5 Eye-Opening Statistics to Cement the Importance of Rewards and Recognition in the Workplace

Has Employee Recognition taken the back seat in your organization? Let’s change that!

It’s a running joke among millennials that they live for the weekends. But doesn’t that sound depressing to you?

Why should anyone spend 5 out of 7 days a week in a place where they dread going to?

This is not only an unhealthy approach to work but also kills all the enthusiasm and creativity in employees with time. And ramification of this approach is toxic.

So, how do you create a workplace where employees simply love showing up?

The most common answer to that would be by promoting the right culture. A culture with respect, trust, mutual understanding, collaborative work environment and more. A culture which makes your work-life more balanced and comfortable.

With frequent absenteeism and high employee attrition becoming the topmost challenges of management, a supportive work environment is paramount.

Ideally, the focus should be on fostering an environment that delights, engages and motivates employees to contribute their best efforts. And the practice of mutual appreciation and timely rewards and recognition is an integral part of building a great company culture.

While external factors such as salary, comfort, location play a big role in an employee’s degree of engagement, but if the vibe of the workplace isn’t right everything else fails.

Offering timely rewards and recognition is a proven morale booster. When employees are appreciated for their contribution, their attitude or any specific attribute, it leads to an optimistic attitude among them. It aids to their pursuit for job satisfaction.

Please note that employee appreciation is not an agenda that you need to tick off your to-do list. It also shouldn’t be limited to a once in a month ‘performer of the month’ award either. Expressing appreciation and offering rewards and recognition should become an obvious and most natural part of the company culture.

Importance of Rewards and Recognition in Business

Presenting 5 Eye-opening statistics for managers and employers to re-establish the need for promoting rewards and recognition in the workplace. 

#1 Rewards and Recognition in Employee Retention

Employee Retention is the biggest challenge for managers everywhere. A high turnover rate is extremely unhealthy for any company. It can derail projects, disturb the momentum of the on-going agendas, incur the high cost of hiring and training new employees and often leads to a toxic environment in the company.

Statistic #1: Employees whose managers consistently acknowledge them for good work are 5x more likely to stay at the company. Those whose managers consistently help them manage their workload are 8x more likely to stay, though only approximately half of managers effectively accomplish either.

While there can be many attributes to high turnover, an employee’s happiness is the most crucial one.

People don’t leave jobs, they leave managers.

Nobody likes to be ignored or taken for granted, especially not in the workplace. In the ever so competitive business world, each piece of work requires a certain level of skills and dedication. When these efforts go unnoticed, employees feel unhappy and dissatisfied. This has been one of the top reasons for high attrition.

On the contrary, when employees feel valued at work, they are more invested in their jobs. They build better bonds with their managers and form stronger teams.  By recognizing your employees, you can make sure they’re emotionally invested in their job and in your business as a whole.

More than ever, culture is a competitive differentiator now.  It is an indispensable part of attracting, engaging and ultimately retaining employees.

People want to know they matter and they want to be treated as people. That’s the new talent contract. ~Pamela Stroko

Companies that consistently recognize their employees’ efforts enjoy a much lower employee turnover rate compared to those that do not. Companies are investing more and more on recognition program and practices. This is a path that every modern organization is out to follow.

Takeaway: Employee recognition is an important factor for attrition. When they are recognized they are happier, they are in a better mood and it translates directly to the commitment with the company.

#2 Importance of timely and frequent recognition practices

To make employee recognition impactful, it must be a frequent and timely affair. Merely practising recognition in a once-in-a-blue mood fashion will only do more harm than good.

Statistic #2: Over one-quarter of respondents (26 per cent) ranked “recognition for my work” in their top three important factors for staying with their current employer, but nearly 1 in 5 (17 per cent) said their manager/employer was “horrible – they never recognize my work” and the largest group of respondents (43 per cent) ranked their manager/employer as just “okay” (recognizing them annually or quarterly at least).

Recognition is an art and you must pay close attention to what to say, when to say and how to say it. Also, an employee’s performance at the job shouldn’t be the sole criteria for rewarding employees. Depending on the nature of the business and values of the company, there should be multiple recognition categories for different departments, different roles and different types of jobs.

Recognition is not a scarce resource. You can’t use it up or run out of it. ~Susan M. Heathfield

Other important factors to be noted here are timeliness and frequency of rewarding employees. Employee Recognition like any other form of motivation is short lived and people tend to forget about it in due course of time. So you need to do it over and over again. If you see anything recognition-worthy, recognize right away. Delayed recognition is as good as denied recognition.

Similarly, you should follow a fixed interval for certain important rewards. You shouldn’t keep your employees hanging for receiving their due rewards.

Takeaway: Employee recognition is effective when you don’t simply do it for the sake of doing it. It should be done in a frequent, timely and fair manner.

#3 Rewards and Recognition in Employee Branding

Employee Advocacy and employee branding are becoming strategically important recently. Employee advocacy basically is the promotion of a company and its brand by its employees.

Statistic #3: 66 per cent of HR Managers agree recognition helps towards creating a strong brand.

You might think that employee recognition and employee advocacy are two very different ideas and wouldn’t have a strong link. In reality, they are very closely related. When employees feel appreciated and recognised at work, they become active advocates for the company and its products. Simultaneously, when employees become advocates they nurture a culture of appreciation in the workplace. They attract better candidates and promote positivity and engagement.

With the unbelievable surge in various social media sites, these have now become the prime platform for employee advocacy.

