The Impact of Recognition on Employee Performance in 2022

effect of recognition on employee performance

Recognition shows your employees’ appreciation for carrying out some specific predefined desired actions. This form of appreciation can be both monetary and non-monetary. There isn’t just one particular way of showing appreciation towards your employees. The wide array of possible options for showing recognition can confuse employers.

However, one certain thing is that recognition is one of the most effective ways of improving your employee performance. Be it monetary or otherwise, when employers make sure to provide proper recognition to their employees, it will positively impact your overall company culture and morale. Your employees will feel valued and appreciated. This will lead to better work from their end, and it will eventually help improve the company’s bottom line.

Let us take a closer look at the effect of recognition on employee performance.

Recognition is a Natural Reinforcer

When we say that recognition is a Natural Reinforcer, we imply that when you provide recognition to your employees properly, it will help reinforce their dedication to their work and the company.

Whenever any of your employees do something that you think deserves recognition, you reward them for it. Make sure that you do not take too long to provide recognition. Employes must be able to form a straightforward connection between the reward and the desired action.

One thing that we would like to emphasize is to not hand out the same type of reward to all deserving employees. It would help if you could instead give your employees choices to pick their rewards from.

Some people prefer monetary rewards. On the other hand, others will be better off with rewards of the experiential nature like a meal at a favorite restaurant or even tickets to their favorite concert.

You need to make sure that those employees who will get rewards know what behavior of theirs is getting them the rewards.

The Cognitive Impact of Recognition

Certain things happen at the neurological level whenever your employees receive recognition. The cognitive impact of recognition is something that cannot be understated. Positive cognitive impacts are bound to happen whenever your employees get rewarded or recognized. The two main cognitive effects of recognition on your employees are described below.

Improved Loyalty Towards the Organization

Your employees are the most valuable asset you have as an employer. The last thing you would want is to have your talented assets be poached by other organizations.

Proper recognition practices can have a very dramatic positive effect on your overall employee retention rates. Remember, your employees are people who also have their own wants and desires. They are not robots or machines which will not care about how they are treated by their employer or the organization they work for.

When proper recognition practices are employed in a workplace, that particular work will have more loyal employees who will not hesitate to go that extra mile for their company.

Better Morale

When employees feel part of the organization and know that their work is valued properly, they will be in a much better frame of mind when it comes to the actual work they have to do.

Making sure your company has proper practices about recognition can go a long way in improving the overall morale of your employees. This is a highly desirable thing when it comes to your employee’s productivity and their work ethics.

With proper recognition of your employee’s efforts, you will put yourself in a prime position to make sure that your employees do not get lethargic with their work. Proper recognition can also make your employees enjoy their work. This will not only improve the individual employee’s morale, but it will also create a culture of recognition within your workplace. This is a highly desirable work environment that you, as an employer, need to strive for. 

Visible Improvement in Company Culture

The culture of your workplace matters a lot. For many employees, money is not the sole factor that matters them. These employees look for many other types of perks when deciding on a place of employment. Obviously, the salary and benefits are important, but these types of employees also look for flexibility, transparency, and strong and ethical workplace culture.

One of the most cost-effective but high-impact methods of improving the company culture is providing employees with their due recognition. When employees feel like they belong and that their efforts are being appreciated, they will do their best for the company.

This will not only improve the productivity of your business, but it will also visibly improve the culture of your company. There are many benefits of having a proper workplace culture, the most important being better employee retention. This is something that all businesses should actively care about as it has huge potential in improving the company’s bottom line.

Better Understanding Between All Employees

When your employees know what gets them recognition and what does not, it will create a better understanding among all your employees. The main reason for this is that all employees know who is doing good work and who may be lagging a bit behind.

When employees understand their colleagues better, it will only bolster your employees’ overall morale and enthusiasm. Your employees will be much better positioned to know which colleagues are better suited for what kind of work. Another thing to note here is that it will also highlight which employees need a bit more help and supervision.

So, as you can see, proper recognition practices can go a long way in improving the relationship between your employees and the understanding they have with each other.


Proper recognition practices in the workplace can help you improve the transparency of your workplace. When employees know what gets them recognition and rewards, they will be much better placed to understand how their workplace operates.

Transparency in the workplace is essential. You do not want your employees questioning your motives and your true intentions. If your employees feel like they are being kept in the dark about what is truly happening within the company, it will not positively impact your employee’s morale and attitude.

You need to curate a culture of transparency within your workplace. Not only will it help your employees feel more engaged with their work, but it will also improve employee morale and attitude.

Healthy Competition

There is nothing like a bit of healthy competition when it comes to improving your employees’ work. With a proper recognition system in place, you will be able to promote a bit of healthy competition among your employees.

Another great thing about a proper recognition system is that all your employees will be able to tell what they need to do to receive that recognition. Also, when your employees get to see who is being rewarded or recognized for their hard work, it will instill a healthy sense of competition among those who did not receive recognition.

Of course, you do need to make sure that the competition does not get too overboard. Whoever you recognize for their work efforts, make sure that others are also in the loop about why that person received recognition from you. If your employees feel that you recognize someone who does not deserve recognition, they will not be happy.

This is why it is important to make sure that only deserving people get the recognition they deserve. As we have mentioned above, you want to encourage people to engage in healthy competition. You do not want to give out recognition so that it creates a toxic environment in the workplace.

Try Implementing Peer-to-Peer Recognition

Peer-to-peer recognition is an excellent way to give out recognition. When peers give recognition to their colleagues, the people on the receiving end know that they are being appreciated by people who know what they are doing.

This will lead to much better job satisfaction among the employees being recognized. They will be much better engaged with their work and feel a lot of pride in their workplace. As mentioned earlier, recognition can positively affect employees. It will be even more so when the recognition is handed out by peers. To put things really into perspective, a study was able to determine that peer-to-peer recognition can increase employee job satisfaction by about 90 percent.

Also, when even a single employee shows appreciation toward their colleague’s work, they will motivate others to do the same. This will create a culture where peer-to-peer recognition becomes the norm.

Employee Advocacy

When employees feel valued by their company, they will become advocates for that company. In essence, they will be like goodwill ambassadors of that company. This is a great way to enhance your company’s reputation and be able to attract new talent.

When your employees actively advocate for your company, word of mouth will spread about how good it is to work at your company. Your employees will undoubtedly have many other people in their network, and to tap into their network, nothing works better than having these employees advocate for your company.

Then there is also the fact that you will be in a much better position to judge who is going that extra mile for your company. When employees are actively advocating for your company, it means that they actually like working for you and your company. This is why it is so important to have proper recognition systems in place.

Recognition as a Behavior Regulatory Mechanism

Recognition can also sometimes work as a form of behavior regulatory mechanism. Think of it in this way – when you have a proper recognition system in place, your employees will be able to tell what are the desired behaviors from you that will get the recognition. This also means your employees will be able to tell which type of behavior is not appreciated within your organization. This means that you are effectively using recognition as a means to regulate the behavior of your employees.

Being able to regulate your employee’s behavior is highly desirable for you as an entrepreneur. With a proper recognition structure in place, you will be able to do just that. Your employees will also automatically be made aware if they are found to be lagging behind or if they are not being able to meet your expectations as an employer.

This will truly foster a much better working environment for all employees.

Final Words

So, as you can see from all of the above, there are plenty of benefits of implementing a proper recognition structure in your company. On top of that, showing appreciation toward employees who perform exceedingly well is the right thing to do. If your employees feel like they are not getting what they deserve, they will look for new places of employment, and you will lose your top-performing employees. This is literally the last thing you want to happen in your company.


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