Employee recognition: The guide to building a positive workplace culture

Did you know that more than half of U.S. employees (55%) either don’t receive workplace recognition or feel that the recognition they do receive is inadequate? This startling statistic from Gallup reveals a critical gap in workplace culture—one that directly impacts employee engagement and retention. Without recognition, employees are more likely to feel undervalued, disconnected, and disengaged, increasing the risk of turnover and diminishing overall morale.

But here’s the opportunity: when employees feel appreciated, they’re more motivated, loyal, and invested in their work. Recognition becomes a powerful tool to improve morale, drive performance, and foster a thriving workplace.

In this guide, we’ll show you how to leverage employee recognition to transform your workplace into a hub of engagement, collaboration, and success. Whether starting from scratch or refining an existing program, the insights here will help you create a culture where recognition fuels employee satisfaction and business growth.

What is employee recognition?

Employee recognition is the practice of acknowledging and celebrating employees’ contributions, achievements, and efforts—big or small. At its core, it’s about making employees feel valued, whether they’ve completed a challenging project, supported their teammates, or gone above and beyond their daily responsibilities.

When a successful recognition program goes beyond transactional rewards to heartfelt appreciation, it transforms the workplace. Team members who feel appreciated and seen are more engaged, motivated, and connected to their organization’s mission. By prioritizing recognition, companies can foster a stronger sense of belonging, improve morale, and drive better retention—creating a workplace where people want to thrive.

Why is employee recognition that important?

Employee recognition has never been more vital in the current labor market, where voluntary quits and disengagement rates remain alarmingly high. The U.S. Bureau of Labor Statistics reported a quits rate of 1.9% in September 2024, with 36 states meeting or exceeding this average. Meanwhile, Gallup data shows that only 33% of U.S. employees are engaged in their work—a significant gap that puts businesses at risk of losing talent and revenue. These challenges underscore the importance of effective employee programs in fostering engagement and retention.

To stay competitive in a tight job market, organizations must prioritize employee appreciation. Recognition strategies not only boost morale but also strengthen company culture and lower turnover rates. By valuing and acknowledging employees’ contributions, companies can build a positive work environment that encourages loyalty, productivity, and long-term success.

Some additional facts on why companies should have an employee recognition program in place:

• Enhanced employee engagement: Research indicates that employees who receive adequate recognition are three times more likely to be engaged at work.
• Increased productivity: Forbes reports that companies with effective recognition programs experience a 31% increase in productivity. 
• Improved employee retention: Gallup News found that employees who feel inadequately recognized are three times more likely to consider quitting within the next year.
• Higher profitability: Organizations with highly engaged employees, fostered through recognition, are 21% more profitable.

6 key benefits of employee recognition

A well-designed employee recognition program doesn’t need to break the bank to deliver significant results. In fact, recognizing and rewarding employees can transform your workforce, creating a more engaged and productive team. But beyond the obvious advantages of retention and satisfaction, what are the deeper, transformative benefits of meaningful employee recognition?

1. Improves teamwork and strengthens relationships

Recognition, whether from peers or leadership, plays a pivotal role in fostering a collaborative and supportive work environment. Positive feedback boosts morale, encourages stronger team dynamics, and nurtures a culture where employees are valued and connected. Peer recognition, in particular, builds rapport among colleagues, motivating teams to work cohesively toward shared goals while reinforcing a sense of camaraderie.

2. Creates a culture of recognition that can be depended on

Consistent and meaningful employee recognition fosters a reliable culture of appreciation that employees can count on. When recognition is frequent and tied to tangible rewards, such as bonuses or other incentives, it boosts employee morale and strengthens employee engagement. This dependability motivates team members to consistently deliver their best work, driving performance and contributing to positive business outcomes. A well-structured employee recognition program ensures employees feel appreciated and inspired to excel. (We’ll get deeper into this topic a little later.)

3. Builds company branding and advocacy

Recognizing employees’ contributions and making them feel like an integral part of the organization not only boosts morale but also enhances your company’s employer value proposition (EVP). Employees who feel valued are more likely to embody company values in their work and act as brand ambassadors outside the workplace. By fostering this alignment, organizations can significantly enhance business outcomes while improving their external reputation.

For instance, a strong EVP—grounded in recognition and appreciation—helps attract top talent, retain high-performing employees, and build a positive work environment. Learn more about the role of an employer value proposition in driving employee advocacy and business success.

4. Reduces burnout and absenteeism

Recognition plays a vital role in combating employee burnout, a pervasive issue in today’s workforce. When workers feel supported and acknowledged for their contributions, they are less likely to experience the stress and disconnection that often lead to burnout. According to the American Psychological Association’s 2023 Work in America Survey, employees who experience higher levels of psychological safety—a key component of belonging—are significantly less likely to describe their workplace as toxic.

In addition, a lack of recognition is strongly linked to increased burnout and disengagement, which can contribute to high turnover rates. Addressing these issues through consistent and personalized employee recognition is a powerful way to support employee well-being, boost morale, and encourage long-term loyalty. Recognizing efforts isn’t just a “nice-to-have”; it’s a strategic investment in the overall health of your workforce.

