Editor’s Note: WorldatWork, in partnership with the Center for Evidence-Based Management (CEBMa), is proud to announce a new Workspan Daily series that will utilize research as evidence to inform decision-making for the benefit of our readers and to encourage further discourse on topics vital to the total rewards profession. This series will present scientifically sound research on topics that rewards practitioners deal with as well as informed opinions that, at times, may actually contradict what sound research tells us.
Recognition happens when companies give personal, non-monetary rewards for employees’ individual efforts and work accomplishments. This is to recognize and reinforce employees’ desired behaviors. Many organizations recognize employees based on their performance. In addition to monetary rewards, they can recognize outstanding performers through compliments, gratitude, private notes or emails, public awards, or publication of their achievements in company newsletters. These recognitions are sometimes symbolic and come with no corresponding financial rewards.
Rewards and recognition are usually regarded as synonyms. Behavioral psychologists, however, make an important distinction between the two terms: rewards are tangible, transactional, conditional and expected, whereas recognition is intangible, relational, unconditional and unexpected. Because the difference between the two is not always clear and often ignored in both academia and practice, this review focusses on both recognition and non-monetary rewards, although it is recognized that they have slightly different meanings.
Why Might Recognition Be Valued
Studies in the social sciences draw on social comparison theory to predict that employee recognition increases performance. Social comparison theory states that people tend to compare themselves with others to make judgments regarding their performance. They are concerned not only about their performance in an absolute sense, but also about how they measure up in relation to others. The theory argues that people engage in social comparison to enhance their own self-esteem. Comparing favorably to others increases self-esteem and produces a positive effect, whereas comparing unfavorably lowers self-esteem and produces negative effects. Thus, receiving (private or public) recognition provides a positive signal about one’s competence relative to others. As a result, employees are motivated to attain a high level of performance to increase their chance of receiving recognition again.
Measuring the Impact of Recognition
There are several measurement tools available that measure whether employees feel recognized by their manager and/or the organization. One of the most widely used is the five-item scale developed by Migneault, Rousseau, and Boudrias. Respondents are asked to indicate how frequently (1 = ‘never’ to 5 = ‘always’) their manager displayed the listed behaviors: ‘My manager shows appreciation for my contributions,’ ‘My manager acknowledges my performance,’ ‘My manager appreciates my efforts,’ ‘My manager congratulates me for my achievements’ and ‘My manager takes an interest in what I’m doing.’
1. There is strong evidence that employee
recognition and non-financial rewards have a moderate to large effect on
There is wide consensus among both scholars and practitioners that employee recognition, and non-financial rewards in general, can have a large, positive impact on performance outcomes. There is indeed strong evidence from randomized controlled studies that employee recognition and rewards are an effective way to enhance or maintain performance. In the past 30 years, several research studies have consistently shown moderate to large effects, even when the recognition was merely a thank-you card or smile emoji. In addition, employees rewarded with verbal praise or positive feedback show more intrinsic motivation than those not being financially rewarded or not rewarded at all.
2. Recognition and rewards can have
a negative impact on performance when offered for simply doing a task.
Many controlled studies have consistently shown that employee recognition and non-financial rewards can have a negative effect on performance when offered to employees for engaging in a task when no reward is forthcoming.
3. Employee recognition contributes
to employee retention, commitment, and work engagement, but the effects are
Several cross-sectional studies find that employee recognition may contribute to retention. When controlling for other factors (eg, job stress), it was found that there is a small but positive relationship between (perceived) recognition from management and employees’ intention to stay.
4. Employee recognition has a large
positive impact on employee attendance.
A randomized controlled study demonstrated that an attendance-recognition program that included personal attention and recognition from senior managers substantially decreased absenteeism rates among employees.
5. Employee recognition produces
strong positive spillover effects on other employees.
A randomized controlled study demonstrated that a single team member’s recognition may produce strong positive spillover effects on other team members’ performance, as well as overall team performance, especially when the award recipient is in a central position of the team.
6. There is some evidence that
employee recognition can foster envy and resentment.
A cross-sectional study from the United States found that, in some situations, formal (public) recognition for performance may foster envy and resentment among colleagues. This may create social discomfort or embarrassment on the part of high performers and potentially erode their intrinsic motivation. The effect sizes found, however, were small.
7. The effect of employee
recognition is strongly dependent on the perception that work is meaningful.
A recent randomized controlled study found that, if the perception that work is not viewed as meaningful, employee recognition has a large impact on performance. However, if it is perceived as meaningful, recognition has a limited effect.
Based on the evidence found, employee recognition and non-financial rewards tend to have large positive effects on work performance. Providing an appropriate amount of recognition and/or financial awards requires policies and programs that encourage its provision. Training managers to provide it under the right conditions, timed appropriately, and in the right way is a prerequisite for maximizing its effectiveness.
About the Authors
Robert J. Greene is the CEO of Reward Systems Inc. and Principal in Pontifex.
Natasha Ouslis is a director and science translator at ScienceForWork.