to appreciate your team members and which rewards will resonate with them the most. Below are the most common types of employee rewards.

  • Written praise: Any form of appreciation that involves writing about how much you value an employee and saying thank you for their accomplishments. This could be in the form of handwritten notes or posts to the company social wall.
  • Verbal praise: Almost always informal in nature, verbal praise can be beneficial for sharing an appropriate thought in the moment. Many employees feel appreciated when a manager recognizes them for even the smallest wins. For example, a quick “great job” during a presentation or a quick speech about a job well done during a meeting can go a long way in making employees feel like their contributions matter.
  • Peer-to-peer recognition: Occurs when team members notice the day-to-day efforts of their coworkers that managers don’t have the opportunity to see. Peer-to-peer recognition can improve relationships between team members and foster a sense of belonging.
  • Performance-based recognition: Organizations give performance-based recognition when employees meet their quarterly or yearly SMART goals.
  • Effort-based recognition: Employees may not always be able to make huge accomplishments. However, you can still show them appreciation for something that takes a smaller amount of effort. You could reward employees for something as simple as closing a multi-thousand dollar deal or helping their teammate with one of their projects.
  • Milestone-based recognition: Reward employees when they reach certain milestones with your company, from their first day to work anniversaries.
  • Values-based recognition: Every company has values that are important to day-to-day operations. Work tends to have more meaning when employers use a recognition program based on company values.

Related: Employee Reward Solutions That Get Results

Employee Reward Examples

Creating a successful employee recognition program hinges on finding the right rewards to motivate and excite employees. And while everyone loves cash, monetary rewards aren’t always the best way to empower your workforce.

Let’s look at the best types of rewards to give your employees as part of your recognition program.

Office perks

  • Dinner with the boss
  • The best parking spot
  • Assistant for the week
  • Free lunch for the team


  • Festivals or sporting event tickets
  • Holiday in the sun
  • Wine tasting or brewery tour
  • VIP access to their favorite band
  • Extreme adventure day
  • Cruise for two
  • Spa day


  • Branded clothing/swag
  • Music subscriptions
  • Plants
  • Book of the month
  • Charitable giving
  • Gift cards
  • Coffee memberships
  • Care packages
  • Personal recognition note from the CEO

Professional development

  • Classes and courses
  • Office resource library
  • Seminars
  • Session with a financial advisor
  • Sponsored content on LinkedIn or Forbes

5 Key Benefits of Recognizing Employees

From a very early age, we crave recognition from parents, teachers, and friends. it’s a deeply rooted desire, especially during developmental periods, to receive positive affirmation from the people around us. This continues to hold true as we move into the workplace.

So, it’s no wonder employee recognition remains one of the most important ways for organizations to show their appreciation for staff. And it makes sense that lack of recognition is one of the most common causes of turnover.

To really understand the true value of employee recognition, let’s take a look at some of its benefits.

1. Increases Employee Retention and Engagement

Employee engagement is the emotional commitment an employee has to an organization and its goals. So, when an employee is engaged, they care more about their work and their company. Unfortunately, a lot of organizations are failing to engage employees. In fact, even before the pandemic, only 30-35% of the workforce was engaged.

Even though this doesn’t necessarily mean the other 60-75% of employees dislike their jobs and are ready to quit, it does show that there’s room for improvement regarding employee engagement. And this is where an employee recognition program can step in to fill the void.

When you recognize employees for their achievements, this can lead to increased motivation, a sense of pride, and increased self-confidence at work. This can, in turn, boost employee initiatives and their ability to take responsibility for their work.

In other words, team members feel a sense of purpose–like their work matters to your company. When an employee experiences this emotional commitment, this means they’re more likely to enjoy their work and produce more meaningful results.

2. Improves Company Culture

When company values align with individual values, employees feel satisfied and empowered. Recognizing your employees for certain behaviors is an excellent way for your company to set an example for how you want them to perform.

It goes without saying that when a company recognizes employees for their contributions, it plays a huge role in making it a place where they want to work. As a result, they’ll begin to feel like the company is part of their lives. This can create a healthy and positive work environment where everyone is more willing to work together and put in extra effort for important tasks.

