Employee recognition is the practice of acknowledging the work people do, whether that’s a colleague saying thank you, a manager marking a strong quarter or a company-wide award. It can be informal or structured, and it can carry a reward or stand on its own. Done consistently, it’s the single biggest driver of whether people feel valued at work: 53% of employees rank it first (Perkonomics Report 2025, Perkbox).

Because feeling undervalued is what makes people leave. 42% of UK employees feel undervalued in their current role, and 54% of them plan to quit in 2026. Recognition is one of the few levers that costs little, moves quickly and reaches everyone. 80% of employees say they’re more motivated when their achievements are recognised.

The main types are peer-to-peer, manager-led, company nominations and awards, values-based, milestone and life-moment recognition, and points-based reward. The programmes that work mix several: peer-to-peer builds the everyday habit, awards handle the standout moments, and reward gives the thank you something tangible behind it.

Employee recognition software is a platform where recognition is sent, seen and tracked, rather than scattered across email, chat and a spreadsheet. Good recognition software works on mobile and desktop, lets anyone recognise anyone, ties recognition to your values, handles milestones automatically, and shows admins who’s being recognised and who’s being missed.

Most established employee recognition platforms include peer-to-peer recognition, Perkbox included. What varies is whether everyone can actually use it: whether frontline and deskless staff can get in without a work email, whether it works properly on a phone, and whether recognition and reward sit in one app or two. With Perkbox, peer-to-peer recognition, nominations, milestones and rewards are all in a single app.

Recognition is the acknowledgement: the message, the nomination, the shoutout. Reward is what you attach to it: points, a gift card or an experience. Recognition works on its own, but the two together work harder: 78% of employees say they’re more motivated when recognition comes with a financial reward.

Recognition itself isn’t a taxable benefit. A message, a shoutout or a nomination creates no tax liability. Rewards are different. In the UK, gift cards and other non-cash awards given to employees are generally treated as a taxable benefit under HMRC rules, and are usually handled through a PAYE Settlement Agreement or reported on a P11D. Some employers cover the tax themselves so the reward lands with the employee at full value.

Perkbox gives your finance team clear reporting on points issued and redeemed, so the numbers are there when you need them. This isn’t tax advice, so check with your finance team or HMRC for your own setup.

Rewards provided as gift cards to employees through this scheme are subject to HMRC employee incentive award rules on Income Tax and NIC, and subject to change. Rewards cannot be exchanged or resold.

Look at participation before sentiment: what share of your people sent recognition in the last month, how evenly it’s spread across teams and locations, and whether the same few names keep appearing. Then read that against engagement scores, retention and exit reasons. Perkbox reporting shows recognition volume and reach by team, so the gaps are easy to spot.

Recognition software is usually priced per employee per month, with your reward budget sitting on top as a separate spend you control. Perkbox pricing covers what’s included at each level.