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36 Statistics on Employee Recognition and Motivation [2022]

We all know that employee engagement is how companies recruit, retain and get the most out of their workers. But how do you create an engaging culture in your business? What really works when it comes to motivating your staff?

The latest statistics show that the key to an engaged workforce comes from recognition.

That recognition can come in different forms and from different people, but data indicates that how valued your employees feel plays a hugely significant role in their engagement and performance.

But many organisations are failing to tap into this simple way to improve productivity.

If you or your organisation is looking for proof that performance management reward and recognition really works, we’ve got the statistics you need to make your case.

In this article, we’ll show you statistics on:

  • How recognition and rewards affect motivation
  • The ROI of employee recognition
    • Reduced staff turnover
    • Improved performance
  • How employers are failing to harness the power of recognition
  • The best ways to recognise and reward staff
  • How recognition varies between different groups
  • The impact of failing to invest in recognition

Once you’ve seen the facts and figures, you’ll understand exactly why rewarding, recognising and appreciating your employees creates a more productive, more profitable and happier workplace.

And can make you more money too!

 

How does recognition motivate employees?

Employee engagement is a hugely significant tool for modern businesses. Its effect on your workers’ happiness has been shown to improve motivation and performance, and also to significantly reduce staff turnover. 

Here are some key statistics that show how recognition is the greatest motivator for your workforce.

 

Companies with a highly engaged workforce are 21% more profitable

Source – Gallup

Having an engaged workforce pays actual dividends! Research shows that companies with a highly engaged workforce actually make significantly higher profits. So a failure to give your staff an environment where they feel part of the team could actually be having a detrimental financial impact on your business.

 

72% say recognition for performance has a significant impact on employee engagement

Source – Harvard Business Review

It’s clear that employee engagement and recognition go hand in hand, with the vast majority of workers stating that being recognised for their performance has a significant impact on their level of engagement.

 

Employees are 2.7 times more likely to be highly engaged if they believe they will be recognised for their contribution

Source – Quantum Workplace

Recognising employees needs to be more than a one-off event, or a box-ticking exercise. Your workforce needs to buy into the process, and believe that their good work will be rewarded. When they do, they’re almost three times as likely to be a highly engaged, motivated team member.

 

Employee engagement, productivity and performance are 14% higher in organisations with a recognition programme

Source – Deloitte

Companies that have a recognition programme in place have higher levels of engagement. However the same research notes that recognition programmes often miss the mark by focusing on narrow parameters, like tenure, rather than having an inbuilt culture of regular rewards for good performance.  

 

79% of workers say an increase in recognition rewards would make them more loyal to their employer

Source – SHRM

Recognition goes both ways, and where an organisation recognises employees, those employees are more likely to appreciate and value the business they’re part of.

 

53% of employees feel that recognition or celebrations strongly represent their company’s culture

Source – Quantum Workplace

Company events, awards and recognition all help employees feel that they’re part of a strong organisational culture.

 

Nearly 60% of employees would prefer regular praise and thanks over a 10% pay increase with no recognition 

Source – Reward Gateway

While many businesses imagine that financial rewards are the ultimate motivator, nearly three in five of employees would rather work for a company with a culture of employee performance recognition, than for a company that paid 10% more but offered no acknowledgement, praise or thanks.

 

The ROI of employee recognition

The impact of rewards and recognition goes a lot further than just motivated staff too. Many businesses notice a tangible benefit when they invest in recognition, from a reduction in the cost of staff turnover, to a rise in profits.

 

Recognition reduces staff turnover

69% of employees say recognition and rewards would keep them in their current job

Source – Achievers

 

53% of workers say they would stay longer in a company if they feel appreciated

Source – Glassdoor

 

63% of employees who feel recognised are unlikely to look for a new job

Source – SurveyMonkey

 

A culture of recognition can save a company with around 10,000 staff members up to $16.1 million each year in turnover costs

Source – workhuman

 

From these statistics it’s clear that a well-recognised team is much happier with their role and their organisation, and far less likely to look for other work. This can have a direct impact on your bottom line as an employer, keeping down the cost of finding, hiring and training new staff.

