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Why Is Employee Reward and Recognition Important?

The present-day business environment is becoming increasingly automated and tech-driven. However, even this rapid tech evolution can’t change the fact that at the core of every successful company lays the highly motivated and productive workforce. Tech assets can help your employees score stronger results and attain a higher level of efficiency but they can’t substitute human productivity, ingenuity, and hard work.

Also, we would like to point out the recent research saying that happy and content workers are able to work harder and produce results 12% higher than their peers. This is yet another area that can't be augmented by tech and requires careful management and a lot of time and effort spent on creating a satisfying and productive work environment.

Let us take a look at why employee reward and recognition are some of the most important resources you can use to meet these goals.

What are the benefits of employee reward and recognition?

All humans like to be recognized for the effort they are putting out at work. More than any tangible benefit or reward, this sense of personal accomplishment and being part of the functional, transparent, and fair collective can go a long way in making your workers reach a higher level of empowerment and personal accomplishment.

Therefore, the rewards and recognitions are not, by themselves, a goal you should strive toward but more the assets you should use to meet the goals we have listed above.

That being said, these assets do produce very tangible benefits critical for the success of one company:

  • Increased motivation

  • Tangible demonstration of appreciation

  • Foundations for friendly peer-to-peer completion

  • Higher level of productivity

  • Higher level of employee retention

  • A building block for a positive workplace

The difference between rewards and recognitions

Everything we have said above doesn’t mean the rewards and recognitions can be used indiscriminately – doing that will dilute their results and make them ineffective in the long run. So, in order to use them in the most effective manner, we first need to understand the difference between these assents and the results they produce.


The employee rewards are transactional, tangible, and have some finite shape or form. They can come in the form of workplace benefits like extra days off or in the form of goods that can be consumed or passed to other persons like, for instance, rewards credit cards. If they are supposed to produce desired results they should also be fixed, impersonal, and conditional, or in other words, based on certain terms. Employees need to be aware of these terms and always know what forms of behavior will lead them to the benefits they desire. They should encourage desired actions and be applicable to the scale of the entire company.


Unlike rewards that hold some real-life value, recognitions are invisible in nature but priceless in terms of employee engagement. Therefore, they are relational, experienced, emotional, and spontaneous. Tying them too closely to some tangible goal would make little sense since, by default, the workers won't feel inclined to put out stronger performance to be commended. However, if these recognitions come unexpectedly once the labor is performed they can produce incredibly potent results. They should support desired behaviors and be used on a personal level.

Structured vs. unstructured

This short breakdown indicates that rewards provide the strongest results when they are structured and triggered by the expected employee behaviors while recognitions work the best when they come out of the blue. However, in order to produce the desired results, both these assets need to be structured and used at specific times after specific actions. Trying to make workers feel worthy by commending the behaviors that hold no real value can only make this action meaningless.

So, both these assets need to be made a part of the overall employee engagement program and tailored around the needs of every employee where rewards will push the workers in the right direction and recognition will help them get to the finish line faster.

But, that doesn’t mean the rewards can’t sometimes be spontaneous. Exceeding expectations and pushing personal abilities to the limit more than warrants some form of unexpected reward or perk.

The timing is everything

Last but not least, we would like to round up everything we have covered by now by saying that, unless they are made a part of some long-term reward strategy made clear to all employees (e.g., getting bonuses for the annual performance), the rewards and recognitions produce the desirable effects only when they are immediate.

Of course, in some cases, the companies won't be able to deliver the reward the same moment some of the employees earn access to it. But, in that cases, the managers should leverage the power of praise and make sure all fruitful efforts are publically recognized. Waiting too long to deliver any of these assets can only diminish their results.

In conclusion

We hope these couple of considerations presented you with some of the key benefits you can get by leveraging rewards and recognition as well as providing some strategies to use these assets effectively. When all is said and done, even if we have the best possible infrastructure in the world, the success of our companies will depend on the engagement and efficiency of their employees. Using rewards and recognitions won’t magically solve this problem but it presents a good starting point for drastically improving their engagement.



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