Reward & Recognition / 5 minute read

What is reward and recognition and why is it so important?

Written by Ami Dorkings

8 April 2021

Everyone likes to hear that they’re doing a good job. Whether it’s a few words over a cup of tea, an award, a promotion or a reward, whatever form that might take, it’s always nice to know that your hard work is paying off. But reward and recognition are more than ‘nice to haves’ and recognising your employees’ hard work and achievements does more than simply make them feel good.


Why is reward and recognition so important in the workplace?

Implementing reward and recognition strategies across your business helps your staff to feel appreciated and that, in turn, brings its own rewards. Employees who feel respected and valued are likely to work harder, work better in teams and give more focus and attention to your business goals, yet just one in three say their good work is regularly recognised.

Investment in reward and recognition, whether that includes monetary spend or not, can have a huge impact on motivation across your business. When employees feel motivated to achieve and strive to do more, businesses thrive. But feeling invisible or undervalued and receiving little or no recognition can leave your workforce feeling demotivated and uninspired – over 40% of workers cite one of these as the main reason they achieve less than they’d like at work.

We all crave recognition so it’s no surprise that acknowledging others’ hard work can have such positive effects in the workplace. But how do you get started with putting these engagement strategies in place?

How do you reward staff for hard work?

Though companies around the world are spending more than £36 billion on reward and recognition programmes, and an impressive 78% of managers deliberately focus on showing their appreciation to colleagues, most employees feel there is room for work around both reward and recognition.

The top frustration in the field, as recorded by Reward Gateway, lies in the fact that most recognition isn’t seen or celebrated by other people. On top of that, 23% admit they’re unsatisfied with the frequency of feedback they receive from managers. Without frequent feedback there are few opportunities to recognise good work, so this is a must, and it’s important to consider how staff want to be rewarded too. If more of a celebration where wins are seen by your entire business would increase satisfaction, then why not make that your regular reward format?

Why is recognition so vital to employers?

For individuals in any company, recognition is vital. It highlights how an individual’s work adds value to the wider business and acknowledges contributions which have real worth, ultimately creating a better sense of security in the business and motivating employees to continue the good work. For employers, it makes good business sense.

Employee engagement and retention are inextricably linked. Multiple studies have drawn links between the two as the more a person feels valued, recognised and rewarded by their company, the more likely they are to remain loyal to that company. In fact, they work in such harmony that 60% of recognition activities are implemented with the intention of decreasing turnover.

Research published in Human Resources Today found that "the number one reason why people leave jobs is limited recognition and praise" and yet a survey by Achievers discovered that 69% would be encouraged to stay at a company purely based on good reward and recognition programmes. To keep the best people in the right roles, therefore, it’s absolutely essential.

How do reward systems keep us motivated?

Staying motivated at work can be challenging, but there is plenty of evidence to suggest that rewards, and the promise of being rewarded, can help us to take positive action. Incentive theory has been discussed in psychology circles for some time and supports the idea that we are motivated to pursue certain courses of action in order to gain rewards. Naturally, the greater those perceived rewards are, the more motivated we become.

This is exactly why an impressive 69% of employees would work harder if they felt better recognised, as there would be an existing incentive to encourage the same, if not better, quality of work is realised going forward. Because of this, reward systems are incredibly valuable to employers and employees alike.


One word of warning, though. As it stands, 89% of managers feel their company is very good at recognising their workers, despite the fact that less than a third of employees feel recognised at work. This imbalance shows how perception can vary across management levels in any business, but ultimately if your employees don’t feel recognised enough, you need to increase your recognition strategies, regardless of your own assessment. So, where to start?


Take a look at our collection of blogs on reward and recognition in the workplace both here and on our R&R experts' blog at Penguins, or reach out today to get started on improving your strategies. Our Reward & Recognition team know what works, and what doesn’t, and are experts when it comes to customising incentives to you and your business. Want to find out more about reward and recognition and the impact COVID-19 has had? Check out our report on The changing face of reward.