You can’t sell it outside if you can’t sell it inside. ~Stan Slap

A company’s online reputation is crucial for any modern business to thrive. Let’s take a look at just how effective employee branding is:

  • Brand messages reached 561% further when shared by employees vs the same messages shared via official brand social channels (MSLGroup)
  • Content shared by employees receives 8x more engagement than content shared by brand channels. (Social Media Today)

Shocking, isn’t it?

This is simply because spreading the word at events, or through general word-of-mouth, or on personal social media handles builds more trust over paid content. It is the best form of promotion because participation is voluntary and out of genuine interest.

Takeaway: In today’s competitive world, where companies are thriving to maintain a good image, positive word-of-mouth promotion is very crucial. Recognition fuels good relationships, helps to create a positive atmosphere at work and subsequently increases employee advocacy.

#4 Productivity and Employee Recognition

A culture of gratitude and appreciation in the workplace promotes intrinsic motivation among employees. Let’s try to understand how motivation actually works and how it actually impacts on productivity.

Statistic #4: 80 percent of workers said they would be willing to work longer hours for a more empathetic employer, and a vast majority would like to be praised more frequently at work.

Maslow’s Theory of Needs

According to Maslow’s Theory of needs, with the Hierarchy of Needs, humans are motivated by needs. He classified the needs into a pyramid of five levels on priority basis. He said when one need gets satisfied, it ceases to be a motivating factor. Once this happens, the next set of needs in the hierarchy order takes its place.

People often say that motivation doesn’t last. Well, neither does bathing – that’s why we recommend it daily. ~Zig Ziglar

He placed the needs into five categories –  physiological, safety, social/belongingness, self-esteem, and self-actualisation.

From the theory, managers can learn to take note of employees needs and act on them. The categories physiological, social/ belongingness, self-esteem, and self-actualisation depend largely on good recognition practices and company culture.

But why is motivation so important in the workplace?

The answer is simple, motivated employees tend to perform better and are more productive in their jobs.

It is a proven fact that organizations that regularly recognize employees, massively outperform those that don’t. Motivated employees feel empowered and they often go the extra mile to complete a task.

Motivated employees have a sense of commitment to the organization’s goals and objectives. They can lead to increased productivity and allow an organization to achieve higher levels of output.

To survive in the competitive business environment, building a workforce of happy and satisfied employees goes a long way. You cannot direct all your focus on profitability and ignore the happiness of your employees. Both must go hand-in-hand.

Takeaway: If you want your workforce to be committed to the organization, you must give them the right environment to grow and thrive. When employees are appreciated, they are motivated and it resonates directly in their performance level.

#5 Role of Rewards and Recognition in Customer Service

Employee satisfaction is hugely intertwined with customer satisfaction. Satisfied employees lead to satisfied customers.

Statistic #5: 41% companies that incorporate recognition have seen a positive increase in customer satisfaction.

When employees are treated well inside the organization, they work better, they are in a good mood and it gets reflected in their customer interactions. And naturally, good customer service leads to improved brand awareness.

72% of customers will tell at least six of their friends about a positive experience, according to The Huffington Post.

Conversely, when employees are dissatisfied and unhappy with their jobs, they lose their motivation and tend to underperform. Low employee satisfaction can negatively impact the company operations, causing unhappy customers and hurt profitability.

I have always believed that the way you treat your employees is the way they will treat your customers, and that people flourish when they are praised. ~Sir Richard Branson

Companies often emphasize hugely on creating a customer-centric business. But it’s high time that they acknowledge that only when customers and employees both are placed together at the forefront, business can truly thrive.

Takeaway: You must treat your employees just like you treat your best customers. Good employee experience leads to good customer experience and good customer experience leads to satisfied, happier and loyal customer base.

Take care of your employees and they will take care of your business.


If you see employees as important investments, then you realize the need to show appreciation for jobs well done, promote peer-peer recognition and create an overall supportive work environment.

Rewarding and recognizing is no longer a criteria that needs to be checked off from your to-do list but a must-have in every organization.

You must let go off your conventional methods of recognizing employees and switch to modern and more frequent ones. HR Tech plays an important role in making HR processes efficient and more impactful.

Treat employees like they make a difference and they will. ~Jim Goodnight

You might want to keep a track on your recognition practices through surveys and feedbacks. Pulse surveys are a great way of running a quick check on what’s working and what isn’t.

A lot of cloud-based R&R programs are offering smart and smooth solutions to managers to streamline their efforts. From instant recognition, robust internal communication to flexible rewarding options, cloud technology has made the act of recognition and appreciation simply effortless.

There are certain essential criteria that should be met in a Rewards and Recognition Program. The program should necessarily have a well-defined criteria, maintain fairness, maintain timeliness and have variety.  Keeping a check on these criteria becomes easier when you leverage technology to transform your business.

Related: 7 Unique Ways in Which HR Systems are Creating an Organization of Tomorrow

Darsana Dutta works as a Content marketer at Vantage Circle – an  Employee Engagement and Benefits Platform. Darsana loves to keep herself up-to-date and share her views on the latest trends around employee engagement and human resource management.

HR management software app system CakeHR human resources
softwareadvice FrontRunner HRIS HR management software app system CakeHR human resources
HR management software app system CakeHR human resources
HR management software app system CakeHR human resources

CakeHR is an award-winning HR software company that provides attendance, performance and recruitment management for customers worldwide. More information at www.cake.hr

Written By

Guest Author

If you have exceptional writing skills and would like to share your expertise with a large audience of HR executives, business owners, and managers, we'd love to hear from you!