Workplace Wellbeing

7 Reasons Your Company Should Have an Employee Reward & Recognition Program

Employee recognition is a simple, but often, overlooked aspect of employee performance. If leaders want to increase productivity, employee retention, engagement, and build cultures that attract top talent they need an employee recognition program. Here are 7 reasons why.

Ryan Carruthers

Published on 

August 3, 2021

Updated on 

Time to Read

mins read time

Every business wants a motivated, happy workforce. Not just because it’s “nice to have,” but because it has specific, real-world benefits. When your team is engaged and bought into your mission, everyone pulls in the same direction to help the business achieve its goals.

And what’s one of the best ways to motivate your workforce? Rolling out an employee reward and recognition program.

What Is Employee Recognition?

Employee recognition is publicly or privately acknowledging an employee’s exemplary behaviour, hard work, achievements, or teamwork. It’s simply giving credit where credit is due.

Importance Of Employee Recognition

Employee recognition is important because it’s critical to employee engagement. Leaders can’t expect high-potential employees to show up every day and give their best if they don’t feel like their good work is valued. Without recognition, employee morale will plummet and, shortly after, so will employee retention. With these dire consequences, there's no excuse for a workplace to not adopt this low-cost strategy o positive reinforcement.

Here are seven reasons you need to start working on your reward program right now:

1. Recognition Drives Employee Engagement

Think about a time you went out of your way to do great work.

Maybe you worked long hours to hit a tight deadline, or smashed a big client presentation, or went the extra mile to resolve a customer issue.

Either way, you put in a lot of effort on behalf of your employer to do a good job. If you hadn’t done it, the business would have suffered. Of course, you’d want to feel like your work has been recognized and appreciated by your team and higher-ups. You don't expect to be on a wall of fame, but a simple gesture or public recognition would certainly motivate you to do it again.

Recognizing great results is one of the biggest drivers of employee engagement. On the flip side, when employees feel they’re working super hard and exceeding expectations but aren’t being recognized for it, they’re naturally going to feel pretty demotivated.

So it’s no surprise that, according to research from Quantum Workforce, employees are 2.7X more likely to feel highly engaged when they believe their positive work will be recognized.

Importantly, that doesn’t mean they expect a handshake and a pat on the back from the CEO every time they do something good. Instead, they expect positive feedback from the leaders who are closest to them, with 52.5% of employees stating they want more recognition from their immediate manager.

2. Employee Engagement Boosts Team Performance

Okay, so we know that recognizing your employees’ efforts makes them feel more engaged. But why does that matter?

Or, to put it another way: why is employee engagement a goal worth reaching for?

Again, it’s important to understand that having an engaged team isn’t just a “nice thing” –– it offers wide-ranging benefits to employee performance.

A meta-analysis from Gallup offers valuable insights into the specific results you can hope to enjoy from building a more engaged workforce. For instance, did you know highly engaged business units see a 41% reduction in absenteeism and a 17% increase in productivity?

As well as performing better, engaged workers are less likely to leave, which means you get to enjoy the benefits of their high performance for longer.

Indeed, in high-turnover organizations, business units that are highly engaged see 24% less turnover than other units. The gains are even more substantial in low-turnover organizations, where highly engaged business units see a remarkable 59% less turnover.

Given that the Work Institute estimates the cost of turnover to be anywhere from 33% to 200% of the departing employee’s salary, it’s clearly in your interest to drive engagement and increase retention.

3. Build Trust on Your Team

Employee recognition can be a highly effective way to build trust in your workforce. And when everyone trusts one another to make smart decisions and do quality work, the benefits to team management are tangible.

According to Harvard Business Review, people at companies with workplace cultures that encourage peer recognition report:

  • 74% less stress
  • 106% more energy at work
  • 50% higher productivity
  • 13% fewer sick days
  • 76% more engagement
  • 29% more satisfaction with their lives
  • 40% less burnout

Who wouldn’t want to access all those positive results from their employee recognition efforts?

4. Leverage the Benefits of Employee Advocacy

As of 2021, there are 3.78 billion active social media users worldwide, with about two-thirds of all people over the age of 13 using social media to some extent.

In other words, there’s a pretty good chance that a sizable chunk of your workforce uses social media!

