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The importance of employee recognition and how to do it well

Michael Taras

Employee recognition is the act of recognizing your employees for the great work they do. It doesn’t have to be extravagant; sometimes, it’s as simple as saying thank you. The simplicity of recognition doesn’t diminish its importance in the workplace. An effective culture of recognition contributes to morale, engagement, confidence, and employee retention.

Continue reading to learn more about the importance of employee recognition, including the benefits to your business and how to establish a culture of recognition in your workplace.

What is employee recognition and why is it important?

When we say employee recognition, we don’t mean acknowledging employees with a superficial bonus structure. Sure, a little extra cash incentive for a job well done is always appreciated, but it doesn’t contribute to your company culture. It’s an antiquated form of transactional leadership that should remain in the past where it belongs. 

Transactional leaders aren’t all that inspiring, and they don’t offer much motivation beyond paying for the work that’s completed. Transformational leaders, on the other hand, are role models who inspire those around them to be the best they can be.

📚 Learn about the importance and benefits of transformational leadership versus transactional leadership. 

It’s important to offer your team authentic recognition. Authentic recognition is organic; it doesn’t wait for a performance review, and it does a lot more than pass out rewards now and again. It continually offers employees positive feedback that highlights their strengths and lets them know they’re appreciated. 

This simple act of expressing gratitude to your employees makes the workplace a more welcoming, inclusive, and supportive space where people feel seen and appreciated for who they are. When you invest in an employee, they’ll invest back into the company because they will feel like they’re an important part of it, as opposed to just another brick in the wall. 

Employee recognition is vital to employee engagement, retention, and productivity. 

Employee recognition benefits

Employee recognition boosts morale and confidence

One of the most obvious benefits of employee recognition is that it makes people feel good. Don’t you want to be recognized for all of your hard work? Well, since your team is made up of fellow humans just like you, so do they.

If you can pat your dog on the head and say “good boy” simply because he did his doggy business outside rather than inside, you can let your employees know the hard work they put into your company is appreciated. 🐶  💩

In addition to boosting morale, employee recognition builds confidence in your employees. They can approach their work knowing that they’re good at it—that their absence would be felt. If someone feels like anybody with two hands can perform their job, it leaves them feeling unfulfilled and unimportant. 

Consistently recognizing your employees enhances the confidence they feel in their role. They can take pride in the valuable work they do. 

Employee recognition increases engagement

More involvement from management and business owners will translate into more involvement from the whole team. Recognizing someone’s contribution to your business makes them feel included. They aren’t just a faceless clog in a cheerless organization; they are a crucial part of your business. Without their effort, your product or offering suffers. 

Don’t let the daily grind of work set the scene for engagement. Break up the monotony with sincere recognition and acknowledgment of a job well done. People are naturally more engaged when they feel appreciated. 

Employee recognition helps you retain great talent

Losing and replacing employees is expensive and time-consuming. Turnover can cost employers up to 33% of an employee’s annual salary. You can’t build an effective team if your workplace is in constant flux. 

Investing in the talent you have keeps that talent around. Recognizing employees for their efforts and achievements makes them feel like a part of the company. They can take some ownership over your business’s product or offering—even if that ownership doesn’t necessarily entitle them to any more money.

If a team member feels unrecognized or under-appreciated, they may begin to look for another workplace that will appreciate them. Whereas if they do feel involved and appreciated where they currently are, why would they look for employment elsewhere? 

Going out of your way to regularly recognize an employee's hard work will keep them loyal to your business year after year.

Employee recognition helps to attract great talent

Employees talk, which means word gets around about your company culture and what it’s like to work for you. Do what you can to make sure the conversation is as positive as possible to attract the best of the best. 

People want to work for an organization that appreciates them. If word gets out that your company culture prioritizes inclusivity, enthusiasm, and gratitude, you won’t need a recruiter; qualified candidates will come to you. 

Make your company a sought-after place to work by committing to consistent employee recognition. 

Employee recognition create a culture of continuous improvement

People don’t tire of being recognized. Receiving recognition makes you want to receive it again. Appreciating your team’s work and offering consistent, constructive feedback creates a team that’s continually striving to be the best they can be. 

