The Proven Impact of Employee Recognition on Engagement, Retention & Alignment

Team members form the foundation upon which organizational achievements are built. Employees (not technology) remain the driving force behind whether any organization succeeds or fails. 

This fact makes it imperative to implement programs and approaches that help engage employees and support them in their jobs. And one of the very best ways to do that is through employee recognition programs or software.

This article walks through three ways strategic employee recognition programs in the workplace have been proven to positively impact employee engagement, talent retention, and organizational alignment and culture. So if you don’t yet have employee recognition in place at your workplace, the data below might convince you to give recognition a second look.

1. Use Recognition to boost employee engagement (and business results)

Trying to improve employee engagement at your organization? Well, it turns out that one of the most powerful, yet often overlooked, tools at a company’s disposal when it comes to improving employee engagement and retention is employee recognition. A recent HR research study found that 40% of surveyed professionals believe employee recognition drives engagement. And high employee engagement is a powerful driver of business success.

A recent WorkTango and HR.com research report on the future of employee engagement included responses from 275 HR professionals. According to those HR leaders, 96% believe solid evidence exists linking employee engagement to strong performance. Survey responses also found that a highly engaged workforce results in:

• Increased productivity 
• Higher-quality outputs
• Higher talent retention
• Higher job satisfaction 

A Harvard Business Review study finds that recognizing employees at work can significantly improve individual and organizational performance.

When it comes down to it, everyone wants to be appreciated for their work at work. These studies show that recognition drives employee engagement, and employee engagement is directly linked to improved professional performance and business success. So if you don’t already have an employee recognition program in place, it might be time to invest in peer-to-peer, bottom-up, and top-down employee Recognition.

2. Infuse Recognition into your work culture to increase talent retention

Despite economic uncertainty and technology sector layoffs, employees are still quiet quitting, according to a recent Gallup study. But in addition to impacting employee engagement, employee recognition programs also help when it comes to talent retention. 

In a survey conducted by SHRM, 68% of HR professionals agreed that employee recognition positively impacts retention, while 56% said such programs also help with recruitment. The data shows that receiving recognition at work leads to increased job satisfaction and reduced turnover rates. Employees want to work for companies who not only appreciate their hard work, but also actually acknowledge it. 

Therefore, to improve talent retention, organizations should focus on creating a work culture that includes a formal employee recognition program. Employees want to be valued for their contributions at work, and a peer or leader regularly (and publicly) demonstrating appreciation helps fulfill that intrinsic motivator for the employee and create a wider culture of continuous recognition. 

Recognition strengthens the idea that each employee’s contributions matter and are important towards the company mission. When their efforts are acknowledged, employees are inspired to take pride in their work and push further. This sense of purpose can elevate an employee’s commitment, resulting in improved performance. According to Deloitte, employee engagement, productivity, and performance are 14% higher in organizations with recognition programs than those without. 

3. Use Recognition to reinforce organizational values and goals

Organizations who wish to reinforce desired behaviors such as better teamwork, improved product quality, or increased customer satisfaction scores can also make use of employee Recognition to do so. Leaders can direct positive attention to employees who display these behaviors through formal Recognition programs. When employees are celebrated for desired behaviors, they are more likely to continue doing them. And behaviors that get recognized by executive leadership will typically get repeated by others across the organization.

Another way to leverage employee recognition to drive desired behaviors is to intertwine your recognition program with your company values. When employees are recognized for behaviors that reflect core principles and values, it reinforces the company’s overall mission. If the values are strong and the company is committed to them, employees should be actively demonstrating those values throughout their work days, weeks and months. An effective approach to amplifying company values in a visible way is by linking each employee recognition to one of your values when giving the recognition. Doing so will encourage employees to familiarize themselves with each of the values, and try to emulate similar behaviors to those that gained public recognition already.

Okay, Recognition’s great, but what about Rewards?

As the data above shows, implementing a strategic, data-driven recognition program can significantly transform individual performance, workplace culture, and drive tangible ROI. 

In the last decade, numerous employee recognition & rewards (R&R) providers have emerged as possible partners for organizations looking to cultivate a deliberate culture of appreciation. Many companies (including WorkTango!) offer not only Recognition, but built-in Employee Rewards as well (think monetary gifts, experiences, swag, and more!).

Buyers often find themselves wondering about the “rewards” aspect of these programs as a means of employee motivation, driven by the belief that material incentives are the key to fostering employee satisfaction and commitment. And while it’s true that Employee Recognition & Rewards both play a powerful role in boosting engagement and the overall employee experience, many organizations may be unable to offer employee rewards due to financial or industry constraints (such as those in government or non-profit sectors).

The good news is that as the article above demonstrates, the impact of recognition alone – even without rewards attached – is significant. Employee recognition programs almost always have a positive impact on organizational and employee success, retention, engagement, job satisfaction and more. And this is why it is imperative that, whether or not it’s possible to offer material or monetary rewards, organizations must prioritize recognition strategies that acknowledge employees’ contributions and efforts regularly. 

If you’re at an organization that isn’t able to offer monetary or tangible rewards alongside employee Recognitions, it is still possible to reward or incentivize employees through other means! Try offering top performers:

• Professional development opportunities, such as workshops, training sessions, or conferences that empower employees with new skills and knowledge. 
• Flexible work arrangements, like remote work options, adjusted hours, or an extra day of PTO. 
• “Stretch” projects to employees that align with their passions and strengths. 
• An hour of one-on-one mentoring time with the organization’s CEO

Integrating rewards into a recognition program can certainly amplify its effectiveness; indeed, data shows that when recognition is combined with rewards, the net effect is 1.3x as powerful as either one alone. However, whether an organization can offer rewards or not, it’s important to recognize that employee recognition is already extremely powerful, and worth investing in on its own.