Just think how much potential reach that gives you. The average Twitter user has 707 followers, so if you’ve got 10 employees, that’s a potential audience of almost 7,100 people. Wouldn’t it be great if you could encourage them to post on behalf of your company?

That’s what employee advocacy is all about.

Encouragingly, research suggests that employees are often pretty open to promoting their companies through social media. Global PR firm Weber Shandwick found that:

  • 50% post messages, pictures, or videos about their employer on social media
  • 39% have shared praise or positive comments about their employer online
  • 33% post messages, pictures, or videos about their employer on social media without any encouragement from the employer

So a lot of companies are already benefiting from employee advocacy, even if they’re not actively seeking it out. And it stands to reason that if your workforce is engaged and motivated, your employees are more likely to post positively about you.

Given that creative employee recognition ideas and programs are a fantastic way to drive engagement and motivation, you can use them as a tool to drive positive messaging from your team on social media.

5. Improve Performance in Your Sales Function

There isn’t a company on the planet that’s 100% satisfied with the performance of its sales team. Everyone wants to reach more prospects, generate more leads, and close more deals.

Of course, there are lots of ways to help your sales team perform better. You can run training programs, invest in new sales software, and optimize your processes. But none of those tactics is more powerful than simply engaging and motivating your sales function.

If your reps feel motivated, they’re more likely to hit targets and drive your business growth.

This is backed up by another finding from Gallup’s meta-analysis, which found that the behaviours of highly engaged business units lead to 21% higher profitability.

When it comes to building a motivated sales team, a lot of businesses resort to financial incentives. However, research suggests that might not be the best approach. In fact, according to The Culture Works, just 17% of salespeople rank money as one of their very top motivators.

So if cash bonuses aren’t the most effective way to motivate your sales team, what else should you be doing?

One approach is to encourage a little healthy competition among your reps by rolling out a sales leaderboard. According to Leadsquared, sales leaderboards offer the following wide-ranging benefits:

  • Improved job satisfaction
  • More efficient results tracking
  • Stronger performance
  • Reduced stress
  • Energized reps

6. Boost Employee Wellness

In a post-pandemic world, employee wellness has become a bigger focus than ever before.

With tens of millions of people worldwide working from home for the first time, issues like mental health, stress reduction, and mindfulness have been placed under the microscope, prompting many businesses to roll out corporate wellness programs.

Employee recognition initiatives can play a key role in your wellness efforts. While they’re by no means a silver bullet for resolving mental health challenges, they can certainly help your workforce feel happier and more connected. Indeed, one study from the Society for Human Resource Management found that:

  • 70% of employees say recognition makes them feel emotionally connected to their peers
  • A further 70% say recognition makes them happier at home

We all have the occasional bad day at work. Sometimes, all it takes to make us feel better is a little recognition that we’re doing a great job.

7. Foster a Culture of Self-Improvement

We’ve already discussed how recognition programs can have a positive impact on staff turnover. Happy employees want to stick with you for the long term rather than jump ship.

But that doesn’t mean they’re content to simply stay in their current job and keep picking up the same old paycheck. When employees are truly engaged, they actively seek out opportunities to learn new skills and improve their existing traits and behaviours. That means they’re more likely to take advantage of employee training solutions and other upskilling opportunities that will help them on their career path.

In this way, a successful employee recognition program can lay the foundations for instilling a culture of self-improvement across your business.

When staff actively want to learn and improve, your training and development programs become far more effective.

For instance, imagine you want to roll out a new process or tool. Maybe you want to optimize the way you report on results or implement a more efficient workflow using a solution like Asana or Pitchbox.

Chances are, you’ll need to run some sort of training program to set expectations and ensure everyone knows what they’re doing.

If your employees aren’t bought into the project and the results you’re hoping to achieve, they’re not going to engage with your training, which means you won’t see the benefits of your new tool or process.

That means you’ve wasted a bunch of time and money.


If an organization has low levels of engagement and a negative culture, launching an employee reward and recognition program isn’t going to single-handedly make everything better overnight.

However, it’ll definitely be a step in the right direction.

When employees are recognized for doing amazing work and displaying behaviours that align with your company values, it becomes much easier to get them bought into your long-term strategy.

About the Author

close button

Hear how they started with Together