How employee recognition can transform your company culture

May 4, 2021 - 16 min read

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What is employee recognition?

What are the benefits of employee recognition?

How do you show employee recognition?

What are some examples of the impact of employee recognition?

Does your team deserve some recognition?

You know your team is exceptional. After all, you see them working hard for your company every day. But, when you’re managing a small staff or running a business, there’s a lot of things that demand your attention. Sometimes, that means employee recognition efforts fall by the wayside.

No matter how intentional you are, a simple thank you isn’t always enough to let your employees know you appreciate them. Employee recognition takes many forms. Making recognition part of your company culture can dramatically impact the success of your business.

However, many small businesses have no idea where to start when it comes to making employee recognition part of their culture. 

If you’re eager to acknowledge your employees, but you don’t know how, then you’re in the right place. 

In this article, we’ll explain what the purpose of employee recognition is, how to do it right, and the benefits it can have on your company.

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What is employee recognition?

Impactful recognition comes in many types and from many sources. Let’s start with what it is and what the purpose of recognition is. 

Employee recognition is when an employee is formally or informally acknowledged for effort, behavior, or results that align with company values or goals. 

That covers a lot more ground than just a pat on the back from your boss. 

The purpose of employee recognition is to make employees feel valued and appreciated. It provides extrinsic motivation — highly motivating to some, less so to others — and sends a signal to the employee and the rest of the organization about what type of behavior is needed and valued. 

Doing employee recognition wrong can leave your team feeling sour. 

Stale, disconnected recognition programs, and outdated recognition technology have led to a 37% decrease in how appreciated employees feel.

Who gives recognition?

Many people believe that recognition can only come from a manager or happen after something major happens. Contrary to popular belief, not all acknowledgment has to come from a higher-up. 

While managers traditionally offer formal recognition, anyone within an organization can give meaningful formal or informal recognition, too.

Creating an environment of employee recognition empowers everyone in your organization to acknowledge good work and feel appreciated for what they do. Peer-to-peer recognition can play a big role in helping employees feel appreciated for their work.

What are the benefits of employee recognition?

Effective employee recognition doesn’t just feel good, it can also help your business thrive. 

For small businesses, appreciation shown through an employee recognition program pays for itself.

Employees who are recognized more regularly have a better view of their organization, often leading to stronger work output, more satisfaction in their jobs, and better relationships with their team members.

benefits of employee recognition programs

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In fact, workers recognized within the last week are 103% more likely to feel supported in their role. They’re also 67% more likely to think their organization cares about their well-being more than profits.

Those numbers don’t lie. Recognizing employees makes a big difference for your team members, and part of being a great team leader is acknowledging good work in real-time.

Here are some of the top benefits of employee recognition.

Make employees happier

Encouraging regular recognition across your company keeps your team happy and productive. There’s a clear connection between happiness and recognition, with 82% of people reporting feeling happier when they’re recognized at work.


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Frequent, meaningful recognition keeps your team happier on and off the job. Plus, happy employees make the workplace a better place to be, which can boost employee motivation throughout the office.

Improve employee retention

Satisfied employees stay at their companies longer. It’s that simple. 

Recognition keeps your staff engaged and connected to your company’s goals and values. When employees feel valued, they’re more likely to continue working with your company. 

Case in point: in 2020, recognition led to a 47% increase in employee satisfaction and engagement.

Cultivate a culture of self-improvement

Regular recognition can have a massive impact on company culture, encouraging employees to grow, experiment, and learn new things. 

When employees are acknowledged, they feel a sense of purpose at work. This sense of purpose can encourage workers to become even better at their jobs.

Boost morale

Even a simple compliment can be the morale booster that inspires your team to do their best work.

When you notice the small things, your team feels appreciated and seen. Recognition can drive your team to feel better about their job and feel motivated to perform better moving forward.

How do you show employee recognition?

Showing your team that you notice their hard work doesn’t have to be difficult. There are many ways to recognize your employees, and switching it up is a great way to show appreciation. 

