9 Reasons to Optimise Your Company's Recognition Culture for 2024

Companies that have a recognition culture perform better

Studies have shown that a recognition culture within the workplace leads to a measurable improvement in overall company performance. Our study found that companies that manage and recognise their people outperform businesses that don't by 30-40%.

This is because employees who feel appreciated tend to work harder and seek more recognition, which in turn leads to increased productivity, accountability, and a sense of pride in their work.

When employees feel valued and important to the success of the business, they are more likely to be satisfied with their work, which can lead to better customer satisfaction and increased revenue for the company. Employees who feel recognised and appreciated produce better work meaning you can offer products and services at a higher quality, increasing customer satisfaction and retention.

Employees who feel recognised and appreciated work harder and perform better

Employees who strongly agree with the statement "I have received incredible recognition in my current job" are twice as likely to feel an obligation to work as hard as they can for their employers.

It will not come as a surprise to learn that appreciated employees work that extra bit harder. We've likely all experienced putting in lots of effort for little praise and how demotivating that can feel.

But the flip side makes all the more sense. When an individual feels recognised and knows their great work will be appreciated, they have more incentive to continue producing high-quality work.

In fact, when people receive the recognition they deserve, four key areas of performance improve:

1. Employee productivity
2. Employee engagement
3. Employee retention
4. Customer satisfaction

Receiving recognition not only helps employees know what standard of work to strive for but also cultivates a sense of pride in the work that they create. Knowing that increased effort will be rewarded makes their work life much more satisfying.

When good work is recognised, employees go to great lengths for customers

Our study stated that those who agreed with the statement "I'm confident that if I do good work I'll be recognised" are more than twice as likely to go to great lengths for customers.

The evidence is clear that when staff feel appreciated and recognised, they work harder. Another unexpected benefit is that employees then transfer this feeling of care and appreciation to customers. It's common that people who are happy and positive naturally share this with those they interact with.

The business benefits from employees going above and beyond, and customers get a better experience as a result.

The numbers speak for themselves. 41% of companies that use peer-to-peer recognition have seen significant positive increases in customer satisfaction.

A culture of recognition reduces staff turnover rate by 23.4%

Companies with a strong strategic recognition initiative have a 23.4% lower turnover rate than those without it. These same organisations, when they also prioritise employee engagement, have 31% lower voluntary turnover than organisations with ineffective recognition programmes.

Building a culture of recognition helps businesses keep their staff. Because they are happier, they are more likely to stick around and grow with the company, rather than looking elsewhere for progression opportunities. This often helps to improve the long-term growth prospects of the business.

Recognised employees also have improved psychological safety within the workplace. Overall levels of stress can be reduced when effort is acknowledged and adequately rewarded. Because of this feeling of appreciation for their efforts, staff are much less likely to leave an organisation.

Strong recognition practices make positive business outcomes inevitable

A huge 60% of best-in-class organisations stated that employee recognition is a key driver in individual performance and enables them to be higher-performing businesses. The very best companies in the world have experienced unparalleled success from their recognition culture.

Best-in-class organisations have strong recognition programmes that lead to better productivity, customer satisfaction, reduced turnover and increased colleague engagement.

Organisations with well-established recognition practices are 12 times more likely to have strong business outcomes such as improved customer engagement, better profitability, improved reputation and more environmental sustainability.

Praise leads to better results

It's true that some people are galvanised by criticism. It can even lead to them improving their performance or output. However, it's much more common for people to experience a performance boost after receiving praise. One study found that although 30% of people improve after criticism, a whopping 90% of people improve after praise.

Constructive criticism is a valid and necessary part of working life, but all it does is give employees a blueprint of what not to do. People use praise as a foundation on which to build. They will continue to raise their game to meet the same - or higher - standard as what they received praise for, then push on to receive further praise for future tasks.

Utilising this knowledge as an organisation can help your workforce develop strong self-esteem, leading to better quality work and improved business outcomes.

Peer-to-peer recognition is more effective than managerial recognition

In our 12 steps to creating a culture of engagement, we touch on how uniting employees is beneficial. In this context, peer-to-peer recognition and uniting your staff means you are 35.7% more likely to have an impact on your financial results when compared to managerial-only recognition.

This united culture means employees see other people going the extra mile which in turn motivates them to do the same, helping everyone strive for better performance.

It can also enhance employees' sense of belonging when it comes to the company and their peers which makes them more engaged and invested in achieving these positive outcomes. One of these improved outcomes is better financial results as work is completed to a higher standard and in a more efficient manner.

A culture of recognition increases connection

The great resignation, quiet quitting, and great reset are all terms that have not been out of the HR headlines since the pandemic. These are often symptoms of larger forces at play globally, impacting and altering your employee’s needs, expectations and ultimately how they show up at work.

One of the greatest impacts is the creation and management of a workplace culture that is no longer one-dimensional; how do we make and maintain a great company culture with an increasingly remote workforce?

The good news is that our research shows that a recognition-rich culture can have a significant impact on connection regardless of working arrangements.

Recognition increases sense of belonging

Belonging has become an increasingly important measure of your company culture…does it suit me, do I see people like me progressing here, do I feel included?

Research and experience tell us that the businesses that get this right reap the benefits:

• Included employees are 17 times more likely to say working brings out their best ideas. (BIWORLDWIDE)
• Organizations with the highest ethnic diversity are 35% more likely than the lowest to have above typical financial performance. (McKinsey)
• Diverse companies have 2.3 times higher cash flow per employee over a three-year period. (Bersin by Deloitte)
• Included employees are 6 times more likely to work as hard as they can. (BI WORLDWIDE)
• For every 1% rise in the rate of gender diversity, there is a 3-9% rise in sales. (The Financial Times)

Our 2023 benchmark survey, revealed some ominous pitfalls that those that don’t get it right.

Those who feel there is inequity in their organisation were 4 times more likely to wish they were working someplace else and 37% of them plan to leave their organizations in the next 12 months. They also were 7 times more likely to be harassed at work and 4 times more likely to report that harassment.

Our research shows a clear link between recognition and belonging.