 

Impact of rewards and recognition on employee performance

Happy workers are 13% more productive than unhappy workers

Source – Zippia

 

92% of workers are more likely to repeat an action they’ve received recognition for

Source – Springworks

 

Of the organisations that spend 1% or more of payroll on recognition, 85% notice an increase in employee engagement

Source – SHRM-Globoforce

 

A good recognition program can help drive an 11.1% average increase in team performance 

Source – Gartner

 

81% of employees would work harder if they felt more appreciated

Source – Glassdoor

 

Companies that double the number of workers they recognise each week can expect to see a 24% improvement in work quality, a 27% reduction in absenteeism and a 10% reduction in staff shrinkage

Source – Gallup

 

Improving recognition by 15% can increase a company’s margins by 2%

Source – Deloitte

 

40% of demotivated employees put it down to a lack of recognition

Source – Reward Gateway

 

All the data indicates that workers who feel appreciated and recognised work harder, are more productive and are more engaged too. When someone is praised for a specific action or for work well done, they’re much more likely to replicate that effort.

 

How employers are failing to harness the power of recognition

While recognition is clearly a big motivating factor for employee performance and engagement, there’s still a lot of organisations that are yet to embrace it. 

On top of that, in many companies there’s a gap between how often managers think they’re providing recognition, and how often workers report receiving it.

 

62% of employees say they hardly ever or never receive recognition

Source – Employee Benefits

Most workers don’t feel like they’re regularly recognised. While it’s easy to dismiss this as perhaps being down to poor performance, the fact that recognition itself has such a positive impact on motivation and engagement means that managers are often better off finding reasons to give positive recognition, rather than saving it only for exceptional efforts.

 

29% of employees haven’t received recognition for good work in over a year

Source – Zippia

When your good work doesn’t get noticed, it can be difficult to find the motivation to maintain your efforts.

 

Managers are twice as likely to think they’re recognising achievements as workers

Source – EBN

While more than 80% of managers think that they are providing their team with recognition for good work, only around 40% of employees agree. This shows a big gap in perceptions when it comes to rewarding staff.

 

22% of senior decision-makers don’t think that regular recognition and thanks influences staff retention

Source – EBN

Worse still, the same survey found that managers didn’t see the value in regular recognition and appreciation of employees’ work. 

When managers don’t buy into recognition as a serious motivator for their team, they miss out on opportunities to boost performance with very little effort. 

 

What is the best way to recognise staff?

You might be surprised to discover that a huge number of workers don’t expect rewards of gifts or cash, but actually value recognition in the simple form of praise, or a thank you for a job well done.

Statistics also indicate that recognition from team members and peers can often be as rewarding as praise from supervisors or managers.

It’s also significant that workers prefer recognition to be spontaneous, authentic and based on performance, rather than automatically granted for things like years of service.

 

32% of employees prefer to receive affirmation over gifts or money

Source – Bonusly

While 33% of employees prefer recognition to come in the form of gifts, nearly as many prefer to have their good work acknowledged. This surprising statistic shows just how significant recognition is, and that it doesn’t need to come in the form of tangible benefits to boost morale and engagement.

 

 

Nearly half of employees said a “thank you” would make them feel more valued

Source – Employee Benefits

48% of workers feel that a simple thank you for their contribution would make them feel appreciated. A small act of recognition costs nothing in time or effort, and clearly makes a big impact on how people feel about their work and their employer.

 

87% of employee recognition programs focus on employee tenure

Source – Forbes

Whilst it’s great to reward your staff for their commitment to your organisation, the fact that the overwhelming majority of reward programs focus on tenure rather than performance is actually rather counterproductive. 

Imagine being in a workplace where someone who doesn’t perform well gets recognition simply for showing up. But where staff who go the extra mile, or consistently perform well aren’t seen or recognised.

That’s the sort of reward program that can actually demotivate your team!

 

Peer-to-peer recognition is 35.7% more likely to have a positive impact on performance than manager-only recognition

Source – People Matters

Employee acknowledgement doesn’t need to come directly from managers or supervisors. In fact, receiving recognition from colleagues can be hugely motivating. 

