According to the Canadian HR Council1, employee recognition is the “the acknowledgement of an individual or team’s behavior, effort and accomplishments that support the organization’s goals and values.”

Employee recognition usually takes a couple of forms, either informal or formal. Informal recognition is very spontaneous and helps encouraging certain behaviors that you want to reinforce in the workplace. On the other hand, formal recognition takes place when employees or departments are rewarded for exceeding strategic goals and objectives.

Both of these can be instrumental in establishing a positive and supportive climate within your company. Let’s look at three reasons why every manager should adopt an employee recognition program.

Increase employee productivity companywide

By recognizing their good work, employees will be motivated to go above and beyond their call of duty. It drives them to outperform themselves, and always become better at what they do.

Employees who are constantly reminded that they are doing an extraordinary job also feel like they are participating in the overall success of your company. Therefore, they become intrinsically motivated about their job, which is proven to have a positive impact on their productivity.

A side benefit of employee recognition is that it dramatically increases employee competitiveness. When their colleagues are rewarded for their achievements, employees are likely to try harder and achieve even more.

Helps retain and attract talented employees

Employee recognition programs can have a positive impact on turnover rates. Indeed, this human resources management tool is one of the best ways to retain existing employees.

Stress in the workplace is extremely counterproductive, and encouraging your employees can help relieve it. In the short term, absenteeism will be reduced. In the long run, employment longevity will be maximized, therefore reducing expensive turnover costs.

Also, employee recognition will attract talented employees to work for your company. Many job seekers are attracted to companies that are ranked as some of the best places to work for. For example, Glassdoor2 makes it incredibly easy for existing and former employees to review your firm—and they can potentially make or break your reputation as an employer.

Increase revenues and maximize profitability

It goes without saying that employee recognition will have a positive impact on your bottom line. Despite the time and effort put into an effective employee recognition program, the investment is unquestionably worth it.

Employees who are intrinsically motivated by their job will achieve more in a shorter amount of time. Teamwork will be enhanced within and across departments. By establishing the right culture, employees will be inclined to share their innovative ideas to improve a particular process or create a brand new product. The possibilities are endless, and the upside potential for your bottom line is unlimited.

To understand the importance of employee recognition, one must understand the psychology behind it. Whichever their level in the organizational chart, people like to be valued for their contribution. One of the components of an amazing workplace is the gratitude towards every single employee. Unfortunately, appreciation is often undervalued in organizations of all sizes. However, as one of the most powerful management technique, employee recognition should be a no-brainer.


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