Before investing in an employee recognition program, it’s important to get a full grasp of how this type of system affects your company. Employee recognition and rewards can significantly affect employee engagement and retention. Ultimately, they play a crucial role in how people feel about their work.
We’ve aggregated key facts on recognition to support these claims. Our research also uncovered some interesting employee recognition benefits for your company’s profitability and overall success.
The Most Important Employee Recognition Statistics in 2024
Employee recognition is a critical aspect of employee engagement and retention. Here are some of the most important employee recognition statistics that highlight its significance in the workplace:
- Lack of recognition is the number one reason why employees leave their jobs. In fact, 66% of employees say they would leave their job if they didn't feel appreciated. Employee recognition may also counter workplace stresses that could otherwise negatively impact employee performance.
- Employees who feel recognized are more engaged at work. According to a Gallup poll, organizations with high employee engagement levels are 21% more profitable.
- Employees who receive recognition are more productive. A study by Globoforce/WorkHuman found that employees who receive regular recognition are five times more likely to feel valued and appreciated, six times more likely to invest in their work, and seven times more likely to stay with their current employer for at least another year.
- Recognition does not have to be a significant outlay. Reportedly, 65% of employees prefer non-monetary incentives over fiscal ones. A simple thank you or a personalized note can go a long way in making employees feel valued and appreciated.
- Peer-to-peer recognition is just as crucial as manager recognition. A survey by Globoforce/Workhuman found that 41% of employees want to be recognized by a peer, and 37% want to be recognized by their managers.
- Lack of recognition is not just a problem for entry-level employees. A study by the Harvard Business Review found that 82% of senior leaders feel they don't receive enough recognition.
- Employees who receive regular recognition are more likely to recommend their company to others. A survey by Officevibe found that 51% of employees who receive regular recognition are highly likely to recommend their company as a great place to work.
- Employees are 18 times more likely to produce great work when they receive recognition for their efforts.
- More than 80% of employees said they work harder when appreciated, and nearly 7 in 10 (69%) stated recognition and rewards keep them loyal to their employers.
These statistics prove that employers who prioritize recognition and implement effective recognition programs are more likely to have happy, engaged, productive, and loyal employees than those who don’t.
If you are interested in learning more about boosting recognition in your company, we recommend consulting our list of meaningful employee recognition ideas.
The Impact of Recognition on Employees' Performance
When implementing an employee recognition program, there is an employee experience component to the decision - employees who are recognized are (as we’ve seen) happier at work. But there is also a strong business case for recognition. Employees who are recognized work harder.
- Research by Oxford University's Saïd Business School found that happy employees are 13% more productive than unhappy workers.
- In addition, 92% of workers are more likely to repeat a specific action after receiving recognition for it.
- Notably, over 40% of American workers feel that if they were recognized more often at their jobs, they would put more energy into their work.
- According to a survey by Gallup, employees who feel recognized are more engaged and productive than those who don't. In fact, employees who feel recognized at work are 2.5 times more likely to be happy with their jobs and 1.5 times more likely to feel motivated to do their best.
- A McKinsey study found that 67% of employees rated praise and commendation as the top motivators for performance, choosing them over performance bonuses and other financial incentives.
Statistics on Employee Recognition and Retention
Employee recognition and employee retention are crucial components of maintaining a healthy and productive workforce. Here are some statistics that highlight the importance of recognizing and retaining employees:
- According to a survey conducted by Achievers, 83% of HR leaders said that recognition programs had a positive impact on employee engagement.
- A Gallup survey found that employees who receive regular recognition and praise are more likely to stay with their current employer than those who do not. In fact, employees who feel unappreciated are twice as likely to quit within the next year and thus have higher levels of absenteeism.
- Another survey conducted by Globoforce found that companies with strong recognition programs are 12 times more likely to have a highly engaged workforce.
- 50% of employees believe that turnover would decrease if managers recognized their efforts more frequently, according to a CareerBuilder survey.
- WorldatWork found that 58% of companies with recognition programs reported increased employee engagement.
- Tower Watson reported that when managers recognize and appreciate their employees‘ performance, they increase employee engagement by 60%.
- A Harvard Business Review survey found that 78% of respondents believed that employee recognition positively impacted employee retention.
In short, companies that implement effective recognition programs are more likely to have a better employee experience and a lower turnover rate, which impacts the bottom line.
Statistics on Employee Recognition and Profitability
There is a significant amount of research indicating that employee recognition has a positive impact on a company's profitability. Firstly because of the effect recognition has on worker productivity, and secondly, the cost of turnover is lowered by retaining employees for longer.
For more information on how recognition affects employee turnover, we recommend reading our feature on employee retention statistics.
