How Important is Recognition for Employee Engagement?

How important is Recognition for Employee Engagement? To answer this question, let’s pose another question! What is employee engagement in the first place?

Very broadly, employee engagement is the art and science of making employees feel good – about themselves, about the organization, about working in the organization and about working with each other. This ‘feel-good factor’ can be achieved through tangible and intangible means.

According to a report by the Society of Human Resource Managers, companies with good employee recognition programs and career development guidance saw a 63% increase in employee productivity. The report also suggested that such companies experienced a 58% return on their profit margins, a 52% increase in customer retention, and a 51% increase in employee retention.

In today’s day and age, social recognition plays an important role in what makes us feel good. People are thirsting for likes and comments on social media like Facebook, Instagram, etc. In a similar way, employees value social recognition of their achievements at the workplace. For confidentiality and data privacy reasons, the reach of these recognition platforms might be restricted to within the four walls of the organization.

Another report by SHRM terms peer-to-peer recognition to be way more effective than managerial recognition, with 41%of the companies that implement this mode of recognition experiencing a positive increase in customer satisfaction.

Monetary rewards can play can be an additional factor on top of the social recognition.  Even non-monetary benefits like conferences, training programs and direct interactions with the top brass might do equally well if not better!  All adds up to the ‘feel-good factor’ of employee engagement.

The most critical aspect of recognition is spontaneity, appreciation as something good happens. It could be a casual pat on the back or a round of applause at a team meeting – it all makes a difference, provided it’s timely. Obviously, the quantum or the perceived value of the awards needs to be calibrated with the level of achievement for it to make sense

Recent Harvard Business Review has also stated that an effective recognition strategy helps create 30% more productive employees besides enhancing their creativity three times. It also helps in creating 37% more successful salespeople than the less engaged ones.


All said and done, recognition plays an integral part in employee engagement no matter how it is executed.

At the end of the day, employees feeling happy is what matters most whether is a pat on the back, a trophy, a shopping voucher or a trip to the Bahamas!

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