Updated: October 09, 2022

Employee Recognition: Importance

You found our guide to employee recognition.

Employee recognition is the process of acknowledging staff members for good performance and extra input into a job. The recognition process may be structured or unstructured, delivered verbally or in writing. For example, sending thank you emails and awarding recognition certificates. Employee recognition exists to appreciate, motivate, and reward committed staff.

This concept falls under the umbrella of employee engagement best practices, and provides guidelines for employee recognition programs and virtual staff recognition ideas.

This article covers

  • types of employee recognition
  • benefits of employee recognition
  • examples of employee recognition
  • employee recognition’s role in leadership

Let’s dive in.

Types of employee recognition

Recognition is classifiable in terms of the process, delivery, or mode of communication.

1. Recognition by process

Employee recognition takes two main forms, structured and unstructured.

Structured employee recognition is a formal and well-outlined method of acknowledging employees. This form of recognition is periodic and involves policies and procedures. Structured recognition usually goes hand in hand with the employee reward system and may require a budget.

Examples of structured recognition include:

  • Company recognition- refers to employee recognition through an approved company recognition policy
  • Management recognition- refers to employee recognition through the management’s observation and appraisal
  • Stakeholders recognition- refers to the recognition of management staff based on a judgment by the stakeholders like company owners, shareholders, and investors

Unstructured employee recognition is more casual and usually organized and executed by colleagues. The informal nature of unstructured employee recognition makes it easier to conduct and more frequent.

Examples of unstructured employee recognition include:

  • Peer to peer recognition- refers to colleagues acknowledging one another
  • Bottom-up recognition- refers to junior staff appreciating a leader, for example, a manager, head of department, or mentor
  • Client recognition–refers to when a client or customer acknowledges good service or product delivery from an employee

These forms of recognition have no specific rules and allow more freedom and creativity on how to acknowledge employees.

2. Recognition by delivery

Acknowledging staff may happen publicly or in private.

Public recognition puts the information in the open, for example, in the company’s newsletters, which clients, subscribers, and owners can access. This form of employee recognition is suitable for promoting desirable employees’ traits and publicizing the organization’s best practices.

Private recognition is typically confidential, and only a few folks may be aware of it. For instance, an employee receives the acknowledgment as an email or card. Colleagues and daily clients commonly use this form. Additionally, a confidential recognition is a perfect way to motivate staff members who prefer to avoid public attention.

3. Recognition by mode of communication

Employee recognition may be verbal or written communication.

Verbal communication is more frequent and popular with unstructured recognition. Though rarely anticipated, verbal recognition is a compelling motivation strategy that managers and supervisors can adopt to inspire teams regularly.

Written recognition is less common and often associated with structured recognition. In most cases, organizations reserve written recognition for major accomplishments. Employees consider this acknowledgment as heftier, more formal, and more credible than the verbal mode and usually have a greater desire for the written form.

Benefits of employee recognition

Employee recognition has ripple effects on the employees, management, and the company. Here are some benefits of acknowledging your staff.

1. Improved project ownership

Recognition influences employees’ desire to take the initiative and champion company projects. As a result, the staff concerns themselves with activities that promote the success of an organization’s undertakings.

2. Increased employee engagement

Recognizing employees is one of the best drivers of engagement at work. Staff who get recognition are more likely to participate actively at work, such as contributing ideas, showing commitment, and having a great attitude towards work.

Here are more strategies for increasing employee engagement.

3. Improved productivity

Recognition creates a positive environment for work, where employees feel appreciated and happy with the employer. Consequently, the recognized staff work better and deliver more because they feel employers value their efforts.

4. Enhanced company culture

Employee recognition activities illustrate the company’s gratitude to employees and the conduct that the management expects from the staff. Thus, managers may use recognition to drive changes that improve organizational culture. For instance, colleagues might want to emulate work ideas from the acknowledged staff, and in the long run, embed some of the most recognized activities into the company culture.

5. Increased employee retention rates

Employee appreciation is an investment that fosters psychological safety in the workplace. This investment boosts employees’ confidence in their leaders, increases trust in the employers, and builds a positive workplace environment. As a result, employee loyalty heightens, and companies benefit from lower staff turnover.

