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Employee Recognition: What It Is, Why Awards Matter, and Appreciation Ideas You Can Use



“Employee recognition” is a phrase that is used often, yet many times it is misunderstood by employees and management alike. The following definition adds clarity to what we mean when we use the phrase.

Employee Recognition: Acknowledging and rewarding the effort, accomplishments, and contributions of an employee or team when they reflect the values, mission, or goals of your organization.

While recognition can take many forms, the most effective recognition occurs when a company adopts a holistic approach. We refer to this comprehensive strategy as Total Recognition, and it requires companies to show their appreciation across three core levels: formal recognition, informal recognition, and day-to-day recognition.

We cover these areas in greater detail in Chapter 3. However, let’s first take a look at why employee recognition is so critical to the success of your business, as well as the many key performance indicators (KPIs) that improve when a company adopts a Culture of Total Recognition.


It doesn’t matter if you’re selling hot dogs or hedge funds, employee recognition is critical to the success of your business. And, according to an abundance of troubling statistics, showing appreciation to your team has never been more important than it is right now.

Here are just a few of the reasons why.


The urgency to recognize your employees is tied, in part, to the terrible state of employee retention. Industries across America are struggling with record-high turnover rates, and some sectors are so crippled by low levels of retention that the entire industry’s survival is in jeopardy.

Do you know what influences an employee’s decision to leave their job more than any other?

That’s right, not feeling appreciated is the number one reason employees walk away from their employers. In fact, 66% of employees say they would leave their jobs if they didn’t feel appreciated. That number is even higher for millennials, with more than 75% reporting they’re happy to walk away from a job that doesn’t value them.

If history is any indication, this is a trend that’s likely to increase in the coming years. From 2012 to 2017, the number of respondents who indicated they would quit if they felt underappreciated rose by more than 50%.


In addition to improving retention and reducing turnover rates, employee recognition has a direct impact on a company’s employee engagement efforts. Recognition plays such a critical role in employee engagement that it’s included in one of the 12 questions Gallup asks as part of their Q12  research – the standard by which employee engagement is calculated both nationally and globally.

Gallup asks all participants to respond to the following statement: “In the last seven days, I have received recognition or praise for doing good work.” How an employee responds here has a tremendous impact on their employer’s bottom line. Variation in responses to this question accounts for a 10%-20% difference in revenue and productivity.

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