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In today’s working environment, Organisations are continually seeking means to reward and retain their Employees while maintaining or increasing high levels of productivity. Financial rewards are important as a means to aid recruitment and retention and as a means of providing tangible recognition of effort or contribution. Yet, the consequence of such an assumption has been to overemphasise the importance of financial reward.

There are a whole host of alternative motivators that can act to influence Employee behaviour and enhance Employee motivation. One method of achieving this objective, as part of an overall approach to Employee reward is to recognise Employees for desired behaviour and performance.

Effective Employee recognition is a central part of the employment relationship. Organisations which understand the importance of recognising, validating and valuing excellent work keep Employees motivated and represents an effective method of reinforcing organisational expectations and goals. This is especially so in times when merit increase budgets are low or even suspended, promotions are less likely and overall levels of engagement can be low.

A simple ‘thank you’ can go a long way when paired with properly designed rewards and recognition programmes. Research studies for example have shown a high correlation between recognition and increasing Employee levels of motivation. If that were not enough, a significant percentage of Employees indicate they would leave their current Employer for another Organisation that clearly recognises individual or collective effort or contributions. 

The Psychology of Recognition

At its most fundamental level, Employee recognition involves acknowledgement of an Employee contribution to the Organisation on a task well done. It can be as simple as a personal acknowledgement by a manager to their Employee(s) or team that they have performed well.

Maslow’s ‘hierarchy of needs’ suggests that people’s needs change as they ascend a hierarchy which has basic needs for food and security for example at the lowest level, ranging to self-actualisation at the highest. Some of the most valued individual psychological needs relate to the satisfaction of personal desires such as the need to be respected; being given increased autonomy and being appreciated. While money has only limited power, it does have the ability to demotivate Employees if they are dissatisfied with the amount they receive or the way in which this amount is determined.

Whereas financial reward and other benefits can help in meeting basic needs, recognition can support the meeting of higher level psychological needs such as self-esteem and respect. The belief is that if all of these needs are fulfilled, Employees will be motivated to work at high performance levels.


Fig 1: Maslow’s Hierarchy of Needs 

Source: Forbes

Forms of Recognition

The size, scope and formality of recognition schemes can vary. Effective recognition programmes can be both formal and informal in nature, ranging from informal programs which incorporate a simple ‘thank you’ to more formal programs; such as ‘above and beyond spot awards.’

Organisations which people love to work for recognise their Employees and not only tell them that they are doing a great job, but show their appreciation through tangible incentives, recognition and rewards. Insight as to what forms of recognition are valued by Employees can be gathered from Employee engagement surveys or focus groups.

Formal recognition program may require a small amount of planning and administration. Such schemes typically include a nomination and selection process in order to identify and acknowledge achievement and performance. While such recognition is non-monetary in nature, they may have a monetary value associated with it. 

Informal acknowledgement operates on a more day-to-day, discretionary and individual basis. Managers play an important role in noticing and acknowledging desired performance and behaviours.  In its most basic form, informal recognition can be a simple “thank you” to an Employee for a job well done. 


An Effective Recognition Approach

Employees not only want good pay and benefits, they also want to be valued and appreciated for their work. Recognition can be delivered in a number of ways but in order to be truly effective it should meet several essential criteria as outlined below:  

  • Timely – recognition should be made as close to the time as the desired behaviour as possible; 

  • Sincere and simple  - call the person by name and let him/her know that you personally value their effort;

  • Linked to achievement of specific results or demonstration of desired behaviours; 

  • Re-enforces the actions and behaviors the Organisation want to see their Employees repeat; 

  • Rewards must be valued and tailored to individual preferences; 

  • Fairness in distribution of awards - Employees must believe the system of recognition is just and objective; 

  • Enhances Employee confidence and self-esteem;  

  • Empowers and inspires all Employees to recognise peers, managers and subordinates whenever appreciation is deserved; 

  • Continuous evaluation / improvement – programs must be continuously monitored in order to keep them relevant and current.