why employee appreciation is important

Why Employee Appreciation & Workplace Recognition is One of the Greatest Business Hacks!

With the escalation in employee turnover rate, business owners and managers today are faced with the increasingly difficult challenge of replacing a significant portion of their workforce each year.

Corporate gift-giving between businesses is essential, but more and more companies are now aware that they need to have some sort of employee appreciation or workplace recognition programs in place.

But, why is employee recognition so important?

Between 8 to 10 hours a day, and 5 to 6 days a week! That’s a significant portion of the waking hours that an employee spends working on projects and contributing to the company’s bottom line.

Through workplace recognition, employees feel appreciated and valued for the effort they put in and with that, a sense of accomplishment. Increasingly, workplace satisfaction has become one of the key factors in increasing productivity and loyalty to the company. This inevitably leads to higher employee retention.

A raise in salary seems to be a quick solution to the high turnover issue. However, several studies point to other motivators as key components in increasing workplace satisfaction.

If you’re a business owner or supervisor, finding ways to demonstrate appreciation is the number one thing you can do when it comes to scaling and nurturing your team.

What Is Employee Recognition?

At face value, employee recognition is when an individual or team’s efforts are seen, heard, and appreciated in a meaningful way.

More recently, it has developed into a corporate art form, used by top companies to retain the best talents. But it’s not just a fancy buzzword.

At a biological level, all humans have an innate desire to feel noticed and needed. Instinctually, we all want to know what kind of impact we are having on others.

To put it simply, recognition is an important feedback loop that ensures our survival. When delivered in a meaningful way, you can use this social instinct to your advantage, turning employee recognition into the fuel that will empower your team to strive for success.

This generally results in better habits, improved results, and an overall increase in productivity. When companies dedicate themselves to consistent and purposeful programs in employee appreciation, a positive cycle is generated and it becomes a part of its culture.

The Current State of Employee Satisfaction

In 2019, a study in the US conducted by a payroll technology firm known as, DaVinci Payments, found that around half of all workers between the ages of 18 to 38 felt that their hard work was going unnoticed by upper management (source).

They reported a lack of both formal and informal employee recognition programs and generally felt a feeling of disengagement. As the job market tightens with decreased unemployment rates, candidates can now afford to be pickier than ever before.

Generation Z and Millennials are also becoming the largest contributors of the workforce, which is why smart companies and business owners are using the art of recognition to their advantage, creating a hack for success through the introduction of new incentives.

The Cost of Dissatisfied Employees

When employees are dissatisfied, it creates a negative chain reaction that has costly ramifications in both time and money.

Dissatisfied employees are more likely to stir up drama, steal from their employer, call in sick, and negatively influence their peers and customers, not to mention the ensuing resignation or even termination.

A great deal of time is then spent in the recruiting and onboarding process in order to get the new hires up to speed. These put added strain on the rest of your team, as well as your customers.

One of the biggest myths around employee recognition programs is that they are expensive and time-wasting. However, the opposite is actually true.

Upfront, there will be an initial utilization of time and money, but the benefits will typically exceed the cost of the initial investment.

When employees feel appreciated, it results in better performance, improved teamwork dynamics, fewer days called off, and a decrease in stress. Improved workplace satisfaction also helps to attract and retain top talents in the organization!

How to Show Employee Appreciation (The Right Way)

Generally speaking, any positive feedback should be delivered at least 2 times as frequently as negative feedback, even as high as 5 to 7 times more often.

While appreciative feedback can be as simple as a sincere thank you at the end of a phone call or a great job at the closing of an email— there are even more effective ways!

Below is a simple guide followed by some examples to help you come up with a more effective statement of gratitude. It doesn’t have to be in any particular order, as long as it’s sincere and in a style that feels comfortable to you.

  • Call out what your colleague said or did.
  • Explain the impact it had on you or the organization.
  • Share a compliment.
  • Tie it together with a sincere thanks.


“When you helped me to finalize that report, it gave me real peace of mind. I know I can always count on you when it comes to accuracy and timeliness. Thanks again for your help!”

“I really appreciate receiving email updates from you. Your writing style is thorough, yet succinct, which helps me to quickly gather everything I need to know. Thanks for everything you do for us!”

The video below aptly explains the significance of employee appreciation and recognition!

Aside from words of compliment and constructive feedback in day to day operations, major holidays or employee anniversaries are the perfect time to show your employees that the efforts and sacrifices they’ve put in have not gone unnoticed!

From the Christmas holidays and Employee Appreciation Day (source) to employee birthdays, there is no shortage of opportunities for you to tap into these unique employee appreciation gift ideas to show them that you care, including for those long-tenured employees to recognize their long service to the company.

Creative Ideas for Employee Recognition

Recent studies support that young adults are more interested in rewards involving the gift of time and freedom, versus extravagant bonuses or gifts.

You can reward good performance with the flexibility to work from home, extra days of PTO, or a lunch outing with the CEO.

In addition to feedback from upper management, it is equally important to facilitate peer recognition. When employees are recognized in front of their peers and by their peers, it creates an inner drive to perform at the same level, since people tend to model their behavior after what is socially acceptable.

One method for facilitating group feedback is to create comment cards for each of your organization’s key values (i.e. collaboration, empathy, accuracy) and have your employees write down “shout outs” to team members and leave them in a dropbox.

At your next staff meeting, pass around a handful of cards and have everyone read them out loud. Your employees will love the public recognition and will likely display the cards at their desks like badges earned!

Why Employee Recognition Programs Fail

There are important reasons why most employee recognition programs fail, which is why they should be carefully thought through and regularly evaluated.

The first hurdle to overcome is getting buy-in from the entire leadership team. When managers are misaligned in the method and objective of a program, it creates disorganization and confusion amongst the rest of the company.

Another setback occurs when employees become accustomed to rewards and develop a sense of entitlement.

Even more, when recognition programs become too sugar-coated, people will shy away from negative and constructive feedback, which can cause a team’s performance to plateau over time.

This can have a detrimental effect on creativity and risk-taking, which is why it is important to experiment with different ideas on a regular basis.

The key to avoiding these pitfalls is to focus on constructive and useful feedback that corrects bad behavior and reinforces good ones. When these stop happening, it’d be time to change things up.

The Importance of Employee Recognition and Appreciation Cannot Be Ignored!

Maybe you’re sold on employee recognition programs, but feel hesitant to pull the trigger because you’re worried about how they will turn out.

Try starting out small, learning how to deliver meaningful feedback as a business owner or manager. It’s important to experiment with different methods, even turning to your employees for ideas on how to better reward them for their hard work.

Employee recognition is more important now than ever before when it comes to talent retention and having an engaged and productive team.

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