Here are some statistics that show the significant effect employee recognition has on profits:
- According to a Gallup study, companies with engaged employees experience 21% higher profitability than those without engaged employees.
- A survey by SHRM (Society for Human Resource Management) found that employee recognition programs have a positive impact on employee engagement, job satisfaction, and retention rates, all of which affect the bottom line.
- The same SHRM survey found that companies with recognition programs report higher productivity and customer satisfaction.
- According to a study by Bersin & Associates, companies that spend 1% or more of their payroll on recognition have a 79% higher success rate in achieving their business goals compared to companies that spend less than 1% of their payroll on recognition.
Employee recognition is a key factor in improving employee engagement, job satisfaction, productivity, retention rates, and, ultimately, a company's profitability. As the studies referenced above show, organizations that are not leveraging an effective program are likely contributing to their financial losses due to employee turnover and lack of engagement.
More Statistics on the Positive Effect of Employee Rewards vs Recognition
There have been numerous studies conducted on the positive effects of employee rewards and recognition on job performance, employee motivation, and job satisfaction. In turn, these are all boosters for improved employee engagement statistics. Here are a few key statistics from these studies:
- According to a 2024 Reward Gateway report, 90% of HR professionals said that an effective recognition program improves business results. 91% also agree that it has a positive effect on retention.
- A study conducted by the Society for Human Resource Management found that 86% of companies with employee recognition programs reported an increase in employee happiness and job satisfaction.
- A study conducted by the Aberdeen Group found that companies with employee recognition programs had a 31% lower voluntary turnover rate than companies without such programs.
- A survey by WorldatWork found that 85% of companies with recognition programs saw a positive impact on employee engagement.
- In a study conducted by the Incentive Research Foundation, it was found that 84% of employees felt more motivated when they received recognition for their work.
Busy leaders may find it challenging to devote time to recognizing individual employees and easier to provide blanket acknowledgment to teams. However, using specific words to recognize employees for their individual contributions provides the most memorable recognition.
Peer-to-Peer Recognition Statistics
When it comes to well-rounded recognition programs, there are many types of employee recognition at play. One of the most essential to nurture is a culture of acknowledging the work of peers.
- Reward Gateway recently published that peer-to-peer recognition is 35.7% more likely to have a positive impact on financial results than manager-only recognition.
- Nectar noted that, based on their research, 40% of employees rate recognition from managers as the most impactful on their performance and employee experience.
- For 33% of employees, the recognition they get from executives is the best.
- For 28% of employees, feedback received from their peers has the most impact on their feelings of acknowledgment.
How U.S. Employee Recognition Statistics Compare to Other Countries
Employee recognition practices can vary greatly between countries and cultures. Here are a few data points and trends:
- A global survey conducted by O.C. Tanner in 2019 found that employees in the United States were more likely to receive recognition for their work than employees in other countries. Specifically, 86% of U.S. employees said they had received recognition for their work in the past year, compared to a global average of 79%.
- Another survey by the Society for Human Resource Management (SHRM) found that employee recognition programs were more common in the United States than in other regions. For example, in North America, 89% of organizations had an employee recognition program, compared to 68% in Asia and 65% in Europe.
- However, while employee recognition may be more prevalent in the United States, it may not always be effective. A study by Gallup found that only 33% of U.S. workers feel engaged at work. Given the correlation between employee recognition and employee engagement, this suggests that recognition programs may not be reaching or resonating with all employees.
- According to another 2023 Gallup survey of 9,000 remote-capable U.S. workers, only 28% of remote workers feel connected to their company's mission, a 4% decrease from the previous year.
- In some countries, employee recognition may take on different forms or have different cultural meanings. For example, in Japan, the practice of "mochi-age" involves recognizing and rewarding employees who have reached certain milestones or achievements. In Latin American cultures, recognition may be more informal and personal, with coworkers and managers expressing gratitude or offering small appreciation gifts or gestures.
Overall, while U.S. employee recognition statistics may be higher than in other countries, it is important to consider the effectiveness and cultural appropriateness of recognition practices in any given context when starting an employee recognition program.
Employee Recognition Program Statistics
Employee recognition programs can have a positive impact on employee morale, productivity, and retention. Here are some statistics related to employee recognition programs:
- A study by the Society for Human Resource Management (SHRM) found that organizations with employee recognition programs have a lower employee turnover rate than those without such programs.
- According to a survey conducted by Globoforce, 89% of employees who were recognized for their hard work reported higher job satisfaction.
- A study by WorldatWork found that 88% of organizations have an employee recognition program, with the majority of those programs being informal, such as positive feedback by team members.
