Motivating Employees & Boosting Business with Employee Recognition

Employee recognition is more than just a pat on the back; It’s a strategic approach to acknowledging and rewarding contributions, big or small. It could significantly improve your company culture and employee experience too.

In this blog, we'll explore why employee recognition matters and its impact with actionable strategies to implement it effectively.

The power of Employee Recognition

Imagine this: You spend all week tackling a tough project, going above and beyond to get it right. Finally, you deliver results as required. But no one seems to notice all the hard work you put in.

Employee’s POV

As an employee, that wouldn’t exactly leave you feeling motivated. This in turn will lead to you feeling:

• Discouraged and Frustrated: It's disheartening when all your effort seems to have gone unnoticed, leading to doubt in your hard work, which can be demotivating and make you question your effort.


• Unseen and Unheard: Being unseen can be lonely, making you wonder if your work even registers with your team or manager.

Employer’s POV

Now let’s consider the employer’s perspective. This lack of recognition can have serious consequences leading to situations where you need to handle:

• Disengaged Workforce: With a "do the minimum" mentality which leads to a less productive and motivated workforce.


• Increased turnover risk: Feeling undervalued leads to job hunting, costing employers in recruitment and training.


• Loss of knowledge and expertise: Departed employees take their skills, resulting in a lack of an Up-skilled workforce hindering innovation and slowing projects.


• Damaged company culture: Unrecognized effort breeds negativity, and resentment, and hinders collaboration.

In this case, both the parties have seemed to reach an impasse.

Now let’s see how proper employee recognition can change this.

Employee recognition is more than just a feel-good exercise, it’s about acknowledging your team’s efforts to keep them running. Even a simple “thank you” or “we see what you’re doing, and it matters” can make a huge difference. It can be both monetary and non-monetary. It directly impacts the employee’s behavior (individual and team) and increases their productivity by more than 12% on average.

Sounds like a win-win, right?

MONETARY

• Bonuses
• Commissions
• Profit Sharing
• Gift Cards
• Paid Time Off (PTO)
• Stock Option

Non-Monetary

• Public Recognition
• Promotion
• Extra Responsibilities
• Professional Development Opportunities
• Team Lunch
• Volunteer Opportunities
• Personalized Gifts
• Handwritten Thank-You Note
• Employee of the Month

But be mindful to not confuse it with appreciation. While both are important and are often used interchangeably, there’s a big difference between them.

It is natural to think why this distinction is needed. But understanding it is important because Recognition and Appreciation are given for different motives.

The employees can't be successful in doing a task all the time and it is inevitable to not have setbacks and challenges along the way. So, focusing the positive outcomes solely on the tangibility of results makes recognition very subjective to the project type. In that case, you miss out on many opportunities to connect with and support your team members to appreciate them, which may make them feel unheard and their efforts unseen.

But with proper recognition, it's not just the productivity that has a positive effect, it also has a direct impact on employee experience, company culture, and even business outcomes. Let’s find out how.

Impact of Employee Recognition on various aspects

By now we have a clear view of why employee recognition matters but that’s not enough. To understand the full potential of employee recognition it is important to understand how it’s going to impact various touchpoints.

1. Impact on Employee Experience

While the power of recognition is often overlooked, over 40% of employees rate recognition from managers as the most impactful on their performance and employee experience making them more likely to stay. It’s not just about the benefits that count but also the feeling of being valued during their tenure. Believe it or not, the employees who do not feel valued are twice as likely to experience high levels of stress says SHRM .

Being recognized not only promotes emotional well-being but can lead the employees to:

• Being more committed to organizational goals


• Having a sense of belongingness within the organization acts as an encouragement for them to actively participate in team activities and company initiatives.


• This promotes a culture of appreciation and support driven by positive interactions among peers and colleagues.

One of the ways to ensure this is by tracking the Happiness & Mood Index.

Happiness & Mood Index.

This combination of quantitative and qualitative methods helps organizations understand how employees feel and what factors influence their well-being, leading to informed decisions on improving workplace culture and policies. is a great way to increase response rates and show appreciation for their time. We further incentivize their efforts with scratch cards (consisting of both monetary and non-monetary rewards) after submitting the survey. after submitting the survey.