5. Fosters company loyalty

When employees feel valued for their contributions, they are more likely to go above and beyond in their roles, becoming passionate advocates for your company. This sense of loyalty encourages them to stay, reducing turnover and creating a workforce invested in shared success. Recognized employees are not just workers; they become ambassadors who embody your organization’s values, fostering a culture of dedication and pride.

People may take a job for more money, but they often leave it for more recognition.

Dr. Bob Nelson, best-selling author and motivational speaker

6. Improves employee well-being and mental health

Employee recognition goes a long way toward improving the well-being of your employees. There’s not much worse (at work) than feeling ignored and unheard. Employees who feel valued know that their employer wants to empower employees to do their best work. In addition, positive recognition can help employees suffering from mental health issues, too.

A successful employee recognition program can do a lot for your organization; it increases employee engagement and reduces employee turnover, but it also helps to build company culture, moderates employee behavior, leads to increased productivity, and leads to a more positive environment overall. 

If you don’t have a staff recognition program in place today, there’s no better time than the present to get started! Let’s take a look at some of the types of employee recognition you should be aware of. 

Types of employee recognition

Building a positive company culture starts with meaningful employee recognition and employee appreciation. When employees feel valued, they align more closely with your company values and are inspired to give their best effort every day. While implementing an employee recognition platform can streamline this process, it’s not the only way to show appreciation. From simple gestures to structured programs, there are countless ways to foster a culture of recognition. 

Here are some effective types of employee recognition every organization should consider.

Employees are a company’s greatest asset – they’re your competitive advantage. You want to attract and retain the best; provide them with encouragement, stimulus, and make them feel that they are an integral part of the company’s mission.

Anne M. Mulcahy, former CEO of Xerox

Steps to create a culture of recognition

Building a culture of recognition is essential for fostering a positive workplace environment and boosting employee morale. To make your recognition efforts impactful and actionable, follow these steps:

1. Define your goals

Start by understanding why recognition is important for your organization. Is your focus on retaining top talent, improving employee engagement, or driving business outcomes? Defining clear objectives will help shape your recognition program to align with your company values and workforce needs.

Appreciate everything your associates do for the business. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free and worth a fortune.

Sam Walton

2.  Allocate a budget

Effective employee recognition doesn’t have to be expensive, but it does require planning. Include your recognition platform, rewards program, or related initiatives in your budget. Consistent and well-funded recognition efforts build trust and demonstrate the program’s importance to employees.

3.  Involve leadership

Recognition programs are most successful when leadership sets the tone. Ensure managers and executives actively participate in recognizing employees. Provide training and resources to help them deliver recognition that motivates employees.

4. Keep it simple

Complex programs are less likely to succeed. Design a recognition system that’s easy to understand, straightforward to implement, and adaptable. Whether it’s a peer recognition tool or a monthly awards program, simplicity ensures consistency.

5. Personalize your approach

Tailor recognition to individual preferences. Not all employees value the same type of acknowledgment—some prefer public recognition, while others might appreciate private praise or tangible rewards. Personalized recognition feels more genuine and impactful.

6. Measure and improve

Track participation and engagement to evaluate your recognition program’s effectiveness. Use feedback from employees to refine your approach. A data-driven recognition strategy ensures continuous improvement and long-term success.

Culture and values in action

“We know we can only be a great place to shop if we’re first a great place to work. The Firstup intelligent communication platform enables our culture and values in action through a digital tool.”

Learn more 

Real-world examples of employee recognition

Employee recognition programs take many forms, but the common thread is their ability to foster engagement, connection, and a positive workplace. Here are some standout examples from Firstup customers:

Newell Brands: Empowering peer-to-peer recognition

The “Newell Now” app acts as a central hub for company information and employee interaction. It enables employees to recognize and engage with their peers by sharing content, fostering a connected and collaborative environment.
Learn more about Newell’s story.

Raising Cane’s: Building a community of recognition

The “1LV Crew” platform connects employees across 560 locations, encouraging team members to share their thoughts, ideas, and experiences. This initiative builds a strong sense of community and fosters peer recognition among employees.
Explore Raising Cane’s story.

JetBlue: Celebrating crew contributions

JetBlue prioritizes recognizing its crew members as the “heart and soul of JetBlue.” The company ensures its team feels connected and valued for their contributions, creating a workplace culture centered on appreciation.
Read JetBlue’s full story.

World’s Finest Chocolate: Recognition through gamification

The “WFWorks” app keeps employees engaged with a mix of text, videos, photos, and employee-generated content. Gamification is a key feature, allowing employees to earn points for participation, making recognition rewarding and fun.
Discover World’s Finest Chocolate’s approach.

Bounteous: Empowering employees as brand ambassadors

Bounteous launched “The Well,” a platform for employees to access and share company information. This initiative fosters a sense of community and recognizes employees’ vital roles in promoting company culture and values.
Learn more about Bounteous’s journey.

