Incentives for Growing Companies No.8: Creating a Culture of Recognition

When we are growing up, a lot of emphasis is placed on saying thank you - but as adults in the workplace it can all too easily be forgotten, as focus is diverted onto the transactional aspects of our lives: getting the job done, focusing on growth and so forth.

We regularly see annual reports which state “employees are our most valuable asset”. Why is it, then, that company actions (not words) often paint a picture for employees which fails to reinforce that. The pandemic proved a bit of a powder keg for what became known as “the Great Resignation”, later to be replaced with “Quiet Quitting” and depending on what you read, evolving into “the Great Stay”, as the economy battles with rising interest rates, a tightening of credit and the evolving threat of AI on jobs.

In the good times, it’s easier for everyone to be on board with the additional effort required for a growth agenda when all should feel the benefits in their pocket - but in an economy where a cost-of-living crisis is continuing to bite, it can be easy for an employee who is going above and beyond to feel underpaid and underappreciated, and this can be exacerbated by teams operating remotely. Let’s be honest - no one has ever put “being taken for granted” as an attribute of a company they want to work for.

It’s important here to differentiate between what is meant by reward and recognition. Reward is retrospective, transactional and is generally outcomes based - an exchange of money (or something else – e.g., shares) for services, efforts, or results. Typically, rewards are helpful in attracting talent to your organisation.

Recognition, on the other hand, is essential for retaining them. Recognition is relational – it can be spontaneous, unexpected, is independent of results, and usually an acknowledgment by a manager or peer in relation to certain behaviours. It can be relatively low cost – or even free!

Employees who feel appreciated, are much more likely to go the extra mile. An abundance of statistics from a quick online search reveals a similar pattern of a high correlation between being recognised at work and job satisfaction, the likelihood of staying in role, and externally an increase in customer satisfaction.

But a gesture of recognition needs to be genuine, meaningful, and timely or it loses its power. A recent survey by O C Tanner[1] (which polled 4,653 UK employees, leaders, HR practitioners, and business executives), revealed that whilst two thirds (61 per cent) of employees said leaders acknowledged the great work they do, a third (31 per cent) said that recognition was received in an “uncomfortable” way. According to the same survey, almost half (47 per cent) of UK employees say the praise they receive at work is meaningless and feels like an empty gesture.

It’s not always easy - how do you balance being the empathetic boss with the need to keep growing, keep delivering? Yet, recognition is widely regarded as being of great importance, if it’s delivered in a thoughtful, meaningful way. Research shows that feelings of belonging, and fulfilment can lead to high employee engagement, motivation for and satisfaction in the job – leading ultimately to higher performance – a win-win surely. It may be enough to say a simple personal “thank you” at the right time, or perhaps something more may be required, to recognise an individual or a team who have continued to go above and beyond, even when a pay rise hasn’t been as much as hoped for.

Turning this on its head, the opposite involves making your employees feel disposable – a resource to be expended. The snacks and table football won’t cut it when there is omnipresent insecurity, long hours, limited career development opportunities. The once-a-year appraisal can be fraught with difficulty – often turning workplaces in organisations with poorer cultures into a type of hunger games endeavour in the months leading up to it.

But spare a thought for those at the top – it can be lonely. Executives are human, so creating opportunities and initiatives for upward, peer to peer or external feedback (and appreciation), is important too.

Times may be a bit tough, but it is now even more important for organisations to look at their approach to recognition and ask the question, are employees being thanked for their efforts? Is it personal? Is it genuine? Is it enough?

Ultimately organisations that have a culture of trust and authenticity are those that tend to be the most admired, where people want to stay, through the lean times as well as the good.

Some advantages of recognition:

Personal Validation: being acknowledged for achievements, efforts, or qualities boosts self-esteem and confidence

Motivation and Productivity: Recognition is a powerful motivator. When individuals feel their hard work and contributions is noticed, and valued, it spurs them on

Relationships: appreciation and understanding creates a sense of belonging

Professional Growth: recognition for job performance leading to promotion, salary increases, and career advancement is an acknowledgment of skill acquisition and achievement, and enhances professional reputations

Strengthening Culture: a culture of recognition contributes to higher job satisfaction, engagement, and retention rates among employees. Feeling valued and appreciated fosters a positive work environment

Innovation and Creativity: Recognition of innovative ideas and creativity encourages individuals to think ‘outside the box’ and contribute new perspectives

Well-being: Being recognized and acknowledged is good for mental health, reducing isolation and ensuring a positive outlook