Don’t settle for the status quo. Recognize your employees’ achievements and encourage them to go the extra mile with enthusiasm and support. 

💡 Create a culture of continuous feedback with Charma

Do employee recognition ‘programs’ work?

You don’t need a formal program to implement employee recognition. Formal programs often involve financial rewards and office politics. Recognition means so much more when it’s organic. You can use inexpensive and easy-to-use tools like Charma’s Kudos for a lightweight and engaging way to show your appreciation. 

The key is finding something that works for you and your team. You need a system that is actually used—one that both employees and management have a say in improving and fine-tuning.

It’s best to build a culture of recognition and appreciation to trigger intrinsic employee motivation as opposed to the kind of reward-based extrinsic motivation that some employee recognition programs provide. 

How to establish a culture of recognition

Not sure where to start with employee recognition? Here are a few ways to instill a culture of gratitude in your team and organization. 

Don’t delay employee recognition

A perfunctory summary of acknowledgments at the end of the month doesn't mean nearly as much as hearing you’re doing a good job in the moment. Recognize your employee’s actions as soon as possible after success. It’s important to capture the moment so that the recognition is as organic as possible. 

Be timely when recognizing employee achievements, or the moment may be forgotten. If a reason to recognize someone comes to mind, make a note of it, so you don’t forget to follow up and give kudos in the very near future.

Make employee recognition specific

Specific recognition will show employees that you’re paying attention. It also feels a lot more authentic. Passing an employee in the hallway and randomly saying, “You’re doing a great job, Bill,” is better than nothing, but it sounds obligatory, generic, and false. 

Recognize a specific success or action taken by the employee and include details around why it’s important. When did you notice their success? Why does it matter? How do their actions impact the company?

For example: 

  • An employee being recognized for being conscientious vs. an employee being recognized for always showing up on time and reliably completing deliverables.
  • An employee being recognized for a good month of sales vs. an employee being recognized for a good month of sales, which was better than any month this year, and brought in X important client, which will mean X for the company.

Specifically noting why you are recognizing an employee and placing their actions within the larger context of the company will make them feel fully recognized. They can point to a success and confidently say, “I did that!

Give employee recognition consistently

Don’t be sporadic or random with your recognition. In order to create a culture of recognition, it needs to become commonplace. Continuous feedback helps employees improve and continue to strive for greatness no matter their previous success. Consistent recognition and feedback keep your team from becoming complacent and comfortable with the status quo. 

No one on your team should be surprised that you care about or are aware of their performance. Build recognition, appreciation, and constructive feedback into your company culture by making it a regular, expected occurrence.  

Be sensitive to personality preferences

Recognize, but don’t embarrass. Be sensitive to the different communication preferences and personality types on your team. Not everyone wants to be unexpectedly called out in front of the whole company. While some love any chance for the spotlight, introverts and those on the shy side will retreat from this kind of recognition. 

If you’re recognizing a shy employee, do so on their terms with a thoughtful email or private Slack message. You could also ask them whether or not they want their success shared with the team, and if not, respect their preference. 

Make it easy for your team

Recognizing a fellow team member’s good work doesn’t have to be difficult—in fact, it shouldn’t be difficult at all. Make it as simple as possible for busy managers and the entire team to recognize each others’ positive contributions to the business. 

Charma has a built-in Kudos function that offers a friendly and playful opportunity to share appreciation with peers, managers, and employees. Recognition can be shared either privately, semi-publically with your Charma team or Slack/MS Teams channels, or broadcasted via Slack and MS Teams. 

📚 Learn more about delivering employee recognition with Kudos

Create a culture of recognition with Charma

Charma is the best practice toolkit for managers to organize, motivate, and engage their teams, beloved by managers, HR, executives, and ICs alike. Find tools to help manage agendas for one-on-one meetings and team meetings, action items, team collaboration, continuous feedback, recognition, and goals — all in one place.

With Charma, you can boost team morale, productivity, and employee engagement with continuous feedback and consistent employee recognition. 

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