Benefits of Employee Recognition — and 12 Affordable Options

Did you know that employee recognition can be one of the best forms of retention? And if you're concerned about losing top talent, a little recognition can go a long way. Both employees and your business can reap numerous rewards.

In some ways, you might see employee recognition programs as feel-good measures, but the benefits of recognition go beyond simply inspiring goodwill. Letting employees know that you value their contributions also increases productivity and innovative thinking.

In fact, employee recognition can be thought of in terms of a positive feedback loop. The formula is both easy to remember and easy to put into practice: Employee recognition equals employee productivity equals management gratitude.

While the three elements of this simple yet profoundly rewarding feedback loop are synergistically related, employee recognition is a distinct, proactive step management can take to promote a success-oriented mindset across all facets of the operation.

The more employees know that their efforts are appreciated by management and the company as a whole, the more they'll strive to do great work. In the final analysis, employee recognition benefits both the staff and the business itself in several ways:

Benefits of employee recognition for workers

  • Greater motivation: Employees who know they stand to be rewarded for outstanding performance approach their jobs with greater enthusiasm and creativity. The opposite is unfortunately true: Not being appreciated is commonly cited by departing employees as a reason for moving on to a business where they feel their efforts are more likely to be recognized.
  • Peer acknowledgement: Chances are, employees who get word of a coworker’s achievement will take the time to offer their own congratulations. It’s hard to image an employee who wouldn’t welcome the acknowledgement.
  • Empowerment and inclusion: Employee recognition programs can make staff members feel more connected to the company rather than just the recipient of a regular paycheck. That moves loyalty beyond just a financial appeal.

Benefits of employee recognition for the business

  • Reinforcing positive behavior: If employees excel, others will notice. That can help others raise their performance in hopes of being recognized as well.
  • Lowering stress levels: If the emphasis is on the positive rather than an overriding concern about snafus, employees are likely to feel less overwhelmed about their job responsibilities.
  • Increasing customer retention: Higher employee motivation levels typically carry over to satisfied customers and clients. Those you do business with inevitably notice employees who bring a commitment and enthusiasm to what they do. Unfortunately, a disgruntled or frustrated employee can stand out to customers just as much.

Low-cost employee recognition ideas

Now that we’ve reviewed some of the benefits of employee recognition programs, let’s look at some options. Not every employee recognition award has to be pricey. Here are 12 budget-conscious alternatives:

  • Time off or extra vacation days
  • A note or letter of appreciation from the company president
  • Dinner at a local restaurant (or a “lunch on me” coupon)
  • A designated employee-of-the-month parking spot
  • Tickets to the movies or a sporting or cultural event
  • A photo and brief article in the company newsletter
  • Special recognition at a company meeting
  • A department picnic to celebrate a team achievement
  • Token of appreciation (T-shirt, tech gadget, etc.) with the company logo
  • Decorating the employee’s office or cube with balloons or “Great job!” signs
  • Coffee gift cards
  • And of course food, like bagels, cupcakes or cookies always work, too!

One simple thing that many managers may overlook is the thank-you. So often, all it takes is a heartfelt, “Thank you. You did an outstanding job on that project, and I really appreciate your help!” An email or in-person thank-you doesn’t cost anything. Think about it. If you spend 30 seconds to write a thank-you email or note, wouldn’t it go a long way toward making your employee feel appreciated and work that much harder the next time around?

Get more staff appreciation ideas by downloading our free tip sheet 20 Easy Ways to Rock at Employee Recognition.


Get More Employee Recognition Ideas