2. Impact on Company Culture

Discussions about employee recognition often focus on its impact on autonomy and inspiration but often fail to realize the importance of visibility but Employee recognition programs make these acknowledgments visible. Adding to this a study shows that 37% of people see affirmation, feedback, and reward as the most effective for motivating employees to do their best work.

And why not? Firstly, it establishes a clear standard for what kind of work is valued within the company. Secondly, by witnessing recognition for going the extra mile, employees are encouraged to do the same. Ultimately, this increased visibility promotes a more positive and productive work environment, positively impacting the company culture which serves several purposes.

• When employees are recognized for their behavior that aligns with company values, it encourages employees to employ them.
• Recognizing team members for their contributions reinforces the idea of being valued for their contributions toward the team's success.
• When employees feel appreciated, they are happier and more satisfied in their jobs. This leads to higher levels of job satisfaction and overall happiness.

Southwest Airlines has seen its outcomes by integrating recognition practices like the “Applause program” into various aspects of its operations to make the employees feel valued and appreciated.

3. Impact on driving business goals

Till now we discussed how employee recognition contributes to bettering employee engagement and, in this course, it must have crossed your mind, why do we need to understand this?

The answer is simple. it's not just the enthusiasm to work that is affected by recognition but also the business goals.

According to Harvard Business Review , more than 40% of employed Americans feel that if they were recognized more often, they would put more energy into their work making recognition a core driver for achieving business objectives and goals. When put to use can help in –

• Increasing profitability by bettering employee performance leading to higher revenues and margins.
• Employees who are committed and driven are more apt to provide outstanding customer service, resulting in increased levels of customer satisfaction.
• Employees who are acknowledged are more inclined to support the company, enhancing its brand and reputation. This can have a positive effect on business objectives in terms of brand visibility and managing reputation.

As done by Microsoft . By launching employee recognition programs such as the Customer Obsession Awards, they highlight the significance of customer loyalty in boosting revenue expansion. These programs not only acknowledge outstanding performance but also inspire employees to synchronize their efforts with the company's strategic goals.

The power of employee recognition is undeniable. But employee recognition doesn’t work on a one-size-fits-all approach. So how do we decide what is the employee recognition option for you? Keep reading to find out.

Different ways to effectively recognize your employees

While there are many ways and options for employee recognition, not all carry the same impact, but one fact remains the same – All employees are open to acknowledgment and appreciation.

Let’s look at some of the most effective ways to recognize employees.

• Public Display of Achievements
• Know what your employees want
• Growth-based recognition programs

1. Public Display of Achievements

Building on the power of social recognition methods offers a compelling and interactive way to celebrate achievements.

These platforms whether physical (think an employee recognition board) or digital (like a VegaHR’s social intranet ), can showcase outstanding accomplishments and project successes. By sharing these wins company-wide, social recognition amplifies the sense of appreciation for top performers, further boosting morale and inspiring others to excel. This creates a virtuous cycle of recognition and motivation, ultimately leading to a more engaged and productive workforce.

2. Know what your employees want.

To maintain the effectiveness and engagement of employee recognition programs, it is important to gather consistent feedback from employees on their preferred method of recognition.

One way to go forward with this is by analyzing how the employee feels about the type of recognition by judging various aspects like growth trajectory, mood analysis, employee engagement, and well-being through pulse surveys

After receiving the survey, the employers can analyze with Vega through our end-to-end analytics dashboard assisting in customizing employee recognition processes and programs to align more closely with employee preferences.

While filling out these surveys might feel a little dull, incentivizing the process is a great way to increase response rates and show appreciation for their time. As done by Vega Hr, the incentives are often in the form of cash or points that can be redeemed for items.

3. Growth-based Recognition programs

Having a personalized growth journey mapped based on your employee’s performance enables them to take smarter steps. This transparency is enabled through Vega HR’s growth journey dashboards help to eliminate any perception of bias. Recognize employee cues and automatically trigger rewards for each event and achievement along your employees' professional and personal path.

By doing so you can give the right nudges in the form of recognition, feedback, and rewards throughout the lifecycle. This adds to the sense of trust in the employee recognition programs.

Wrapping up!

Congratulations now you are fully updated on the importance of employee recognition and how it impacts your organization.

If you’re still in search of an employee rewards and recognition platform to create an outstanding work environment and motivate your employees to be at the top of their game, then your search ends here!