Employee recognition guide

7 benefits of employee recognition (and why it's important)

Why is employee recognition important?

If you think your employees are coming in for just a paycheck and ping pong table, think again. More and more companies are putting employee recognition and adequate rewards at the forefront of how they run their business. After all, where would you be without the people who dedicate their time and talent towards your business goals? 

Employee recognition and rewards should always be given genuinely — they’re no sneaky tricks to boost sales for the next quarter. Instead, recognition should be a regular thing. If you recognise and reward hard work on a regular basis, you’ll reap more benefits than just those temporary peaks in productivity. 

Let’s look at what long-term and regular employee recognition will add to not just the happiness of your employees, but also to your business.  

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Recognising hard work and rewarding your employees is important for both them and your business because:

  • It motivates people, which will boost teamwork and productivity
  • It improves your workplace culture, creating a supportive work environment
  • It helps retain top talent and reduce staff turnover 
  • It instills a sense of purpose and makes your business more value-oriented

Even if we get awkward when given a compliment, or say no worries when taking up that extra task, we all have the simple human need to feel valued and appreciated. This goes for recognition from friends and family, but also that other group of people we spend a lot of time with: our colleagues. A pat on the back from our peers and managers feels good. 

One of the main ways we can search for fulfillment from rewards is through work. It’ll make people happier, which will reflect on customer happiness, employee productivity, and much more. 

If it’s done right, that is. Now, you don’t need to buy a cake every time someone comes on time or hits a deadline. The recognition and rewards should be given generously, but also be genuine — don’t just give out rewards so you can post about it on LinkedIn. That might even backfire in the long run.

Recognition and reward should be used to show appreciation when employees and teams accomplish something great, or show excellent examples of working according to your companies’ values or vision. 

smiling woman at meeting with colleagues

7 benefits of employee recognition in the workplace

Let’s get practical, what changes will you notice in your business once you have a culture of recognition alongside a good rewards system? Here‘s what companies often see happening once they start giving their employees the praise and perks they deserve.

1. It boosts workplace culture

Looking for a way to get morale up, and more importantly, keep it up? Sporadic perks and team-building events won’t cut it, but an employee recognition programme will. 

When your employees are lacking motivation and spirits are down, it’s very likely they don't feel they get the recognition they deserve. Even if they don't actively complain about this, it could be a major culprit. We subconsciously like being rewarded, and asking for it simply isn't the same. 

Start rewarding your employees for actions that are in line with your company values and that are great examples of how you want the workplace culture to be. That means you shouldn't just reward employees for how they handle things with customers, but also for how they treat each other. 

This improved workplace culture won't go unnoticed outside your office walls. The positive vibes and increased happiness of your workforce will positively impact the relationships they have with your customers. Everyone’s happy!

2. Increases productivity

Knowing you’ll be rewarded if you and your team go the extra mile could push some employees to stop procrastinating and help them focus. It's crucial however that reward isn't a guess, but rather a given in this scenario. Be clear about what people can expect when they work harder — how do you define employee recognition?

It’s quite simple, if you recognise a job well done and reward someone for it, they’re more likely to do that again.

Choose to give employees rewards for productivity that really matters and contributes to your long-term goals. This will be an extra motivator, because it helps them see how their work fits into the bigger picture and makes them feel like an important part of the puzzle.  

​​woman working on laptop

3. Boosts employee morale 

We spend so much time at work, and coming in every day can soon start to feel like a habit. If you’re not rewarded properly, you feel like you’re being taken for granted. This isn’t good for morale. One great example of employee recognition is simply taking the time to reward employees on an individual level.

Recognising your employees' time and dedication is a basic form of taking care of them. Often when people work extremely hard and feel it’s for nothing, they’ll end up leaving or drop their can-do attitude after a while. You can prevent these negative feelings by proactively rewarding your employees with things that matter to them. 

4. Engages employees 

The UK economy loses an estimated £340 billion due to disengaged employees. That might seem like an abstract number for your business, so we broke it down for you with our own research: a disengaged employee costs the recruitment industry £3,103 more compared to an engaged employee. 

They don't just lack in productivity, creativity and innovation — they also take more sick days and need to be replaced often. Hello high HR costs (​​it costs at least 20% of an average salary to recruit a new employee), and goodbye talented employees. 

The good news? It doesn't have to be this way. And it doesn't take insane perks and company trips to the Bahamas. 

