For anyone who has felt unappreciated at work, here’s a sobering statistic.
According to a 2024 Gallup survey, only one in three U.S. employees received some form of recognition or praise for their work in the previous seven days. That means most working people are toiling without any acknowledgement of the work they’re doing.
The survey results are surprising for two reasons.
First, it’s well known that consistent, timely employee recognition can boost engagement and performance while also helping to reduce attrition.
Second, it’s also well known that employee recognition is one of the most cost-effective ways to improve the overall employee experience and performance.
Why would employers ignore something that has proven to be so effective? It may be that employers are overestimating how much recognition they’re handing out.
In surveys that seek responses from employers rather than employees, between 80 and 90 percent of employers claim to have some form of official recognition program. That kind of response stands in stark contrast to what employees are saying.
What, you may be asking, is going on?
Although recognition comes in many different forms, not all of them are created equally. The most important thing to remember is that not recognizing the efforts of your employees or choosing the wrong approach could do more harm than good.
The science behind employee recognition goes back 100 years to a series of experiments at the Western Electric Hawthorne Works in Cicero, Illinois. The experiments were designed to see if changes in the physical conditions of the factory—such as lighting—affected productivity. The results initially suggested that small environmental changes did boost productivity, but the company found that after the study period ended, performance reverted to previous levels.
It would take another two decades before behavioral scientists figured out that the workers weren’t responding to the changes in the environment; they were responding to the experience of being observed. Although academics still debate the true impact of what has become known as the “Hawthorne Effect,” it has helped guide our deeper understanding of how recognition can improve productivity.
In the decades since, the appetite for employee recognition solutions has increased, with most organizations offering some form of recognition or reward program as part of their broader compensation and benefits offerings.
However, given the fact that employees continue to complain about the lack of regular recognition for their work, it’s fair to ask whether employers understand the cause and effect of specific types of recognition programs. Without thoughtful planning, introducing the wrong kind of program can backfire and erode productivity.
The growth of the employee recognition industry has prompted a broad array of solutions, all of which have the potential to provide employees with the feedback they crave. Knowing which kind of recognition solution is best for your organization is the key to achieving the right results.
The major categories of recognition programs include:
Rewards. One of the most common recognition programs involves a complex system where employees earn points for work-related accomplishments that can be redeemed for various rewards. These can range from material goods and gift cards to experiences or additional days of paid vacation. Many organizations even employ an online leaderboard to show which employees are earning the most points.
Money. In many organizations, the annual performance bonus forms the core of employee recognition programs. Sometimes, bonuses are applied equitably, almost like a profit share. In other organizations, particularly those focused on sales performance, bonuses are tied to hard key performance indicators such as total sales or new contracts signed.
Organization-wide recognition. A venerable way of calling attention to high-performing employees, the regular awarding of accolades has long been accepted as a way of creating positive competition among employees to achieve performance goals. However, the “employee-of-the-month approach” is only one way to provide this kind of recognition. Sometimes, public acknowledgement of achieving a work goal, an anniversary, or another milestone can be effective at building engagement.
Direct recognition. One of the lowest-cost but highest-impact ways to reward good performance is through direct acknowledgement from a manager or leader. This kind of recognition has proven to be one of the most effective ways to boost employee performance.
Any one or combination of the programs listed above can improve engagement and hold the line on attrition. However, most types of recognition can backfire if the design and application aren’t done properly.
In 2022, researchers from the Frankfurt School of Finance & Management and the University of Cologne investigated whether offering employees cash bonuses and other perks could curb chronic absenteeism. So, they created two study groups of retail store apprentices: One was given the opportunity to earn points for regular attendance, which could be translated into a monthly cash bonus or additional paid vacation days; the other group was offered no incentives for attendance.
After a year, the researchers found that the absenteeism in the group offered bonuses had increased by 45 percent. The study’s lead researcher concluded that “apprentices with the money bonus felt less guilty about being absent, despite not being sick, and felt less obliged by their contract to always come to work. The monetary bonus led to absenteeism being perceived as a more acceptable behavior, as monetary incentives were being provided for a behavior previously considered normal.”
Where did this program go wrong? It assumes that all working people are motivated by money or material rewards. Although some people are conditioned to respond to this approach, many more of us are looking for much more basic rewards: Most of us want to know that our work is valuable and noticed by the people we work for.
Bonus schemes aren’t the only example of recognition or reward programs that sometimes backfire.
Peer recognition programs, where individual employees are singled out for accolades, have been used by many employers to not only reward good performance but also to motivate other employees to achieve the same results. However, recent studies on the impact of organization-wide recognition programs show that they have the potential to discourage and frustrate more employees than they motivate.
If there are unintended downsides to bonuses and organization-wide recognition, then what types of initiatives are the most effective? There’s a case to be made that any form of recognition can be helpful in the right circumstances. However, if you look closely at what employees are saying in surveys, direct recognition from their managers and other senior leaders could be both the most impactful and the most cost-effective way to motivate.
Most working people know the power of a random compliment. An email from a direct manager or an unexpected mention by a C-suite leader can go a long way to improve morale, well-being, and engagement.
A widely cited Gallup poll found that nearly 30 percent of respondents said the most meaningful recognition they’d ever received was a direct comment from a manager. A further 24 percent said their most impactful moment of recognition came in an interaction with a “high-level leader or CEO.”
Results like these reveal the power of direct interactions between managers and employees. However, as we noted earlier, most working people don’t experience this kind of recognition—or if they do, it’s infrequent.
Leaders not only need to be mandated to provide direct feedback to the people they lead, but they also need to be equipped with the skills that give them the confidence to engage in the informal interactions that empower and motivate their employees.
Whether it’s delivered in a formal program or an informal conversation, recognition must be thoughtfully and deliberately designed. Many organizations seize upon a particular type of recognition program without knowing the potential for blowback.
Here are the things to consider before investing in any kind of recognition program:
The reward and recognition industry has provided employers with a nearly endless array of programs to motivate employees. However, scientific research has revealed that many of these programs, while well-intentioned, aren’t producing the desired results.
The only true way to achieve desired outcomes is to take a step back and figure out exactly what it is you’re trying to accomplish. Once you’ve defined your desired outcomes, it becomes easier to identify the behaviors and activities you need to promote with your employees.
In many instances, your employees don’t want tokens, certificates, or gift cards. What they want is clear actions and expectations on how to be successful, and consistent acknowledgement that they’re valued members of your team. That’s a reward that costs nothing but carries enormous value.