What is the science behind employee recognition?

It is common knowledge that happy and rewarded employees do a better job, and so recognising employees for their wins and achievements is now considered a key pillar of leadership.

However, research in 2020 found that over half of employees don’t feel they get enough recognition at work, although 94 per cent believe it is key to retaining talent and 78 per cent said they would work harder with more recognition.

But why does employee recognition work as a motivation tactic, and how can leaders utilise employee recognition to the best effect? This article will explore the psychology behind employee recognition to help leaders develop successful reward strategies within the workplace.

What is employee recognition?

Employee recognition identifies and highlights the positive influence that staff have brought to their organisation, either through personal development, an excellent piece of work, or through their support of a colleague or team to achieve their goals.

This recognition can, and should, come in many forms. The most obvious is a pay rise or promotion, however, these generally occur annually, if not longer, and alone are not enough to demonstrate to employees that their daily efforts are valued by their managers and colleagues.

Other forms of employee recognition include private or public thanks and congratulations for their success, bonuses or ‘gifts’ from managers, such as a team meal, or highlighting milestones an employee has reached, like a year of service to the organisation.

However, it is important that leaders select the right kind of employee recognition for their employees and their situation and ensure that recognition is a key part of the culture of the organisation, or staff will struggle to believe that the recognition is genuine. Therefore, leaders need to first understand why employee recognition works so they can implement it to the best effect.

The psychology of employee recognition

Understanding why employee recognition is important in creating a healthy workplace will help leaders implement the right kind of recognition for the wellbeing of their workforce.

The need for recognition can be traced back to Maslow’s hierarchy of needs. This simple triangle show’s us how humans prioritise what they need to survive and thrive throughout their lives.

At the base of the triangle is physiological needs, such as food, water and sleep, but as we rise higher up the triangle we see the need for love and belonging, such as being part of a community, self-esteem, the need for confidence, achievement and respect, and finally self-actualisation, or feeling fulfilled and having meaningful experiences.

Each of these upper needs can be met with employee recognition. Building a supportive workplace helps meet the need for community, as well as showing employees their time and effort is respected. And having a purpose in their work, feeling that, as a team, they are contributing to something greater, helps meet the need for self-actualisation.

Using Maslow’s hierarchy of needs to gain clarity on why employee recognition works will help leaders implement the right strategies for recognition within the workplace.

Employee recognition strategies for leaders

It is clear from Maslow’s hierarchy that fulfilling employees’ psychological needs goes further than simply the odd hat-tip every now and then. Recognition and gratitude must be an essential part of workplace culture and be refined constantly to ensure it still works to the best effect.

There are several strategies that leaders can use to embed employee recognition into workplace culture. However, the key to all of them is consistency and fairness. For example, research shows that consistent gratitude can strengthen social bonds, reduce stress and increase the production of dopamine and serotonin, both hormones that make people feel good.

Gratitude is thought to be a social concept, linking what we have done for others to what they have done for us. When this perception gets tarnished, such as by not seeing our work recognised in the same way as someone else’s, it can have the opposite effect. All employees must be treated equally for the contribution they make, or the recognition will seem ingenuine.

It should also come from more places than leadership, with all employees playing a vital role in implementing recognition strategies in the workplace. Research into employee recognition has found that the effect of peer recognition on employee wellbeing was two times greater than leader recognition. From this, leaders know they need to implement systems that support a positive culture where employees lift each other up.

These are a few examples of how leaders can implement employee recognition. However, recognition should be bespoke to each workplace and the employees’ needs. Leaders may need to test several strategies before they land on the correct type (or types) of recognition, and the best way to ensure employees receive the recognition they need is to ask what they want. This is the first step to making employees feel that they and their contribution are valued in the workplace.