The Positive Impact Employee Recognition Has in an Organization

Elena Hudgens
By Elena Hudgens 8 Min Read

A little appreciation can go a long way in boosting employee confidence. On the other hand, when employees feel like their hard work is going unnoticed, it can lead to discouragement and dissatisfaction. A 2018 study by SHRM reveals that 77 percent of U.S employees who quit their jobs may have been retained by their employers if they had recognized their dedication to their jobs.

Employee recognition is important for several reasons. First, it lets them know that their efforts are appreciated, boosts morale, and can help improve productivity. Recognizing your employees also shows them that they are part of a team. 

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This sense of camaraderie can make people more willing to go above and beyond for the company. In addition, employees who feel good about their work are more likely to be productive and engaged. So, is employee recognition worth the hustle? This article highlights some significant impacts of employee recognition in an organization.

Better Performance

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Clear communication from management is essential for maintaining positivity in the workplace. Your employees need to know what’s expected of them and feel confident that their voices are being heard. When everyone is on the same page, staying focused and motivated will be easier. 

For starters, you could initiate programs such as 360 Recognition to get things moving. However, improving your business may not be as simple as flipping a switch which is why, like with all things new, you need to exercise patience and understanding. 

You can also ensure better performance in your organization by:

  • Encouraging Social Interactions

Employees that interact with their co-workers and build rapport are happier and more engaged with their work. This can be as simple as having regular team lunches or after-work drinks.

  • Showing Appreciation 

Employees who feel appreciated by their employer are more likely to be satisfied with their job and motivated to do their best work. Simple gestures like thank-you notes or verbal recognition can go a long way in boosting performance.

More Confidence

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Morale is often seen as one of the most important factors for success in the workplace. A high work ethic within a company can lead to increased productivity and a more positive work environment, while low morale can have the opposite effect.

Many factors contribute to workplace morale, but one of the most important is how employees feel about their job satisfaction. When you appreciate your employees, they are more likely to be motivated and can reciprocate this by delivering high-quality work.

Another critical element is how you encourage your employees to interact with others in the workplace. If your employees feel like part of a team and have good relationships with their co-workers, there will be positive energy within the group, resulting in a streamlined workforce.

Retention Is Prevention

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Care and understanding go a long way to ensuring the growth and sustainability of a company. Businesses tend to take the route of employee turnover, which is often considered a necessary evil. But the truth is that high turnover rates can yield undesirable results for many reasons. Here’s why:

  • There are expenses involved when replacing employees. For example, the cost of recruiting and training new employees can add up quickly.
  • It can disrupt company morale. When employees leave, the aftermath can have a negative impact on those who are left behind.
  • There can be a loss of institutional knowledge. When long-time employees leave, they take valuable knowledge and experience that can be difficult to replace.
  • It should not be the norm. If you have a high turnover rate, your company can appear less attractive to potential employees and customers.
  • It can potentially affect different areas of your business, such as the bottom line.

Build a Positive Corporate Culture

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Corporate culture is the personality of a company. It is how employees interact with each other, customers, and the community. A positive corporate culture can distinguish between a thriving business and one that is failing.

Define your company’s values by reflecting on many aspects. What does your company stand for? What are your core values? If your employees can’t answer these questions, this may be a red flag. In this case, you should consider sitting down with them to define what kind of work environment your business wants to portray. Once you have defined your values, strictly live by them.

When hiring new employees, ensure they fit your company’s culture. A bad hire can quickly turn toxic and ruin an otherwise positive environment. Most of all, communicate and encourage transparency. An open and transparent workplace breeds trust and respect.

Frequently Asked Questions

What are the small ways companies can make their employees feel important in the workplace?

It can be as simple as knowing their name, asking how their day is going, and occasionally telling them to keep up the good work when applicable.

Why should a business focus on keeping current staff instead of hiring new ones?

If an employee faces retrenchment due to poor performance, a business that takes the time to identify the real issue shows care and understanding. This can achieve a higher status of loyalty and a positive work ethic.

What is an effective way to build morale?

Businesses, especially established franchises, tend to work in teams. So whether it’s big or small, building rapport amongst staff is vital for business development. You can achieve this by promoting team-building events and after-work gatherings.

How do incentives improve performance in the workplace?

Many employees site getting a prize at the end of a task or milestone is a great way to feel recognized. As a leader, this can be an avenue for you to identify where certain staff is falling behind and how you can better train them.


Occasionally recognizing your employees’ performance makes them more likely to meet or exceed your expectations. However, companies must remember that the staff they employ is as important as the business itself. A strong and dedicated support system can ensure customer satisfaction and brand awareness.

Whichever employee retention strategy you employ in your business, employee recognition speaks volumes and ensures that your employees are continually valued.

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Posted by Elena Hudgens
Elena Hudgens is an entrepreneur with 10+ years of experience. She started her journey by building her own e-commerce website on Shopify and turned her $1000 savings to millions in just 2 years. Soon she started different ventures in which she failed and succeeded. And now, she's on a mission to help other entrepreneurs with her life and business lessons.
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