10 Reasons Why Rewards and Recognition is the Secret Sauce to Retention

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“Brains, like hearts, go where they are appreciated.” ~Robert McNamara.

When people find a workplace where they can throw their hearts and minds, they work harder, produce better and stay longer.

Retaining talent is a top concern of HR practitioners worldwide. Regardless of the cause for leaving a job, it is now a top priority to deploy effective employee retention strategies to stay productive.

I believe the ultimate secret sauce to reducing turnover and increasing retention is meaningful recognition practices.

When employee recognition becomes an integral part of the company culture, it helps the company on many levels. Employees feel welcomed, valued and motivated at work. Proper, timely and fair recognition practices naturally uplift the vibe of the workplace and nurture a positive work environment.

In this blog, we’ll explore why and how recognition boosts long-term employee retention.

1.) Builds Trust and Respect

The biggest positive about an appreciative work environment is that it builds trust and respect among the workforce. People in the organization get a means to learn about their peers’ strengths and unique qualities. Simultaneously, they also get to showcase their own talent and hard work. It leads to a happier and more satisfied workplace with trust as the binding force. This translates to employee loyalty and aids in employee retention.

2.) Promotes Healthy Competition

When recognition is done in a fair and timely fashion, people become more motivated to deliver their best efforts. They become aware that their great work will not go unnoticed and they often run the extra mile to get a job done. This not only helps the company in achieving its goals but is also cultivates self-improvement among employees. Employees feel more invested in such an environment.

3.) Enhances Team Spirit

Recognition should be seen as a culture-building initiative. Recognition shouldn’t always be in top-down fashion, but should also promote horizontal or peer-to-peer recognition. When peer-peer recognition becomes a norm in the workplace it builds camaraderie and enhances team spirit. It builds a collaborative workspace where people more tightly knit and the sense of commitment with the company.

teamwork group fist bump

4.) Reduces Stress and Conflict

A hostile work environment is one where the atmosphere, people, and/or the work leads to a disruption in life. Turnover rates (both voluntary and involuntary) are exponentially high in such an environment. Boosting rewards and recognition efforts can be a great approach to prevent and mitigate a hostile work environment. A culture of fair recognition, meaningful rewards, exchange of praise and compliments on the workplace reduces stress and internal conflict.

5.) Improves Manager/Employee Relationships

People don’t leave jobs, they leave managers. The manager-employee relationship in the workplace is perhaps the most crucial one. It is a top factor that can determine an employee’s decision to leave or stay with a company. Rewards and recognition boost employee-manager relationships and promote a cycle of constructive feedback in the workplace.

6.) Makes Jobs More Interesting

According to a study by Randstad, 30% of the respondents cited “lack of challenging work” as their reason for leaving. Often, after a certain amount of time in a particular role, people find that their work is monotonous or boring. It can be a major contributor to dissatisfaction and people might start seeking new, more challenging prospects. 

employee working at desk

Rewards and recognition can play a special role here. It gives your employees validation for their untiring efforts and celebrates their strengths. It motivates them to find new and more efficient ways to get their job done.

7.) Empowers Employees

Another interesting advantage of recognition is that recognition empowers employees. When employees are recognized they get a clear idea about what is expected of them. Also, by praising and recognizing efforts you offer them room to grow and learn. They eventually start taking ownership and autonomy at their work and, as a result, they are more invested and are more likely to stay longer.

8.) Fosters Good Brand Recognition

Effective rewards and recognition practices lead to strong employee advocacy. Employees become genuine promoters for the company and its products or services. They actively spread good things about the company through word of mouth or social media. This helps in attracting the right candidates that gel well with the company culture and stay for a longer time. Additionally, it spreads a positive attitude among the people.

9.) Encourages Career Growth

Your employees inherently want to grow and prosper in their lives. When they are recognized and rewarded for their work, they get validation for their hard work or talent. Certificates, awards, social media mentions and public announcements give them a channel to flaunt their hard-earned achievement. These become notable milestones in your employee’s career trajectory. They constantly feel that they are progressing in their professional lives.

career coaching career growth

10.) Nurtures Great Company Culture

Although keeping your employees happy is not completely in your hands, boosting recognition in the workplace still is. Good R&R practices are a proven way to enhance intrinsic motivation among employees and to nurture a great company culture. When the company culture is positive it naturally encourages employees to work harder and drives employee engagement. “If you get the culture right, most of the other stuff will just take care of itself.” Creating the right culture should be the primary goal for all organization to retain their biggest asset, the people.


How are you using rewards and recognition to cultivate a positive work environment and foster long-term retention? Share your experiences in the comments below! 

Darsana Vantage Circle

Darsana Dutta works as a Content Marketer at  Vantage Circle - an  Employee Engagement and Benefits Platform. She loves to keep herself up-to-date and share her views on the latest trends around employee engagement and human resource management.

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