Check out more employee retention strategies.

6. Improved organizational brand awareness

Public employee recognition strengthens a company’s brand. For instance, companies that often recognize employees publicly, say on company websites and news feeds, brand themselves as a good employer and credible organization. Hence, the company stands out as a viable option for professionals seeking employment and investors interested in a performing organization.

7. Boosted staff confidence

It is natural for employees to yearn for positive feedback. Getting appreciation for a job well done builds self-confidence and a can-do attitude. Furthermore, recognition that highlights employee commitment improves personal image and gives a social standing among the employee’s networks.

8. Empowered teams

Recognizing and approving a team’s effort is a super-fast way of building team spirit and encouraging teamwork. Appreciating team effort also amplifies collaboration and strengthens team bonding.

9. Improved communication

The process of employee recognition requires good communication to be successful. For instance, an effective way to develop the best recognition methods is by having talks with the staff to understand what they want. Such meetings open the door for communication between employees and management regarding other significant issues affecting both parties.

Check out this list of communication activities.

10. Continuous motivation

With a recognition program in place, employees look forward to a turn of receiving an acknowledgment. This desire births continuous morale for workers. Supervisors can combine formal and informal recognition to maximize the effectiveness of this motivation strategy.

Here are ways to motivate remote employees.

11. Heightened professionalism

Directing recognition practices to excellent performers influences the employees to scale up professionalism, such as respect, integrity, and competence. Demonstrating these good work ethics also builds on employees’ dependability in the long run.

Employee recognition criteria

Companies tend to acknowledge workers for different reasons. Here are instances that qualify an employee for recognition.

1. Exemplary performance

Performing one’s duties with utmost dedication deserves recognition.

For example:

  • efficiently managing a project
  • successfully leading a team in a given assignment
  • accomplishing a challenging task

An outstanding performance may cost employees much time, energy, and commitment. Recognizing the hard work and dedication is a rewarding feeling for employees.

2. Achievement of set goals

Employees who achieve or exceed targets prove themselves as company assets worthy of acknowledgment.

For example:

  • achieving a set sales target
  • maintaining operational costs within the budget
  • successfully launching a product

Managers may choose to acknowledge an individual or a team for attained targets to demonstrate contentment.

3. Value addition

Employees may earn recognition by adding value to services or products.

For example:

  • successfully introducing new features that solve a user problem
  • redesigning product packaging that results in more sales
  • enhancing customer product experience through follow-ups and offering after-sales services

Value addition benefits the organization through increased product trust, customer retention, and sales. This value-add warrants recognition for responsible employees.

4. Consistency

Consistent efforts from employees justify recognition.

For example:

  • reducing the carbon emission through adopting environment-safe measures
  • acquiring clients through consistent lead generation
  • building an effective team through continuous motivation and encouragement

Companies should acknowledge employees who take the initiative to innovate, drive change, or introduce a product. However small the progress may initially seem, the small steps in the right direction eventually result in significant achievements.

5.  Achieved milestone

Personal or organizational progress deserves acknowledgment for the effort put into achieving those milestones.

For example:

  • hitting a certain number of potential buyers, e.g., 100,000 email subscribers or social media followers in a year
  • graduating from a course, academic or professional, related to the job
  • completing a project milestone like launching, executing, product testing, or completion

Celebrating milestones and recognizing the employees’ efforts is an efficient tactic that persuades employees to complete projects and work towards overall organizational targets.

Check out this list of important employee milestones.

Examples of employee recognition

Companies usually repeat previous practices of acknowledging employees. However, alternating the forms of recognition can be more fun.

Here are the best examples of employee recognition.

1. Saying thank you

A simple thank you message expresses appreciation for employees’ jobs. Here are some effective ways to say, “thank you.”

  • Sending an appreciation email to the employee, highlighting the praiseworthy performance
  • Giving a verbal message directly to the employee to acknowledge commendable deeds
  • Sending a personalized thank you card for the admirable work
  • Pinning thank you notes on the company’s notice board to applaud employees

A good thank you message outlines the recognized employees’ desirable actions and states how those deeds impact the company. Thus, thank you messages should communicate a good example to adopt.

