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Back to the Basics: The Importance of Employee Recognition

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Back to the Basics: The Importance of Employee Recognition

Attracting and retaining high-performing employees in the face of tough competition for talent is one of the key challenges for organizations today. As most organizations look for strategies to drive employee motivation and satisfaction, they need to understand the importance of employee recognition.

Overview of Employee Recognition

Fun Awards

Employee recognition can be defined simply as a set of practices adopted by an organization to acknowledge the efforts of their employees and value their contributions.

Such programs are highly likely to have a positive impact on employee motivation, productivity, and performance.

Long Service Award

Hence, experts believe that employee rewards and recognition programs should be integral to the HR strategy of organizations.

Studies show that over 65% of employees do not feel recognized at work

What are the Key Benefits of Employee Recognition?

Employee recognition can have a positive impact in various ways for an organization.

Here are a few of the key areas of impact:

1. Employee Engagement

Social Distancing

Timely recognition ensures that employees attach greater meaning and value to their everyday tasks.

Hence, recognition makes them more engaged and take a greater interest in various organizational activities as they make an effort to contribute positively to the same.

2. Positive Organizational Culture 

Significance of Corporate Culture

Recognition can contribute to the workplace culture by driving greater satisfaction among employees.

So, this, in turn, can lead to a more cordial and collaborative work environment.  

Read Employee Recognition Program Can Drive Cultural Change

3. Employee Retention


Recognition can drive higher levels of employee satisfaction and positive work culture. 

Hence, such employees might be less interested in seeking alternate employment options.

Also read: Impact of Employee Rewards and Recognition on Retention

4. Alignment with Corporate Values

Social Recognition as a Multiplier for Employee Recognition?

Also, recognition can play an important role in reinforcing a company’s core values. 

Hence, by recognizing specific behaviors and achievements, organizations can align the workforce to their corporate values.

5. Productivity and Efficiency

Factory Worker

Employee recognition can lead to higher motivation, commitment, and ownership among employees.

Hence, this, in turn, can lead to greater business productivity and profitability.

6. Innovation

Recognize Innovation Efforts and Remove Fear of Failure

Recognition can motivate employees to higher levels of engagement and ownership. 

So, employees feel motivated to ‘give back’ to the organization that has valued their contributions.

Hence, recognition can lead to greater innovation and process improvement.

7. Employer Brand Value

Employer Branding

Organizations with well-developed employee recognition programs are likely to have an edge in the talent competition.

Hence, potential candidates get the assurance that the organization values the contribution of its employees.

Satisfied employees are more likely to spread positive word-of-mouth about their organization and also refer their friends for open positions.

8. Employee Morale and Confidence

Empower Employees and Create an Innovation Funnel

Recognizing employees for their efforts and achievements, especially during challenging times boosts their morale and confidence.

Therefore, this keeps them moving forward and assures them that they are aligned with the business objectives of the organization.

Also read: Importance of Employee Recognition during difficult times

How can Employee Recognition be made more effective?

Organizations need to implement effective employee rewards and recognition programs tailored to the needs of their business and their workforce.

While the exact design of a program would depend on the organization’s industry, business objectives, and workforce profile, certain common factors ensure the effectiveness of such programs across organizations.

Here are a few:

How can Employee Recognition be made more effective

1. Clearly-defined Criteria

How to Build an Effective Business Case for Employee Recognition

For any recognition program to be successful, it should be based on clearly defined criteria.

Hence, this helps in setting realistic expectations among employees, promoting desirable behavior and performance efficiency, and ensuring transparency and credibility of the program.

2. Timely

Recognition delayed is often recognition denied’. Any recognition loses its impact if not offered at the right time. 

Hence, prompt recognition is key to the success of a recognition program.

3. Aligned with Business Objectives


Also, organizations need to make sure that their rewards and recognition programs are well-integrated with their key business objectives. 

So, it provides a sense of direction to the employees and motivates them to take the right actions to fulfill these objectives.

4. Varied Enough to Maximize Coverage

Enable Social Recognition for Innovators 

The employee recognition programs should offer sufficient opportunities to all members of the workforce to perform and be recognized.

Hence, these programs should have different types of rewards and recognition, targeted at different groups of employees.

Also read: Comprehensive Guide to Different Types of Employee Awards

5. Properly Planned and Implemented


The success of an employee recognition program in any organization is heavily dependent on how well it is planned and implemented.

The impact of the program needs to be tracked properly and course corrections must be done from time to time as required.

Also read: A Step-by-Step Guide on How to Set up an Employee Recognition Program

6. Focus on Employee Experience

Why Employees not happy with the Recognition Program?

Employee experience is one of the critical factors that determine the success of any recognition program.

The use of employee recognition technology platforms can help streamline the processes and enhance the employee experience.

Hence, regular feedback from employees must be captured and acted upon to keep the program on track.

Also read: Technology Drives Successful Employee Recognition Programs


Organizations need to clearly understand the importance of employee recognition for their business success. They need to develop effective programs that are aligned with their business objectives and the needs of their workforce.

Sagar Chaudhuri

Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of corporate and entrepreneurship experience. In the past, Sagar has worked in leadership roles with companies such as Genpact, Infosys, and ICICI Bank. 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.