What is the importance of positive employee recognition?

Don’t you feel happy when someone says “THANK YOU”? Two simple words but it speaks a lot, right? It makes you feel that you are being appreciated and valued for the work or the help given to the concerned person. This is what it seems to be recognized. In an organization too, employees who are the assets of the company expect such kind of recognition. A simple ‘thanks’ makes them feel better and they tend to leave all their complaints or frustrations behind.

importance of positive employee recognitionAccording to Forbes, today there is a $46 billion market for employee recognition (gold watches, pins, thank-you awards ,plaques etc.), and our research shows that companies spend between 1-2% of payroll on such stuff. This is a huge market.

People crave for acknowledgement. This is universal as it can be seen in every stage of life. In Maslow’s ‘Need Hierarchy Theory’, the third level of need i.e. Love and belonging highlights this fact. Human beings love to have a sense of acceptance among various social groups like colleagues, friends, relatives, family and peer groups. This gives them mental satisfaction, increases motivation and confidence.

Let’s start with the meaning of Employee Recognition.

 What is Employee Recognition?

It is reward given by the management to the employee for achieving targets and delivering quality work. This is done to make the employees believe that their work is being noticed and appreciated. It also gives them the needed push to perform better.

 Management does not take employee recognition seriously until there is downfall due to absenteeism, turnover, low productivity and other calamities. Such distressful situation acts as a wake up call for the organization, but then it becomes too late to make any change.


  1. Employees like to be acknowledged for their work. A simple thank you by the manager makes them happy and delighted. A paycheck is not enough. They should be appreciated and thanked so that they feel valued and motivated. An employer should not forget that employees are the pillars of the organization which decides its stability.
  1. Employee recognition is a fundamental human need. According to author Dave Ramsey, “The feeling and reality of acceptance gives people the best opportunity to become their best. People yearn for approval”. A 5 year kid also decides to perform better if he is appreciated in front of students.
  1. Workplace should be a place where both employee and management share a common goal and work towards achieving those goals. You thank your investors for their support and co-operation, then why not your employees? You want your investors to be with you through thick and thin, for the same reasons you need to thank your employees.
  1. Employee recognition is very important to have a smooth relationship. It enforces communication between top and bottom level employees, which is very important for any relationships.
  1. When an employee is praised and rewarded for his good works, he feels motivated to do more. One should know that force is not the only tool to get the work done. Motivation is much effective and powerful tool that touches a person’s heart and makes them to do their work voluntarily.
  1. If an employee is appreciated or praised for his particular behavior, he tends to make a note of it and continue the same behavior in the future. Employee recognition leads to productivity. I.e. Performance = Recognition = Motivation = Quality work = Productivity.
  1. Employee feels satisfied when he gets to know that the management is satisfied with their work. E.g. When a customer is satisfied with the product he is using, what happens? It leads to customer loyalty. Similarly when an employee is satisfied he becomes loyal to the organization.
  1. Due to globalization, high competition and changing needs of people; it is very difficult to retain the best talent. If the organization tries to build a connection with his employees, many will stay loyal to the organization and never think of leaving even though a better opportunity awaits them. In this case employee recognition and rewards act effectively.
  1. Absenteeism and stress can be avoided through employee recognition. Employees tend to work much harder and come to office regularly if they realize that their work is recognized and they will be awarded for the same.
  1. Employee turnover can lead to increase in cost. To hire a new employee, recruitment and training costs are involved. On the other hand there is no cost involved in retaining an employee. Employee recognition helps to reduce such cost and increase profits through better productivity.

According to author Dave Ramsey, “Where there is no recognition, it is very difficult to have passionate, creative, motivated team members”. It is not that employees will only be the beneficiary. The organization will be benefiting more than anyone else. There is a saying that “You can catch more files with honey than vinegar” which means politeness and care can work a lot more than mere demands.

 So, why waste time? Spread the smile and make your employees happy! Just start with a simple “Thank You”.

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