What is Recognition and Why Do Companies Need It?

When you think of ‘recognition,’ you’re likely to think of words of encouragement or phrases such as, ‘job well done!’ 

That’s because recognition is, at its core, an expression of appreciation that one person shows another. In most cases, we give recognition verbally and frequently throughout each day - whether it’s at work, at the grocery store, between friends and family, or even to a stranger. 

However, when it comes to the workplace and organizational culture, what is recognition?

Moreover, why do companies need it?

Recognition is inherent and intuitive 

People crave recognition. 

We want praise in most any form, especially from those we look up to, which is why many organizations prioritize recognition as part of a broader engagement strategy.  

That doesn’t mean, however, that all recognition is equal. 

Some companies focus on rewards, others focus on both rewards and recognition, but most are actively employing recognition programs to some degree. Approximately 80% of organizations now use some form of a recognition program.


"Recognition is psychological. It taps into the intrinsic motivations people have to succeed, perform well, and feel valued and trusted."


In a recent article, we discussed the key differences between rewards and recognition and found that recognition is psychological. It taps into the intrinsic motivations people have to succeed, perform well, and feel valued and trusted.

Recognition is, therefore, intuitive and inherent to human interactions. It’s a part of our daily lives and provides the reinforcement we need to feel confident in what we do, both in and outside of work.

Recognition is a driver of growth (and retention)

We may not immediately think of recognition as a key driver of company growth and retention. However, more organizations and leaders agree that it’s an essential component to keeping top talent from jumping ship

Studies from Deloitte, for example, report that recognition and leadership support is among the top three contributors to retention. Other research (such as that from SHRM) found that 68% of HR professionals agree that recognition has a positive impact on retention, while 58% agree it also helps with recruitment.

Those stats become even more relevant when you consider engagement. According to studies from Gartner, high-performing employees show higher risks of turnover; part of the issue with this turnover is disengagement, which can significantly impact whether employees remain with your organization. Given that recognition can assist with engagement, in turn increasing margins, leadership has to place recognition at the forefront of their culture strategy.

Speaking of workplace culture... 

The positive ‘side effects’ of recognition mentioned above can also improve organizational culture, which more companies now view as a must-have

You may be surprised to find, for instance, that 95% of employees feel recognition in the workplace plays a significant role in maintaining a positive workplace culture!

Meanwhile, research from Glassdoor has found that 81% of employees are motivated to work harder when their leaders show recognition for their hard work. 

Retention is typically top-of-mind for organizations, primarily when recruiting the best talent is of considerable import to leaders. When just 15% of employees are engaged at work, globally, recognition can be used as a simple yet effective way of skyrocketing growth while improving retention rates in your organization!

There’s just one problem!

Without the support of leadership, recognition initiatives are often fruitless. 

That’s where leadership buy-in comes into play!

In a recent study conducted by WorldatWork, it was discovered that only 52% of senior executives and managers view recognition as an investment. Organizations can no longer ignore the importance and necessity of recognition in the workplace. It also indicates that leadership support of recognition programs or initiatives is essential if organizations have any hope of benefitting from those positive side effects which result from recognition!

Consider this: 85% of employees prefer a simple ‘thank you’ for day-to-day accomplishments in regards to recognition.

If recognition is truly as easy as a ‘thank you,’ why aren’t more organizations employing this intuitive tool? Further, why aren’t more leaders on board?

The solutions could be simple

Leaders may be hesitant to practice recognition, even on a small scale, if it seems complicated to implement or lacks replicability. 

A straightforward way of making recognition more approachable for everyone is to think of it as a tool you can use to celebrate wins, both big and small. 

Gary Vee of VaynerMedia, for example, openly recognizes his own struggles with recognition but acknowledges that it’s important to stop and smell the roses and acknowledge when his teams accomplish something, no matter how small or significant. By also recognizing that he could continuously improve his recognition habits, he’s already playing the role of a more honest, transparent leader. 


"Recognition is intuitive and inherent to human interactions. It’s a part of our daily lives and provides the reinforcement we need to feel confident in what we do, both in and outside of work."


Another method involves recognizing and applauding honesty in your teams. When employees provide feedback or deliver constructive criticisms about how their organization operates, leaders are presented with a unique (and rare!) opportunity to improve its culture. Being appreciative of that honesty and truth is a simple way of fostering a better workplace culture, with minimal effort. 

Leaders may also consider making recognition timely and specific. For example, saying ‘thank you’ to a team member for a particular task encourages that colleague to continue delivering excellent work and positive results in a specific area of focus. Similarly, giving timely recognition makes it memorable and more specific to the outcome for which you are grateful!

Try recognition today (what’s stopping you?)

Ultimately, we all want to be recognized for our efforts. At work, receiving recognition could be the difference between a culture of productive and engaged employees, and a workforce of unhappy and disengaged teams. 

By tying recognition into your culture and engagement strategies, you’re taking the steps necessary to ensure your people feel valued by both their leaders and their entire organization! 

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