Employee Recognition Can Go a Long Way—But It Has to Be Done Right

Employee recognition has long been part of the employer toolbox—think Employee of the Month awards, gold watches to celebrate a milestone work anniversary, or annual bonuses.

But in recent years, employee recognition has shifted just as much as the workforce and the workplace at large. It’s growing in importance as organizations look to enhance the employee experience, promote inclusion, meet the demands of employees, and take aim at ongoing reports of burnout and low engagement.

“The evolving workforce has prompted significant changes in employee recognition and appreciation strategies, particularly as companies aim to engage a diverse, multigenerational, and geographically dispersed workforce,” said Barbara Martell, SHRM-SCP, senior vice president and CHRO at insurance firm Allianz Trade Americas. Those new trends “encompass a shift toward more personalized, inclusive, and frequent employee recognition and appreciation programs, along with a focus on fostering a strong sense of purpose and belonging within teams.”

Employee expectations are another factor driving employer commitment to employee recognition, said Dustin Stipanovich, vice president of employee engagement at Charlotte, N.C.-based software company isolved.

“More than ever, employees expect more than a paycheck and good benefits from their workplace. They want to be recognized for their contributions,” he said, adding that data shows poor recognition is one of the top reasons employees are dissatisfied with their employers.

But while employee recognition is important, not all employers are getting it right. One of the biggest challenges is making sure not to exclude employees in the process.

“Unfortunately, not all employers are prioritizing a level of support, and there’s still a lot of catching up workplaces need to do to ensure team members feel satisfied and fulfilled in their roles,” said Charlotte Anderson, head of people experience at Canva, a graphic design software company based in Sydney. In fact, Canva research finds that 75% of employees wished they felt more appreciated.

Why Recognition Matters

HR leaders—and other experts—point to the benefits of employee recognition and appreciation.

“Recognition fosters a positive workplace culture, supports employee well-being, and helps reduce burnout,” Martell said. She noted that it also can indirectly encourage innovation by creating an environment where employees feel valued and motivated to share their ideas.

In addition, employee recognition serves as “a powerful tool for cultivating a motivated, loyal, and high-performing workforce, which directly impacts the company’s bottom line and long-term success,” Martell said.

Research bears this out. A recent study by Canva found that 94% of employees who feel highly appreciated love their workplace, and 91% love their job. In stark contrast, only 18% of those who feel unappreciated or neutral reported loving their workplace, and just 33% said they love their job. Companies with cultures of appreciation also have greater employee satisfaction: 81% of employees who are very satisfied said their company has fostered a culture of appreciation, compared to just 8% of those who are neutral or dissatisfied.

“Knowing how crucial recognition is to job satisfaction and engagement, recognition should be prioritized,” Anderson said.

Avoiding Mistakes

While recognition can go a long way in the workplace, employees want to ensure they get it right. Some programs and practices can actually do more harm than good, some industry experts say. In a culture where inclusivity is often king, these strategies can by contrast foster exclusivity.

“Many well-intentioned employers inadvertently isolate employees through certain recognition practices, which can negatively impact productivity and commitment,” said Allison Vaillancourt, vice president at Segal, an HR and benefits consulting firm based in New York City.

Some common pitfalls are practicing leadership-centric recognition, when recognition decisions are left solely to leaders without involving peers, and excluding remote workers from individual recognition. “When visibility and physical proximity are rewarded over modeling organizational values and achieving results, remote employees can feel disenfranchised,” she explained.

Another mistake is focusing solely on individual accomplishments rather than recognizing team efforts, which can foster unhealthy competition and hinder collaboration, Vaillancourt said. “When a sales team member known for withholding information wins the ‘Top Sales Producer of the Year’ award, it can demoralize others,” she said. “Similarly, recognizing a development director for exceeding targets without acknowledging the critical contributions of her research and prospecting teams can alienate those who played vital roles in that success.”

Additionally, Vaillancourt said, there often is a tendency to celebrate revenue producers while neglecting essential support roles. Recognizing only those who generate revenue—such as sales staff—at the expense of those who ensure operational efficiency—such as IT, HR, or facilities management—“can distance crucial support teams,” she said.

There’s also a trend of workplaces not giving proper recognition to junior and midlevel employees, Anderson said, with Canva data revealing that just 43% of those below the director level feel recognized as individuals, while 55% of directors and 74% of VPs and above feel appreciated. Women, too, often feel less appreciated than their male counterparts (51% versus 63%).

