From Tokens To Impact: How To Optimize Employee Recognition For The Modern Workforce

By Brie Harvey, Head of Market Research and Community, Achievers

There’s an interesting case to be made for why employee recognition software might be the most misused HR technology on the market. On one hand, it’s hard to argue with the evidence that’s accumulated over the last 70 years linking recognition to improved engagement and business outcomes. Plus, humans are wired to crave feeling like their efforts are noticed and appreciated and to despise invisible, pointless, thankless work.

What’s puzzling, however, is despite the fact that employers spend millions of dollars a year on employee recognition and rewards, only about half of employees feel like their efforts are noticed and appreciated, and only 40% of HR leaders claim their investment in recognition is delivering strategic outcomes.

It’s helpful to reflect on how our collective understanding of human motivation has influenced the landscape of recognition and rewards in the workplace through the years.

The Evolution of Employee Recognition (as inspired by Josh Bersin’s Recognition Maturity Model at Bersin by Deloitte)

Recognition 1.0: Using rewards to turn humans into coin-operated machines

In the early 20th century, the scarcity mindset left by the Great Depression resulted in workers being regarded more as coin-operated machines versus as human. Hard work was “rewarded” with a steady paycheck and employees were “recognized” every 10 years with generic trophies or tokens.

Recognition 2.0: Motivating employees with more types of recognition

By the 1970s, the work of psychologists like Maslow and Herzberg led to a more sophisticated understanding of how to leverage both extrinsic and intrinsic rewards to drive performance. Companies introduced more types of reward programs, like nomination-based awards and sales incentives, as well as perks and benefits to motivate employees beyond pay. Although recognition had more structure, it was still largely transactional and primarily manager-led or milestone-driven rather than being integrated into everyday work.

Recognition 3.0: Linking recognition to culture and business outcomes via technology

As Millennials entered the workforce in mass, shorter job tenures were normalized, and the cliched, perennial “war on talent” resulted in employers re-examining their strategies to motivate employees and retain top talent. Institutions like Harvard and Gallup underscored the strategic value of creating a strong culture of gratitude in driving both cultural and business outcomes. Forward-thinking HR leaders realized that arbitrarily thanking employees for milestones and giving out generic rewards didn’t help connect employees. As a result, more enterprises began implementing recognition and reward technology that promoted frequent value-based, peer-to-peer recognition.

Read More: HRTech Interview with Lisa Wallace, Director of Product at Assemble by Deel

The Map for an Effective Recognition Strategy

Once an organization has reached a place where it can align recognition to broader business efforts, the roadmap to cultivating a culture of genuine appreciation is quite simple. Three traits for an effective recognition strategy stick out as especially relevant to change fatigue and lagging employee performance.

1. Measure the impact of recognition on the metrics that matter for the business

When a recognition program is relatively new, HR typically thinks about success in terms of program usage and employee listening inputs. It’s helpful to determine where there are gaps in appreciation levels so it’s clear where focus is needed.

However, once a recognition has become ingrained into the culture, best-in-class recognition programs begin to look for ways to capture recognition impact metrics that link back to dollars and cents and look for ways to go beyond correlative associations by isolating variables, to get a better sense for causation.

Not all companies have the resources and infrastructure to be able to quantify ROI in terms of performance outcomes, but those that do tend to be much more likely to maintain strong executive and leadership support overtime.

2. Continuously focus on improving recognition quality

If the people in your business don’t know how to recognize effectively or why it matters, having a recognition tool won’t result in employees feeling appreciated and investments in recognition will fail to drive strategic outcomes. It’s imperative for employees to be educated about the difference between praise and recognition.

Praise is like a vague pat on the back that doesn’t provide employees with clarity about what they did that was positive. Recognition, on the other hand, should contain detailed, specific information about exactly what a person did and why that behavior matters to the bigger picture.

Researchers at Harvard found that of all the things that can boost motivation during a workday, the single most important is having a sense of progress. Both leaders and employees must understand that recognition shouldn’t be reserved for big milestones and outcomes; it should be about noticing meaningful progress and small wins.

3. Continuously focus on improving recognition quantity

Reaching healthy levels of recognition frequency is fundamental for moving the needle on engagement and culture. When recognition is received at least monthly, organizations experience transformative benefits.

Moving from quarterly recognition to monthly and monthly to weekly is an all hands-on deck effort. Even before the normalization of dispersed and hybrid teams, leaders and managers had exceedingly low visibility of what was happening on the frontlines. The people with the highest line of sight of where work gets done are the best equipped to call it out. Organizations must ask for the help of frontline employees to acknowledge the meaningful progress and micro-wins across the business.

Once employees become addicted to the feeling of making someone’s day, leaders end up with much higher visibility into the actual work being done. This offers the chance for leaders to reinforce the exact behaviors they want to see more of, leading to more inclusive and collaborative team cultures and helping employees feel seen and valued for their unique contributions at scale.

HR leaders – are you leveraging recognition as a strategic driver of motivation, or is recognition just a checkbox for HR?

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