Why employee recognition is vital to your business’ success

It’s no secret that companies that operate in a recognition and appreciation culture have fewer problems with employee retention. Employees want to feel that their contribution is important to their company’s mission, and company exit surveys frequently reveal that a lack of recognition plays an important role in employee turnover.

Recognition can’t replace a paycheck, but both are tools for acknowledging the worth of those who work for us. The National Association for Employee Recognition says, “Recognition is one of the most effective ways to reinforce an organization’s culture, support its objectives, and retain top performers.”

It’s often reported that recognition is the most important factor in keeping people motivated, committed, challenged, and excited about achieving results. While some managers think that pay is the most important factor in whether employees stay or go, employees consistently rank recognition for their contribution to the company as their number one reason for staying or leaving.

In another recent survey, employees rated managers’ expressions of appreciation as the most important incentive of all. Fifty-eight percent said they seldom, if ever, get a personal thank-you from their bosses. Two out of every three said they don’t get enough recognition, and they want more of it.

Recognition doesn’t have to be expensive. Most employee recognition award programs, when factored over a 12-month period, turn out to be a very cost-effective way to acknowledge, honor, and commend workers.

When our team has been working nonstop for a couple of days, we’ll declare a Culver’s Day and send someone out to bring back the best frozen custard around. I can guarantee that even if everyone here is on their last bit of energy, all it takes to boost morale and create excitement again is to make this announcement. This little gesture lets everyone know that their good work is appreciated and their efforts are recognized.

According to Keeping the People Who Keep You in Business by Leigh Branham, a study done by Frederick Hertzberg, the father of modern worker motivation theory, states that the factors that created the greatest job satisfaction were, in order:

  • Achievement
  • Recognition
  • The work itself
  • Responsibility
  • Advancement
  • Growth

The book goes on to say, “You may be measuring what counts, and what you are measuring may be getting done, but if you are not recognizing and rewarding what gets done, the productivity of your people will decline along with your retention rates.”



There are many ways to award and reward staff members, including cash and praise, travel, clothing, coupons, plaques, trophies, medallions, and custom jewelry. Cash gets spent and can’t be shown and bragged about.

Whether it’s a gold watch, a plaque, a unique piece of crystal, or anything in between, all are forms of recognition and celebration. They all have a place. Wrote Patricia K. Zingheim and Jay R. Schuster in Pay People Right, “We do feel that a solid pay approach and strong supporting recognition and celebration are inseparable partners in making rewards communicate effectively. Recognition and celebration don’t replace pay; they’re in addition to pay.”

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