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15 Recognition & Rewards Statistics that People Leaders Should Know in 2022

Recognition and rewards have an outsized impact at work. Most people can remember at least one piece of workplace recognition or gift that made a huge difference in their professional (or personal) life.

Successful organizations foster company cultures that enable the same kind of appreciation. They know that In order to attract and retain top talent, it’s necessary to create a workplace culture that truly recognizes and rewards employees for their hard work.

Unfortunately, many organizations still don’t have effective recognition and rewards programs in place. If you’re looking to level up your organization’s recognition and rewards, read on for insight into why these elements are so critical for modern teams.

Let’s start with what each of these terms mean:

  • Employee Recognition is any type of verbal or written expression of appreciation for an employee’s work
  • Employee Rewards are tangible ways of showing employees appreciation, usually in the form of gifts or experiences

And now for the stats!

Recognition & Rewards Statistics

Companies with strong recognition cultures have 31% lower voluntary turnover rates than their peers

People want to be appreciated at work, and teams with a rich recognition culture have verifiably higher retention. That's striking, especially in today's competitive job market!

Employee recognition helps individuals connect their work to the impact they make. When that connection is made and they feel appreciated, they're more likely to stay at their job. Companies that don't have high turnover rates tend to have more robust recognition programs. It might seem simple, but making sure employees feel appreciated can have a big impact on retaining top talent.

two sets of hands clapping

Recognition is the most-cited motivator for producing great work, identified by 37% of employees

What gets you out of bed in the morning when it comes to work? More than a third of employees believe recognition is the most important motivator for performance. Employees want to feel like their work is valuable, and reinforcing motivation through recognition is very effective.

Organizations that focus on recognition are more likely to have engaged employees who feel motivated to do their best work. If you want to get the most out of your team, invest in recognition.

Peer recognition programs are more effective than top-down ones

Allowing any employee to give and receive recognition has major benefits. HR teams identify peer recognition programs as positive more often than programs where only managers and leadership give recognition.

When people feel appreciated by their peers, it reinforces the idea that their work is valued. It also creates a feedback loop of positivity and appreciation that can boost morale and motivation company-wide.

Only 40% of employees report receiving recognition only a few times a year or less

Two out of every five employees receives recognition on a quarterly or annual basis. That’s simply not enough. Frequent recognition is key to maintaining a healthy workplace culture, so just feeling appreciated around performance review season won’t cut it.

It’s easy to see how this could become a problem. Recognition received infrequently, limited to formal milestones can feel contrived or inauthentic. Organizations need to show employees they’re valued. The best way to do this is by making recognition frequent and timely.

84% of highly engaged employees were recognized the last time they went above and beyond at work

When was the last time you were recognized for going the extra mile? 84% of highly engaged employees were recognized the last time they went above and beyond at work compared to only 25% of actively disengaged employees. When employees feel appreciated, they're more likely to be engaged in their work. That's an especially important statistic to remember next time the team talks about engagement!

person holding a loudspeaker and pompom in front of a group

36% of employees say their organization has a recognition program

Slightly more than a third of workers are aware of a recognition program at their company. When employees either can't access or don't know about a recognition program at their organization, the signal is clear. Recognition isn't a priority. Is it reasonable to expect employees to feel appreciated if there's no initiative to facilitate recognition?

What’s more, just 22% of employees say their organization uses a digital recognition platform or software. While those numbers are disappointing, it also means there’s plenty of opportunity to improve.

70% of workers believe that morale would increase “massively” with managers saying thank you more

It shouldn’t be hard to say thanks. Seven out of every ten workers say that motivation and morale would increase substantially if leaders expressed appreciation. Making a big impact doesn't have to be complicated - sometimes, a simple thank you can make a big difference. As people leaders, it’s important to find ways to facilitate these interactions, even if they seem small.

73% of team leaders receive no training around employee recognition

Recognition should be a pillar of company culture. However, around three fourths of all team leaders say their organization doesn’t offer them best‑practices training for employee recognition. That’s a recipe for a disengaged workforce.

When team leaders aren’t equipped with the training they need to properly recognize their employees, it can have a big impact on morale and motivation. If you want your organization to have a healthy recognition culture, make sure team leaders are properly trained in how to give recognition.

Top reward preferences are gift cards and experiences

No one employee prefers the same kind of reward, so it’s important to offer an inclusive mix of rewards for employees to choose from. That said, the most popular choices are gift cards (44%) and experiences (41%). It might seem counterintuitive, but gift cards are just as effective as experiences when it comes to rewards.

wrapped gifts with balloons

There’s a negative correlation between a cash reward and salary

Put another way, the more an employee makes, the less important cash rewards are. Here’s where things get more nuanced - when employees receive a good salary, intrinsic rewards become more important. However, extrinsic rewards are still necessary. To maximize the impact of any tangible reward, experts agree that it’s critical to pair it with specific recognition. Companies that connect recognition with rewards see higher program engagement than companies that rely solely on recognition.

Successful companies usually spend 1% of payroll or more on recognition and rewards programs

HR teams are more likely to believe their recognition and rewards programs are effective when their company invests at least 1% of payroll in the program. Budgeting for recognition and rewards may seem like a daunting task, but it's well worth it to keep your best employees and engage your team.

79% of employees said an increase in rewards would make them more loyal

Nearly four out of every five workers believe an increase in rewards would make them more loyal to their employer. With unemployment rates still very low, teams can't afford to lose key members. Rewards can be a key way to build a dedicated team. Consider offering innovative employee rewards to keep teams extra engaged. 

three people holding hands high

Foster thoughtful recognition and rewards

Employee recognition and rewards are essential elements of the employee experience. However, many organizations fail at making them pillars of their team's culture. Fortunately, there's plenty of research to guide your efforts, and you can leverage that same research to make a positive impact on your organization.

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Ben Travis

Ben is the founder of HR Chief. He enjoys working with passionate teams to solve impactful problems with technology.

He has a heart for HR/People Ops teams and uses his experience from the startup, agency, and nonprofit spaces to drive results.