 

28% of people prefer recognition to come from their direct manager

Source – Zippia

While employee happiness can be greatly improved by recognising colleagues, a large percentage of workers still like to receive acknowledgement from their actual manager or supervisor. 

 

47% of employees want to receive a spontaneous, personalised reward

Source – Springworks

Authenticity really makes a difference when it comes to recognition and engagement. Workers need to feel like rewards are genuinely earned, rather than given automatically.

 

Organisations can provide a more effective employee recognition and engagement programme by focusing on performance

Source – Benefit News

Glenn Elliott, CEO of Reward Gateway says: “On average, businesses spend 2% on recognition. Businesses can increase effects of recognition by moving money from tenure-based to valued- and behaviour-based recognition.”

 

How recognition differs for different demographics

When it comes to recognition at work, people’s average experiences and needs are very different depending on their gender and their generation too. 

Employee recognition statistics show that women are less likely to be acknowledged for good performance, and prefer different types of reward to men.

Younger generations also prefer a different style of affirmation, with Millennials and Generation Z workers focused more on peer-to-peer recognition, rather than rewards from managers.

 

Gender gap of 7% in regular recognition

Source – Bamboo HR

While 50% of men say they receive recognition a few times a month or more, only 43% of women say the same. 

 

Men prefer public acknowledgement, women prefer non-public rewards

Source – Bamboo HR

Men and women prefer to receive recognition in different ways, with 36% men preferring a public reward (company-wide email), whilst 76% of women prefer an unpublicised bonus.

 

Younger generations are more motivated by recognition from colleagues

Source – People Matters

Gen X and Millennials place a high value on their relationships with colleagues, with 23.3% more of their workplace happiness deriving from their connections with their fellow employees. As such they are much more likely to be motivated by recognition from their team.

 

Impact of failing to recognise your staff

While the data clearly shows the impact of reward and recognition on job satisfaction and motivation, many companies still fail to put measures in place to make recognition part of their organisational culture.

 

Nearly two in three leaders say their organisation does not have a budget allocated to recognition

Source – Workhuman

On top of this, the same research indicated that 81% of business leaders do not feel that recognition is a major priority for their organisation.

 

In the USA, up to $600 billion in productivity is lost each year due to “actively disengaged” workers

Source – Gallup

Lack of engagement has a real impact on an organisation’s bottom line, through unproductive workers and high staff turnover.

 

Statistics show rewards and recognition are the way to motivate employees

From all the data we’ve discovered, it’s clear that rewards and recognition are the key to creating a loyal, motivated and productive workforce. And it keeps people happier in their jobs too! 

Even the smallest recognition, like a thank you for a job well done, can make a positive impact, so rewarding your workers doesn’t have to be in the form of expensive perks.

What your team really wants is to receive recognition that is:

  • Regular
  • Genuine
  • For good performance, rather than service or tenure
  • From a direct manager, or a colleague

Awards events can be a brilliant way to provide your team with the recognition they deserve, and enable you to reward staff from all across the organisation all at once.

They also give people the opportunity to mix and mingle with different departments, and to relax and have a good time too!

While big awards ceremonies can be a great way to honour employees for outstanding achievements or performance, don’t forget that it’s worthwhile to provide recognition on an ongoing, regular basis.

Lots of companies have employee of the month awards as a way to highlight workers who’ve made a special contribution. 

But considering that one of the most motivating factors behind an award is the feeling that it has been genuinely awarded for good work, rather than as a formality, it can be a great idea to focus on specific achievements.

For example, making a special effort on a project to meet a deadline, finding an innovative solution, or dealing with a particularly difficult scenario (or client!). 

And remember it’s not all about money and gifts either! A simple thank you can make a big difference, as can an award or medal to show your appreciation.

If you’re looking for an innovative way to reward your employees, or have an employee appreciation event upcoming, EFX can provide you with bespoke awards, trophies, medals and more to show your team what a great job they’ve done.

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Looking for a unique award? EFX can create an incredible bespoke award that’s perfect for you. Just fill out our simple quote form to get started.

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