But, there are a few guidelines to offering impactful recognition. The best employee recognition follows the RISE formula, which stands for Regular, Immediate, Specific, and Encouraging.


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Offer recognition as often as you see great work. When you see someone going above and beyond, offer recognition immediately and look for ways to connect that exceptional employee performance specifically to the person doing it. Then, encourage your staff member to acknowledge one of their peers today, too. 

Here are some of the best ways to acknowledge and thank your team for a job well done.

1. Ask your employees how they prefer to be recognized

Some people love public acknowledgment, while others shy away from the spotlight. Always ask your team how they like to be acknowledged, so they feel respected and understood.

2. Create a peer recognition program

A culture of appreciation grows. An employee recognition platform like Kazoo can encourage employees to show appreciation for their colleagues.


3. Have a team activity day

Teamwork makes the dream work! Celebrate your team and acknowledge a job well done with a fun off-site activity. 

Bonding outside the office can help strengthen your team and make the business even stronger.

4. Write a detailed, handwritten note

Some employees want to see that compliment in writing. 36% of women prefer a written thank you note over verbal acknowledgment.

5. Offer spontaneous treats

No one says no to donuts in the break room. Surprise your team with some sweet treats, or offer to buy lunch to acknowledge employees.

6. Use a rewards system

62% of companies reward employees with gift cards. But, if you’re not sure what your employee wants, a reward system can be a huge asset. 

With systems like Bonusly, employees can acknowledge each other, earn points, and redeem rewards like gift cards.


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7. Sponsor professional development or other opportunities

When you create a culture of self-improvement, professional development becomes a big priority for employees. 

Sponsor a relevant class or certification of their choice to help develop their craft. Or, give an employee a stretch assignment, not necessarily a formal promotion but an opportunity to lead a project or drive an initiative. 

8. Feature employees on social media

Many employees thrive on social recognition. A shout-out on the company’s social media pages lets an employee show off their work accomplishment to their friends and family, too.

What are some examples of the impact of employee recognition?

While many large businesses see success from employee recognition, you might be surprised to see the huge impact recognition has on small businesses, too. 

No matter what size your business is, identifying how your employees feel most appreciated can greatly impact your workplace culture and business success.

Here are some powerful examples of what employee recognition can do for small businesses.

Ideas Collide

Design agency Ideas Collide noticed a significant boost in employee morale after implementing a peer-recognition program. 

Even as a small business, individual employee contributions got lost on large projects. Ideas Collide added a recognition and rewards program to showcase daily contributions and nominate employees for a larger award each quarter. 

After starting a peer recognition and reward program, Ideas Collide saw a 65% increase in employee recognition, with 92% of employees reporting feeling acknowledged by their peers and 84% feeling recognized by their boss.

Through the new system, Ideas Collide employees were recognized and rewarded in a meaningful way, which shifted the entire company culture.


UK building services company Sherwoods has a workforce spread across five locations. 

While employees work together, they often don’t get face time, which makes workers feel isolated and disengaged. Sherwoods achieved 100% employee engagement with their peer recognition program and employee discount program.

Sherwoods turned their employee recognition into an opportunity for remote team members to connect. As a result, the team sent each other 947 encouraging eCards over 18 months.

Employees enjoyed discounts on tech products, theater tickets, and groceries. In the same 18 months, employees spent over $78,000 through the discount platform and saved $7,800.

Sherwoods successfully identified recognition that made a difference to their employees and offered a solution to help them feel more united and appreciated.

Does your team deserve some recognition?

We all know that acknowledgment feels good. But, employee recognition goes far beyond giving one-off compliments. 

The right recognition methods can make your team stronger, make your company a better place to work, and even increase your bottom line. 

Building a better workplace doesn’t have to be complicated. Reward your employees with personal development through BetterUp.

Our professional coaching is a great way to show your employees that you’re committed to their success. Get started with BetterUp coaching today.

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Published May 4, 2021

Maggie Wooll

Head of Insights

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