The Psychological Importance of Recognition in the Workplace


As humans, we crave recognition for a job well done. The satisfaction one feels when an incentive check hits or a bonus trip is awarded is nearly unparalleled. It’s pretty clear that tangible rewards feel good in the moment, but there are long-term benefits to recognition. Positive reinforcement has been repeatedly linked to higher productivity and employee engagement. In general, positive reinforcement works by triggering the release of dopamine in the brain, generating feelings of pride and pleasure. In essence, we instinctively work harder because we’re chasing that next dopamine hit. Today, we’ll look closer at the psychology of recognition and the impact it can have on a workplace.

Why recognition matters

To better understand the mechanics behind the psychological need for recognition, think back to Maslow’s Hierarchy of Needs, which held that humans have five basic needs: physiological, safety, love and belonging, esteem, and self-actualization. While the foundation of this hierarchy still stands, the modern understanding is that basic needs like safety exist in concert with “higher order” needs, including recognition.

As mentioned earlier, recognition generates feelings of pride in oneself and the work they produce, but it also encourages buy-in. And fostering this type of connectivity can have demonstrable results on the business.

A Gallup survey from 2022 found that “highly engaged business units realize an 81% difference in absenteeism and a 14% difference in productivity,” but that this is only possible where management is held accountable for employee engagement. Fostering a culture of engagement starts at the top, and should be reinforced at every level.

Additionally, as Forbes reports, organizations with more engaged employees experience fewer safety-related incidents and less absenteeism and turnover — all of which can have a tremendous influence on organizational success. Further, workers who feel psychologically fulfilled and recognized are more apt to think innovatively and go above and beyond, according to an exhaustive survey of 1.7 million employees.

During economic uncertainty, innovation suffers as firms cut costs and reduce project team sizes. A focus on engagement is one way to improve employees’ morale while ensuring that business goals are met. In real terms, this translates to allowing team members to make suggestions and explore individual competencies. Employees closest to clients, projects, and active business processes have the clearest insight into potential inefficiencies. These built-in engagement opportunities are a boon for the organization and its employees. They support the bottom line and create the perfect chance to reward an employee for going above and beyond.

Maintaining recognition standards in remote settings

For a lot of companies that transitioned to remote work, certain aspects of operations became more challenging. One ongoing challenge facing executives is the ability to satisfy the psychological needs of employees without face time.

Throughout the pandemic, remote workers often reported experiencing mental health woes due to related factors like isolation and loneliness. To combat those feelings, many employers added additional mental health care resources and benefits and became more transparent in talking about the importance of mental health — practices that many employers have kept in place.

Though employers may find it more challenging to satisfy the psychological needs of remote workers, it’s certainly possible. In an article on behavioral biases that trip up remote managers, Harvard Business Review touched on several tips for leaders to counteract physical distance, including actively checking in on the well-being of teammates.

It’s important to note that recognition doesn’t always have to be effusive praise. Many employees simply want to be recognized with a seat at the table — whether that seat is virtual or in person. Acknowledging employees and giving them the opportunity to share their own insights is another way to ensure employees feel connected and engaged. This can be done through one-on-one meetings or in a group setting, depending on your specific situation.

Power to the people

Peer recognition is another important, although oft-forgotten, means of rewarding coworkers. These programs empower employees to nominate their cohorts for awards or recognition, which can help to satisfy the psychological need of both the nominator and the nominated.

Peer recognition has also been shown to build trust among teams and release oxytocin in the brain. As we mentioned above, dopamine facilitates feelings of reward and motivation. In contrast, oxytocin (the “love hormone”) helps create deeply bonded relationships. Interestingly, Harvard Business Review adds, “The neuroscience shows that recognition has the largest effect on trust when it occurs immediately after a goal has been met, when it comes from peers, and when it’s tangible, unexpected, personal, and public.”

For that reason and others — like how peer recognition can build self-esteem and confidence, resulting in a more competent workforce — companies struggling to foster internal connections would be wise to consider instituting peer recognition programs.

EGR International improves sales force effectiveness through employee engagement

Evolving your team’s performance requires more than just haphazardly doling out awards-based incentives. Doing so takes finesse and a comprehensive approach to psychological satisfaction, which is exactly what EGR International can do for your business. We build custom campaigns featuring tactics like web-based engagement portals with integrated LMS modules, continuity programs, channel motivation strategies, merchandise and gift card programs, and more to take the effectiveness of our clients’ teams to the next level. To learn more, reach out to us today.

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