Employee engagement is something a lot of companies struggle with. How can you keep your people enthusiastic about their jobs, even after the newness wears off, and they've shown what they're capable of?

By not taking those capabilities for granted. Employees who are disengaged often don't see the value of their work, and that's often due to their work simply not being valued. Sure, they get paid, but everyone does. In addition to that, we all want to feel a bit special. 

If your employees are disengaged, this can quickly seep into your workplace culture, creating a negative vibe. People can do the bare minimum or less because they feel it doesn't really matter, and customers are faced with lethargic employees who are clearly ready to go home.

Turn that frown upside down by making recognition part of your employee engagement strategy. Truly engaged employees will lift your business to the next level, by presenting the best version of themselves. They’ll also develop their own skills out of curiosity and loyalty to your company’s mission. 

Woman putting hand up in meeting at work

5. Retains talent 

Are you struggling with retaining your best employees? You’re not alone, and it might have something to do with the previous point. If someone is disengaged at their current job, they’re four times more likely to leave. 

Sit down with your team and find out what the issue is. Often, it's the lack of appreciation and recognition. 

You can spend all the time, money, and energy on the recruitment process and presenting your company as a great place to work, but once people get used to the place they’ll still need to feel valued and wanted. Your employee retention efforts actually start during your hiring process, and it's something you should keep working on every day.

Encouraging different types of employee recognition as a baseline in your business is something that could help you turn your staff problems around. Your promises during recruitment will be more in line with reality, and you’ll start saving the money being spent on constantly finding new people. It's much cheaper to regularly reward an employee than to replace them. 

Plus, if you keep people on board longer, they’ll build more relevant experience and skills that will aid you in growing your business. That new employee could one day be an industry expert. 

 6. Positively impacts teamwork 

Recognition and rewards shouldn’t only be aimed at individuals, but at teams as well. What's more, if you do it right, you'll make sure that employees are able to recognise each other’s hard work in a meaningful way, and not just leave it up to their managers. 

A key part of the Perkbox platform is that it encourages employees, or peers to give each other recognition, which is often considered even more powerful and meaningful than managerial praise. 

This will have a huge impact on the way people work together, they can push others to show up as the best version of themselves, and it’ll give teams a practical tool to grow stronger. 

7. Instills a sense of purpose

Last but definitely not least — employee recognition will help employees understand how their work ties into the bigger picture. If you reward them for actions related especially to the values and purpose of your business, rather than just for sales and speed. You will help people see why what they do is important and meaningful. 

To learn more about how to give your employees a sense of purpose, check out this list of the top 4 employee recognition tools.

smiling woman reading document

The three Rs: Recognise, Reward and Retain 

When working on employee recognition, you should always remember the three Rs. Recognise, Reward and Retain. 

You can put the three of them in a Maslow-like pyramid, starting with Recognition as the basic need at the bottom. You follow it up with Reward, and eventually, you get to Retain.

Rewards should only be given if there’s already a general culture of recognising hard work within your company. If this is not the case, and you only give out rewards for, let’s say, exceptional sales results — they definitely won’t have the desired effect. 

People who can't contribute to sales, for instance, HR managers or people in admin, will feel left out, they could never win that voucher or bottle of champagne simply because of their job description. Ouch. 

So, start building an environment where recognition is given all over, and rewards can be earned by everyone. Of course, you can alter the rewards based on the roles and needs within your business — but make sure they make sense to everyone. 

When you start doing this, you’ll notice that you start retaining your best employees more easily and maybe even attract some new talent along the way. 

Don’t underestimate the importance of your employee recognition program

Are you thinking this all sounds great, but don’t know what’s next? Don’t worry. You don't suddenly have to make a wall of fame for the Employee of the Month, and you don't need to walk around giving random pats on the back every hour. 

You can make recognition and rewards easier for everyone involved by working with Perkbox. Using Perkbox employees recognise each other, no matter where they are. Be it across the desk or on the other side of the world.

Not to mention it has over 8,500 rewards, so there is something for everyone. Plus you can even create custom rewards, unique to your organisation, such as duvet days or free-drink Fridays.

Additional features include setting challenges and polls. The platform serves as that spotlighted place where people can go for some positivity and appreciation during their workday.

If you’re excited about getting started with employee recognition, the next part of our guide will give you some practical tips to make the implementation a huge success. 

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