- A study by the Harvard Business Review found that employee appreciation and recognition programs that are tied to company values are more effective than programs that are not.
Despite the proven benefit, O.C. Tanner reports that 37% of employees say they have never received recognition from their employer. Perhaps this is because leaders are reluctant to put resources aside for the sole purpose of recognition.
Is Employee Recognition Cost-Effective?
The cost of an employee recognition program is highly dependent on what it entails. While some employers spend high amounts on lavish employee appreciation gifts, others simply incorporate an opportunity to give praise in their daily operations.
It also doesn’t have to be overly complex. According to O.C. Tanner adopting a simple recognition program that congratulates employees on their work anniversaries can increase the average employee tenure at an organization by 2 years.
The ROI of employee recognition is multifaceted:
- Employees stay longer, which reduces turnover costs.
- Employees are more productive, which increases yield.
- Employees are more engaged - a benefit linked to both productivity and retention.
- Employees are more brand loyal.
Zooming out of your current workforce for a second, employees who feel recognized for their work would logically more readily refer friends when there is a vacancy. They would also be more likely to say positive things about their employee experience on social media and rating sites (like Glassdoor). Therefore, investing in employee recognition is a means of investing in your employer's brand.
Want to acknowledge your best employees, but not sure how? Our list of innovative employee reward titles is a great place to start.
Statistics on the Employee Recognition Initiatives That Employees Want
When deciding how your organization should approach employee recognition and rewards, it's important to take into account what your particular workforce would find most compelling and appealing. Here's a sampling of what form of recognition employees report as being most important to them.
- According to a survey by Achievers, 63% of employees do not feel recognized at work, and 39% of employees don't feel appreciated at all. Simply acknowledging appreciation for hard work is already a huge step toward improving these numbers.
- In fact, a study by SHRM found that recognition is the third most important factor in employee satisfaction, after job security and compensation.
- In a survey by Globoforce, 89% of HR leaders agreed that ongoing peer feedback and check-ins are key for successful outcomes.
- In a survey by TINYpulse, 77% of employees stated that they would work harder if they felt better recognized.
- A survey by WorldatWork found that verbal praise (72%), certificates or plaques (44%), and cash (36%) are the most popular forms of employee recognition.
Statistics on What Happens When Employee Recognition Is Lacking
Research has shown that when employee recognition is lacking, there can be various negative consequences for both the employee and the organization. Here are some statistics that highlight the impact of a lack of employee recognition:
- Decreased job satisfaction: According to a survey conducted by the staffing firm, OfficeTeam, 66% of employees would quit their job if they felt unappreciated. This highlights the importance of employee recognition in maintaining job satisfaction.
- Increased turnover: The same survey found that 51% of employees would leave their job if they did not feel appreciated.
- Decreased productivity: A Gallup poll found that only 1 in 3 employees in the United States strongly agree that they have received recognition or praise for doing good work in the past seven days. This lack of recognition can lead to decreased motivation and productivity.
- Increased workplace stress: A lack of recognition can contribute to increased stress and burnout in employees. A study by the Society for Human Resource Management found that employees who do not feel valued are twice as likely to say they are experiencing high levels of stress.
In Conclusion
The statistics above highlight the importance of employee engagement for organizational success and the need for companies to prioritize strategies that foster engagement among their employees.
Although some business leaders may find it challenging to set aside the time and energy necessary to build an effective and sustainable employee engagement strategy, the possible return on investment in terms of reduced turnover, increased efficiency, high morale, and increased engagement, make investing in an employee engagement and recognition program a must for any growing business.
Business leaders who are ready to go “all in” in developing their employee recognition program should take care to truly understand the needs and wants of their employee base before launching the program and taking into account cultural and generational norms. For international organizations, this should take into account differing views on private versus public recognition, and which virtual rewards will be most effective.
References:
- Gallup “Employee Engagement Solutions” Accessed on March 13, 2023
- WorkHuman SHRM/Globoforce “Growing Impact of Recognition Programs on Performance Management” Accessed on March 13, 2023
- Harvard Business Review “Recognizing Employees Is the Simplest Way to Improve Morale” Accessed on March 13, 2023
- OC Tanner “Employee Appreciation” and “How To Measure the ROI of Employee Recognition”, Accessed on March 13, 2023
- Cision PR Newswire “The State of Employee Recognition in 2012” Accessed March 13, 2023
- WorldatWork “TRENDS IN EMPLOYEE RECOGNITION” Accessed March 13, 2023
- Incentive Research Foundation “The Value And ROI Of Employee Recognition” Accessed on March 13, 2023
- Gallup “The Benefits of Employee Engagement” Accessed on March 13, 2023
- Oxford University
