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  • Writer's pictureVrunda Chauk

The Psychology of Employee Recognition: Understanding What Motivates Your Team

Does your organisation have an employee recognition program? If yes, here is how you can make it more effective. If not, read this article to understand how to create one that is based on human psychology.

The Psychology of Recognition

We can all agree that employee recognition is important. According to one study by Glassdoor - employees who feel recognized and appreciated for their efforts are 53% more likely to stay with the organisation over the period of next three to six months.

Recognition will also have an impact in the organization: higher productivity, better work performance, and increased job satisfaction. These are just a few of the reasons why employee recognition is important. If you really think about it, it seems common sense right? If employees are working hard and going beyond what is expected of them, then recognizing their hard-work and appreciating their efforts seems to be a way of expressing your gratitude towards them.

"Always treat your employees exactly as you want them to treat your best customers." - Stephen R. Covey

3 Impactful Ways of Appreciating Employees

Here are 3 types of employee recognition that are rooted on human psychology:

Verbal Public Praise

This is one of the simplest and most effective methods of employee recognition. Here the leader (or the colleagues) needs to appreciate specifically what she liked about the employee's work and how it made a difference to the team. One precaution that needs to be taken while praising verbally is that it HAS TO be genuine and authentic. People can spot if you are being bogus.

A growing body of research shows that most of the employees prefer non-cash rewards. In fact, in a study conducted by the Incentive Research Federation, they found that 65% of the employees preferred non-monitory incentives. This makes sense because employees aren't always looking for more ways to earn money. They want to belong, contribute to a bigger purpose, give their best performance and be recognized for their work.

Non-cash incentives, such as recognition, public praise, and flexible work arrangements, can have a more significant emotional impact on employees than cash incentives. Receiving praise is one such experience that truly conveys gratitude and therefore has emotional value and is memorable.

TAKEAWAY - It takes less than 5 minutes to appreciate your employees/colleagues, but your genuine praise will stay in their memory for long. Describe what your employee has achieved and how - even better ask them to describe it in public. It encourages others to understand what behaviors are rewarded and recognized in your company!

"Talented people are attracted to those who care about them." - Adam Grant

Growth Opportunities

Promoting an employee to a higher position can be a powerful way to recognize their hard work - but it is not the only way. A study found that 47% of employees agree that providing growth opportunities was the best way of providing employee recognition.

Finding a tailored growth opportunities for your employees can have various benefits. It helps employees see a clear path for their career advancement in the organisation. By moving up the ranks or acquiring new experiences, employees can gain new skills that can prepare them for future roles. Promoting employees can help with succession planning, ensuring that the organization has a pipeline of qualified candidates for future leadership positions.

TAKEAWAY - Providing employees with growth opportunities is the best way of showing that you value their input and trust them to handle more complex projects. This will not only boost their self esteem, it would also help them enhance their skills.

Peer Recognition

Employees spend most of their time at the workplace interacting with colleagues. Their overall experience of the workplace depends a great deal on how well they get along with their colleagues. Daily interactions with colleagues is a source of belonging and meaning at work for many people.

“Peer-to-peer recognition is the genuine sign of acknowledgment and appreciation between coworkers. That presumes both the manager-to-employee and employee-to-employee interactions.” - Manoj Agarwal

According to one study, 41% of companies that focus on peer-to-peer recognition found that there is an increase in customer satisfaction.

Peer recognition is important because it helps to build a positive work culture and foster stronger relationships among colleagues. When employees feel valued and appreciated, they tend to be more engaged and motivated for their work. In addition, peer recognition can help to boost morale and improve team dynamics.

Peers can provide a different perspective on employee performance and contributions. Since peers work closely with each other on a daily basis, they may be able to identify strengths and areas for improvement that managers may not be aware of.

TAKEAWAY - When employees recognize and appreciate each other's contributions, they are more likely to perform better as a team and support each other's success.

A well-designed recognition program can help organizations retain top talent, increase productivity, and enhance overall job satisfaction. Therefore, it is important for organizations to prioritize employee recognition and regularly evaluate the effectiveness of their recognition programs. By investing in employee recognition, organizations can create a workplace culture that values and supports their employees, leading to greater success and prosperity for all.


You may also want to watch this episode of Growth Hacking Culture with Beth Ridley on Creating a Workplace where People ‘Belong'


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