3. Boosts Productivity

When leaders recognize employees for making progress towards their goals, this provides value to their teams and encourages them to be more productive. So, when employees receive recognition, it motivates them to work harder. This tendency has a psychological basis. The term for this, of course, is positive reinforcement.

Let’s look at an example. Imagine that one of your employees completed a task before the deadline and exceeded your expectations. So, you reward them with public praise at the weekly company meeting.

Enjoying this acknowledgment of their achievement, what is the employee more likely to do in the future? Chances are, they’ll keep performing at a high level because they know what they need to do to be recognized for their work.

This isn’t to say that employees should work harder so that they can be noticed. However, they’ll feel more positive about putting their all into their work because they know their contributions won’t go unnoticed.

Related: How Memorable Employee Recognition Awards Can Change Your Workplace

4. Improves Employee Relationships With Team Members

Building a culture of recognition can improve mental health and the overall wellbeing of employees. Highly successful employee recognition programs involve peer-to-peer recognition, which helps employees form strong social connections at work. This results in happier and healthier employees, creating a positive impact on their experience at your company.

Employees who have a friend at work are seven times more likely to feel engaged. In an increasingly remote working world, it’s more important than ever to make employees feel like they belong. And one of the best ways to achieve that is with recognition from colleagues, which can make them feel more connected to their co-workers and the entire organization.

5. Strengthens Your Bottom Line

Employee recognition programs can boost sales, increase profits, and improve employee retention. But how can something as simple as recognizing employees have such a significant impact on your overall bottom line?

One reason has to do with the fact that rewarding and recognizing employees boosts engagement. Disengaged employees can cause your company to lose thousands of dollars in revenue. That’s because they’re often not concerned about being efficient during their work hours. Many of these employees are easily distracted and tend to waste time.

A lot of organizations may take certain measures to prevent distractions. For example, they may block social media sites from company computers or create rules that penalize employees for coming back from breaks late.

However, these tactics can further alienate your employees rather than make them want to be productive. As mentioned earlier, what really motivates people is positive reinforcement. People are more likely to be productive if they know their work will be recognized.

Another way employee recognition can increase your bottom line is through promoting professional development and growth. According to a Gallup study, companies with the highest engagement levels see employee recognition as a means to develop and stretch employees to new levels of success.

Recognition programs that involve helping employees improve their job skills—or learn new skills altogether—can boost performance and productivity. Consequently, these employees can produce high-quality work that’s a lot more likely to get the results you desire.

How to Build an Effective Employee Recognition Program

Successful employee recognition programs can enrich company culture, reduce turnover, and provide a fulfilling employee experience. It can be difficult to know where to start when it comes to creating a strong recognition program that makes your organization a great place to work.

To help you get started, here are a few tips for designing an employee recognition program that gets results.

1. Understand the Characteristics of Effective Recognition

Employee recognition should be timely, frequent, and specific. So, make sure you’re recognizing employees as soon as possible to produce a clear connection between the positive behavior and rewards. Also, reward employees regularly for their contributions, and be specific about why you’re rewarding them.

2. Define Clear Recognition Program Objectives and Criteria

Be clear about the behaviors and actions you’d like to see from your employees. Determine:

  • The types of behaviors you’re going to reward
  • How you’re going to reward certain behaviors
  • How often recognition should occur
  • Who recognition will come from

3. Use a Multifaceted Rewards and Recognition Program

Create holistic rewards and recognition program that includes both monetary rewards and non-tangible rewards. This varied approach allows you to create a more complete system for recognizing employees, as each type of reward complements the other.

4. Give Employees Voice and Choice

Ask your employees how they’d like to be recognized and rewarded. Delivering the rewards they want will make your recognition program a lot more meaningful. You can learn their preferences by doing a survey and asking everyone to rank the reward options most important to them.

Creating a Culture of Recognition for a More Engaged Workforce

It’s clear that regularly rewarding employees for making contributions to your business can be highly beneficial to your bottom line. Indeed, devoting time to rewarding and celebrating your hardworking employees is critical to your success.

Make rewards and recognition a part of your organizational culture, and you’ll build an emotionally invested workforce that’ll stay with your company for the long run. If you’re feeling overwhelmed, let Xcleration step in to provide employee rewards and recognition software to help you achieve your recognition and engagement goals.

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