These examples demonstrate how companies can creatively implement recognition programs to enhance engagement, build community, and celebrate employee contributions.

Cheat sheet: 34 employee recognition ideas that deliver results

Looking for inspiration to jumpstart your employee recognition efforts? Whether you’re building a formal recognition program or just exploring simple ways to show appreciation, this cheat sheet features proven ideas that companies have used to motivate employees and create a positive workplace environment.

Everyday recognition that makes a difference

1. Say thank you—frequently and sincerely.
2. Treat an individual or team to lunch.
3. Celebrate birthdays and key milestones.
4. Share positive feedback publicly with the entire company.
5. Send a handwritten thank-you card.

Public and social recognition

6. Recognize employees on your social media accounts.
7. Mention employees in your company newsletter.
8. Celebrate work anniversaries publicly.
9. Create an employee “Wall of Fame” in your office or intranet.
10. Share customer feedback that highlights specific employees or teams.

Fun rewards that build engagement

11. Bring in food trucks as a surprise treat.
12. Use a team trophy to celebrate outstanding work.
13. Allow job swaps for a day to encourage learning and fun.
14. Deliver company swag as a reward.
15. Send an employee care package.

Flexibility and time-based rewards

16. Offer time-off coupons that employees can use whenever they need.
17. Give employees their birthday off.
18. Extend breaks or provide an additional day off.
19. Offer sabbaticals for long-term employees to recharge.
20. Allow employees to pick up extra shifts or swap schedules easily.

Monetary recognition

21. Allocate a specific reward budget for recognition.
22. Send spot bonuses to reward exceptional performance.
23. Provide gift cards or discounts for popular retailers.
24. Match donations to charities of employees’ choosing.

Opportunities for growth

25. Offer professional development opportunities or training programs.
26. Give employees a chance to have lunch with a leader of their choice.
27. Write LinkedIn recommendations to support career growth.

Team and company-wide recognition

28. Organize engaging team-building activities as employee rewards.
29. Acknowledge teams in company “town hall” meetings.
30. Publish an annual yearbook celebrating team achievements.

Tailored and creative ideas

31. Design certificates of achievement for employees to display.
32. Implement a reserved parking program for top performers.
33. Share personal thanks from senior management directly.
34. Ask employees how they want to be recognized—survey them for ideas!

Pro tip: Tailor recognition to individual preferences

The most effective employee recognition programs focus on personalization. Some employees may prefer public recognition, while others might value tangible rewards or professional growth opportunities. Taking the time to understand what motivates your team will help you create meaningful recognition moments that truly resonate.

By incorporating even a few of these ideas into your company’s recognition efforts, you can strengthen employee morale, boost engagement, and build a culture where everyone feels valued.

Measuring the ROI of employee recognition

Measuring the return on investment (ROI) of employee recognition programs is essential for understanding their impact on organizational success. Effective recognition initiatives can lead to increased employee engagement, reduced turnover, and enhanced financial performance.

Reduced employee turnover

Employee recognition programs play a pivotal role in decreasing turnover rates. Gallup’s research indicates that highly engaged teams experience a 59% reduction in turnover compared to less engaged teams. This reduction in turnover translates to significant cost savings, considering the expenses associated with recruiting, onboarding, and training new employees.

Enhanced financial performance

Investing in employee experience, which includes recognition programs, has a direct correlation with financial performance. According to the MIT Center for Information Systems Research, organizations that rank in the top quartile for employee experience achieve net profit margins 8.4 percentage points higher than those in the bottom quartile. This demonstrates that a positive employee experience contributes to profitability.

Improved customer satisfaction

Recognized and engaged employees are more likely to deliver exceptional customer service. Gallup’s findings reveal that business units with high employee engagement scores experience a 10% increase in customer ratings. Satisfied customers lead to repeat business and positive word-of-mouth, further enhancing revenue.

Increased productivity

Employee recognition fosters a culture of motivation and commitment, leading to higher productivity levels. Gallup’s meta-analysis shows that engaged employees are 17% more productive than their disengaged counterparts. This boost in productivity contributes to overall organizational efficiency and output.

Conclusion

Creating a culture of employee recognition is more than just a box to check—it’s a commitment to valuing and empowering your people every single day. Recognition isn’t a one-time event or occasional celebration; it’s a consistent, meaningful practice that shows employees they are seen, heard, and appreciated for the vital role they play in your organization’s success.

When recognition becomes an integral part of your workplace, the impact is transformative. Employees feel valued, morale soars, and productivity rises. This culture of appreciation fosters loyalty, drives engagement, and strengthens your company’s foundation. In turn, your business reaps the benefits—higher retention, better performance, and a workforce that’s proud to be part of something bigger.

Recognizing employees, and making them feel part of a bigger picture, can drastically increase business outcomes as they become invested in the brand and its culture. Employees will work to exemplify company values and share those values outside of work, too. 

Start small or think big, but start somewhere. Hopefully, you will be able to use and implement some or all the ideas here for your own employee recognition program and show just how much your company values its workforce!