For inspiration, here is a list of employee appreciation quotes.

2. Awarding recognition certificates

Giving employees recognition certificates to acknowledge performance has a lasting impact. Those certificates become important credentials in staff’s employment profile and may form the basis for promotion, salary increments, and leadership opportunities.

For instance, managers may issue recognition certificates for the Employee of the Year award and Successful Project Completion certificates.

Check out more employee of the month ideas.

3. Issuing gifts

Giving gifts to performers gestures the management’s appreciation.

Various ways to present your gifts include:

  • offering a shopping voucher for employees to buy items of choice
  • family treats like paying for amusement park tickets, cinema, or meals
  • tailored gift items based on employee’s tastes and preference

When unsure of the best gift to offer, it is safe to go with what most folks appreciate. Alternatively, ask the recipient what they like to guide the selection of a suitable gift.

Check out this list of the best gifts for employees.

4. Granting access to company resources

Allowing staff access to company resources for free or subsidized rates is an inexpensive alternative for staff recognition. This idea is suitable for businesses that offer products or services that the employee consumes.

For example, companies may make these products accessible to the staff and their families

  • car parking slots
  • gymnasium training
  • swimming pool services
  • massage sessions
  • medical checkups
  • daycare services

Accessing these resources exposes the staff to customer experience, and the employees can give constructive feedback on the same.

5. Staff banquets

Celebrations compliment recognition, especially for big achievements. Employees may engage in the following partying ideas to celebrate their own.

  • Communal meals, such as lunch or dinner
  • Outdoor partying activities, like barbeques and picnic
  • Drink tasting event, for example, wine, tea, or coffee

Organizing staff parties helps bring colleagues together and improves bonding.

6. Badges

Managers may issue badges as a sign of appreciation for exemplary work. Badges are suitable for titles like:

  • best in customer service
  • best credit controller
  • best time manager
  • staff of the month

Staff may use their badges to showcase personal skills or team efforts to clients and coworkers.

7. Rotating trophy

Trophies are among the most lasting reminders of achievement. Employees may receive a trophy award as an individual or a team. For example, a marketing department may acquire the trophy for being the most productive department after introducing three high-end clients in a month.

8. Assigning ambassadorial roles

Appointing hard-working employees to be the company ambassadors is an effective way to appreciate and motivate coworkers. The best approach is to let staff champion the areas they enjoy most. For instance, a talented communicator may get the publicity ambassador, digital content marketing ambassador, or the brand ambassador title.

The ambassadorial role may be temporary or permanent, depending on the organization’s policy or discretion.

9. Mentorship

Offering coaching and mentorship opportunities is a suitable way to recognize and reward an employee who commits considerable effort to improve performance. In addition, mentoring helps staff grow career-wise and skill-wise. Therefore using appropriate mentoring programs is essential in coaching and growing the employees.

Here is a guide to work mentorship best practices.

10. Birthday treats

Treating employees on their birthday to recognize efforts uplifts staff confidence. Since birthdays are special events for the majority of the folks, making staff feel important on their birthdays has a double impact.

Here is a list of office birthday party ideas.

11. Public endorsements

Letting the public know about an employee’s good performance boosts the staff’s profile. Managers can endorse their staff publicly in various forms, including:

  • highlighting the staff’s achievements in company magazines, website, or newsfeed
  • congratulating a staff in the newspapers
  • endorsing skills on professional platforms like LinkedIn

Endorsements are effective recognition strategies that strengthen personal employees’ branding and competitiveness.

12. Internal recognition

Peer-to-peer recognition is a simple but effective way to acknowledge colleagues. Organizations can have different ways of doing internal recognition.

For example:

  • utilizing the staff notice board to display thank you notes or briefs and cutouts from magazine pages or reports
  • using a common communication platform such as Slack channels, WhatsApp groups, and Twist to commend a colleague on the threads
  • using regular staff meetings to acknowledge staff

Among the best approaches for internal recognition is using sincerity and varying the criteria for recognition, which ensure every employee has a fair chance for recognition.

