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Matt Tenney, Contributor

Research has shown that happy workers use their time more effectively and are more productive, often working faster without sacrificing quality.

There are many ways leaders can make their teams happy and boost their performance, such as fostering a caring culture.

In this article, we will discuss the importance of recognition.

Recognition is so important because it meets a core human need for both the employee and the manager. Meeting this need is a key aspect of a strong company culture because it increases job satisfaction, employee engagement and retention, and quality of work.

Successfully cultivating both appreciation and recognition is a great leadership move and yields a variety of positive results.

As Mike Robbins explains in a thought-provoking talk at TEDxBellevue, recognition, not just on its own, but as a part of a caring culture that values and appreciates people beyond achievements, is an important factor in employee satisfaction.

Here are seven reasons recognition is so important. 

Recognition Boosts Employee Engagement

There is strong evidence that suggests recognition is a great way to engage employees because it boosts self-esteem and personal competency. 

Employee engagement continues to be a hot-button issue in the business world, with leaders scrambling to figure out ways to boost engagement and improve performance. 

There have been many studies conducted over the last few decades that confirm what we already suspect—that employee engagement is not only a problem but a tricky one to solve.

For example, Gallup’s State of the Global Workplace: 2021 Report showed that, following a steady rise over the last decade, employee engagement has decreased globally from 22% in 2019 to 20% in 2020.

A decrease of two percentage points might not seem like a big deal, but, considering how low those engagement numbers already were, it is significant.

As leaders, when we see statistics like these, it should concern us enough that we start considering where we are failing our employees and how to move those numbers in a positive direction to improve engagement.

It should inspire us to seek ways to start building a happier workforce where engagement is the norm and employees are recognized for their contributions.

Motivation is a huge factor in employee engagement. When it comes to motivators, recognition is one of the best ways to improve employee engagement in your organization.

When employees are recognized for their contributions to the organization, they feel a sense of ownership and will likely continue to perform at a high level. It will also build trust between leaders and their teams. 

Recognition Lowers Turnover

There is an undeniable link between employee recognition and employee retention. Unfortunately, employees feel their highest achievements and best efforts are often ignored. 

Companies that recognize employee achievements see less turnover than companies that do not make employee recognition a part of their organizational culture.

According to Gallup, employees who do not feel adequately recognized are twice as likely to say they’ll resign within the next year.

Gallup also points out that recognition provides a sense of accomplishment and makes employees feel valued.

In addition to boosting individual employee engagement, it also increases productivity and loyalty to the company, which improves retention.

Recognition Attracts Better Employees

Engaging and retaining highly-skilled employees is important, but you also want to continue to attract the best talent as your company grows.

Having a consistent program for employee recognition that can be utilized in the recruitment process is a great way for companies to attract top talent.

Because talented candidates are looking for more than high salaries and competitive benefits, a successful employee recognition program is a useful recruiting tool

Highly-skilled job hunters are seeking jobs with organizations that will not only make use of their talents, but where employers will demonstrate appreciation for their achievements and help them grow professionally and personally. 

When employees are appreciated and feel that they are having a measurable impact in an organization, they feel good about what they are doing at their jobs. As a result, they feel happier in their personal life.

This can lead to a reduction in sick days (or “mental health days”) and tardiness. 

This is a benefit that leaders should not underestimate, particularly leaders of small businesses, because absenteeism can have a devastating impact on productivity and profits. 

Absenteeism can be bad for employees too. The absent employee might lose pay or struggle to play catch-up, while other employees have to pick up the slack for the absent employee. 

According to Quantum Workplace, “When employees are recognized for a job well done, they don’t have to worry about whether they’re putting in good work.” 

Recognition lets employees know their efforts are vital to the health of the organization, which can not only boost engagement, but also provide them with the sense that their absence from work has a real impact on short- and long-term success.

Recognition Helps Employees Find Meaning

If you are already practicing a culture of care in your organization, you know that, within that structure, you are helping your team find and create meaning.

Recognition plays a major role in helping employees find meaning. It allows them to connect the dots between their day-to-day activities and the bigger mission of the company and how they are a part of achieving a vision.

This can be particularly important as an organization evolves or when it experiences growth or change.

According to Great Place to Work, recognizing employees on a regular basis will motivate them to perform at their best.

This can help them develop a sense of security in the value they bring to the organization and make their work more meaningful. 

Recognizing Employees Helps Managers Find Meaning

While they might have started (or accelerated) the recognition-seeking trend, it’s not just Millennials who crave recognition

A large segment of the entire workforce, across generations, is now looking for organizational cultures that provide them with acknowledgement. 

Forward-thinking leaders will view their employees’ need for recognition as another opportunity to demonstrate a culture of care for their employees.

But, beyond that, being able to provide something so vital to the success and happiness of your employees can help you find your own meaning as a leader. 

By showing your employees that the job they do is important through recognition, you are also acknowledging how important your role is in helping them find meaning in their jobs.

This, in turn, makes your work more meaningful by allowing you to see the positive impacts you’re making in the lives of team members.

Recognition Reinforces the Positive

Recognition reinforces what we want to see more of, thereby allowing us to see more good work and better performance.

Many organizations have yearly formal reviews that provide employees with insight they need to determine how to grow in their position or develop the skills needed to move up. 

These can be extremely useful in the professional development of employees.

However, it’s the daily “micro messages and nudges” that leaders provide to employees that have the most profound impact on employee performance and reinforce more positive behaviors.

When you recognize employees for doing a good job, it shows them you are paying attention and invested in them as people. This will make them want to work harder for the good of the organization, not just for their own personal gain or for incentives.

Recognition, whether it’s in the form of an award, a bonus, a promotion, a raise, or a simple “thank you” will show your employees that you care, especially if it’s done authentically and consistently. 


Matt Tenney is an active CEO who aspires to create the best workplace culture in the world.  Matt is also the author of Serve To Be Great: Leadership Lessons from a Prison, a Monastery, and a Boardroom, and The Mindfulness Edge: How to Rewire Your Brain for Leadership and Personal Excellence.  Matt is frequently invited to present keynote speeches at leadership conferences and meetings.  His TEDx Talk has been viewed over 1,000,000 times since January, 2020.

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