All told, these practices can negatively impact employees and put a damper on recognition programs—and on the organization at large.

“When employees perceive that recognition is reserved for a select few, it can breed resentment and disengagement,” Vaillancourt said. “This disengagement leads to decreased commitment and innovation, ultimately affecting productivity and even workplace safety. An environment where not everyone feels valued can stifle collaboration and diminish overall morale.”

Best Practices

A number of strategies can set up employers for success in their employee recognition strategies.

One of the biggest pieces of advice: Be varied in your approach to recognition.

Stipanovich said isolved’s recognition program revolves around three main components, “each designed to reach employees at different levels and create meaningful touchpoints across the organization.”

First, isolved has a companywide recognition program that’s open to all employees to ensure every department is engaged in celebrating individual and team achievements. Second, it partners with each department to create tailored recognition programs, allowing leaders to acknowledge their team members in ways that are both specific to their department’s goals and aligned with company values. “This customization encourages a stronger connection between teams and recognition efforts, making the praise more relevant and motivating for employees,” he said.

Finally, isolved offers a peer-to-peer recognition platform that allows employees to recognize colleagues they interact with, giving a companywide “shout-out” and awarding points that can be redeemed in a rewards catalog. “This catalog allows employees to choose items that resonate with them personally, adding a level of individualization that makes the recognition feel even more valuable,” Stipanovich said.

“Together, these three approaches create a comprehensive recognition ecosystem that encourages employees to feel seen and appreciated regularly,” he explained. “As a large company, we recognize that it’s challenging to witness all the extraordinary work our employees do daily. However, with these strategies in place, we can continually express our appreciation across the organization, supporting a culture of acknowledgment that positively impacts morale, engagement, and retention.”

Frequent Praise, Meaningful Rewards

Organizations should also make sure recognition is given often. “Don’t rely exclusively on annual recognition events,” Vaillancourt said. “Instead, integrate appreciation into everyday interactions.”

Martell added that employee praise should be frequent and timely. “Recognize efforts as soon as possible after they occur, so employees feel their contributions are noticed in real time,” she said.

According to the Canva study, among employees who are highly satisfied, nearly three-quarters (71%) are recognized at least a few times a month.

Rewards should also be meaningful. While gift cards and monetary awards are universally appealing, rewards that align with employees’ personal or professional goals—such as mentorship opportunities, training courses, or career advancement tools—can go a long way, Martell said. So can perks that offer flexibility and support well-being, such as extra time off, wellness benefits, or work-from-home days.

“These perks show appreciation while addressing employees’ personal needs,” Martell said.

At the same time, Anderson said, recognition doesn’t need to cost anything to be effective. “Just be genuine and from the heart,” she said. “Small gestures like a hype reel or personalized note can have a big impact.”

Tailoring Recognition to Employee Needs

Perhaps most vitally, employers also need to consider their own workers. What are their challenges? What are their preferences? Do they work remotely? In the office? How do they feel appreciated?

“Get to know what motivates each employee. Some may value public praise on social media or in company newsletters, while others might prefer a private thank-you note or a personal acknowledgment in a one-on-one meeting,” Martell said.

That includes considering multigenerational workers, she said.

“Each generation has different values, preferences, and motivations, which can affect how they perceive and respond to recognition efforts,” she said. For example, Baby Boomers may appreciate traditional forms of recognition, such as awards or public praise, while Millennial and Generation Z employees may prefer more informal and immediate recognition through digital platforms.

Allianz Trade introduced stay interviews to gather insights from employees on their preferred methods of recognition—information managers use to create tailored, meaningful recognition experiences for their teams, Martell explained.

The firm also uses a digital employee recognition platform that enables recognition across all levels—peer-to-peer, top-down, and bottom-up. “This platform allows employees to recognize each other publicly or privately, based on their preferences,” she said. “It includes a reward marketplace where employees can redeem recognition points for a range of rewards, from monetary options like gift cards to experiences like additional time off, or charitable donations to causes they care about.”

That approach, she added, ensures that all employees—whether hybrid or remote—“feel valued and included, fostering a connected and inclusive workplace culture.”

That’s imperative in the modern workplace, where workers who feel appreciated are likely to work harder and remain at a company longer than those who don’t.

“In today’s competitive landscape, employee recognition is more than just an HR initiative—it’s a core element of organizational culture,” Stipanovich said.