13. Cash prize

Cash prizes seldom go wrong in appreciating employees. Cash is versatile, and the recipients can convert it into preferred rewards, including paying for desired services or products. When awarding cash gifts, it is best to have a structure to remain unbiased, transparent, and equitable. This tip helps to reduce dissatisfaction and complaints.

14. Social media

Acknowledging staff performance on social media is one of the best branding strategies. Some popular social media recognition includes

  • Facebook mentions
  • Twitter tags
  • WhatsApp status
  • LinkedIn endorsements

The recognition statements rank the company as an employer that values its employees. Concurrently, staff members benefit through an improved personal image on their social media networks.

Employee recognition’s role in leadership

Employee acknowledgment is an impactful staff empowerment tool.

Here are the roles of recognition in leadership.

1. Building Trust

Recognition programs facilitate mutual trust between employees and their leaders. For instance, these programs let leaders communicate that they trust employees to perform, while the staff members feel valued for their contribution.

Here are trust-building activities.

2. Building capacity

The process of staff acknowledgment builds self-confidence. Leaders use recognition to encourage employees to try more challenging tasks, including taking up leadership roles.

3. Goals alignment

Recognizing employees for their input in company deliverables makes employees learn how valued their contributions are. Leaders who acknowledge staff naturally promote employees’ desire to deliver more and meet the overall company objectives.

4. Decision making

Employee involvement in peer-to-peer recognition programs allows the staff to think critically about what is good for the company. Leaders may use this participation to improve employees’ decision-making skills as they select the colleagues to commend, mentor, or emulate.

Here is a list of decision making books.

5. Healthy competition

Developing a strong workforce involves creating a competitive environment for staff to learn and grow skills and talents. Managers use staff acknowledgment to create this environment and allow employees to unleash their potential.

6. Inspiring staff

Staff recognition aims at motivating and engaging workers. Leaders may use recognition programs to assess and meet coaching and mentorship needs within departments. Thus, stimulating the employees to remain committed and inspired.

Here is a list of inspiring quotes about success.

Tips for efficient employee recognition

These tips facilitate the importance of employee recognition.

  • Leaders should apply fairness and equity in the recognition programs and rewards to make the programs credible, acceptable, and effective.
  • Personalizing recognition messages by highlighting specific staff input makes the program more accurate and sincere. Companies should avoid generic statements which sound fake and unnatural.
  • Giving tailor-made recognition gifts and awards is an effective motivator. In addition, these gifts prove that the appreciation process was well thought out and not random.
  • Adopting employee recognition software helps HR professionals to select the most deserving employees to acknowledge and the most fitting rewards.

These tips help make the employee recognition process fair, customized, all-around, and easy to execute.


Employee recognition appreciates staff effort with praise and awards. The recognition process passes through formal or unstructured programs. When done right, employee recognition motivates staff, contributes to team capacity building, and aligns employees with company objectives. However, working in an ad hoc manner may cause problems such as bias and reverse all the benefits. To avoid these problems, organizations should establish a working recognition program or use employee recognition and reward software.

For more resources, check out these lists of employee engagement software platforms and employee appreciation day ideas.

We also have a list of benefits of happier employees and teams.

FAQ: Employee recognition

Here are commonly asked questions regarding employee recognition.

Why is employee recognition important?

Employee recognition appreciates the staff and results in increased motivation, boosted productivity, higher self-confidence, and enhanced project ownership. Therefore recognition provides the employees and the organization with growth opportunities.

Why is recognition important in leadership?
Recognition is important in leadership as it allows leaders to

  • monitor and improve employee performance through team building and healthy competition
  • resolve issues such as employee disengagement and staff turnover through communication and continuous motivation
  • mentor and coach staff to be more confident and better skilled in their jobs.
  • manage resources like time and funds better by acknowledging and rewarding effective and productive employees
  • delegate authority through capacity building, and training and development

Good leadership imparts a positive attitude, trust, and loyalty to employees and leads to attaining organizational objectives.

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People & Culture Director at teambuilding.com.
Grace is the Director of People & Culture at TeamBuilding. She studied Industrial and Labor Relations at Cornell University, Information Science at East China Normal University and earned an MBA at Washington State University.

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