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How Important is Recognition for Employee Engagement?

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How Important is Recognition for Employee Engagement?

An engaged workforce is critical for the success of any organization. Employee recognition is one of the means to drive engagement. Let us understand how important is recognition for employee engagement.

What is Employee Engagement?

Very broadly, employee engagement is the art and science of making employees feel good. about everything.

About themselves, about the organization, about working in the organization, and about working with each other.

How can Employee Recognition Drive Engagement?

This ‘feel-good factor’ of employee engagement can be achieved through tangible and intangible means.

What are the ways to drive employee engagement through rewards?

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.

Long Service Award

The same 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.

Integrate Reward and Recognition with Innovation Efforts

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.

Similarly, employees value social recognition of their achievements at the workplace.

Social Recognition as a Multiplier for Employee Recognition?

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.

Enable Social Recognition for Innovators 

Monetary rewards can play can be an additional factor on top of social recognition. 

Even non-monetary benefits like sponsored conferences, training programs, and direct interactions with top brass might work great! 

Both monetary and non-monetary rewards add up to the ‘feel-good factors’ for engaging employees.

Integrate Reward and Recognition with Innovation Efforts

The most critical aspect of recognition is spontaneity, appreciation as something good happens.

A pat on the back or a round of applause at a team meeting; all make a difference, if on time.

The perceived value of the award needs to be calibrated with the level of the achievement.

Awards Event

A 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!

Sagar Chaudhuri

Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of experience in the corporate world and entrepreneurship. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank, in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn

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HiFives is a global employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. It is used by 100+ large enterprises, small businesses and startups in manufacturing, retail, technology, financial services and media, across 25+ countries.