People value being valued—and not only, or even primarily, in monetary terms.

Companies are learning to reward and recognize employee achievement in more meaningful ways.

While every employee would like to earn more money, Deloitte research has shown that a more important driver of retention than above-average compensation is a “high-recognition culture.”

Companies that have built a strong culture of “thank you” and “recognition” have a 31 percent lower turnover rate than their peers with ineffective recognition programs, driving higher productivity and tremendous savings in turnover costs.

The findings indicate that recognition plays a much more measureable role in business performance than previously believed.



Dan Pink, author of the best-selling Drive, asserts that high-performing employees want three things: autonomy, mastery, and purpose.

Rigid goals and “pay for performance” plans, according to Pink, can in many situations actually lead to lower performance and less innovation.

The company where people want to work, allows employees to work independently, focus on their strengths, and align themselves with well-understood corporate goals to drive higher performance and more innovation.

Summarized in a WhatWorks® market brief titled “Turning Thank You into Performance,” the findings are consistent with recent foundational research on high-impact performance management by Bersin & Associates to drive stronger employee and business results.

Organizations where recognition occurs, employee engagement, productivity and customer service are about 14 percent better than in those where recognition does not occur.

“This new research highlights a huge opportunity for companies to redirect existing expenditures to programs that significantly influence engagement and retention. The findings also suggest that recognition programs should align with an organization’s comprehensive performance management strategy to drive business results,”  said Josh Bersin, Chief Executive Officer and President, Bersin & Associates.

Only 17 percent of employees who participated in the Bersin & Associates study indicated that their organizations’ cultures strongly support recognition. This lack of effectiveness is largely driven by the misdirected nature of most recognition programs: 87 percent of organizations reported that their programs are designed to recognize service or tenure. These programs do not meet the needs of today’s employees, nearly 70 percent of whom report they are recognized annually or not at all.

The research shows that for employees, the most important elements of a recognition program are the ability to receive specific feedback and give recognition easily.

Many companies are responding to this need by leveraging social technologies that enable employees to give and receive positive feedback with others in the network.

“Consistent with the research we produce for our members, this study shows recognition is an important part of an overall performance management approach that regularly reinforces critical employee behaviors and expectations to deliver better employee productivity and business results,” said Stacia Sherman Garr, Principal Analyst, Bersin & Associates, and author of the study. “ As organizations prepare to hire, grow and manage their workforces of tomorrow, it is essential that HR leaders and their teams take the actions necessary to ensure their talent programs remain competitive.”

The study also found that:

  • Three out of four companies have a recognition program, but only 58 percent of employees believe their organizations have these programs. This disconnect indicates that despite the money organizations invest in recognition programs – about 1 percent of payroll – many employees do not even know their programs exist. Many organizations have a huge opportunity to leverage their recognition programs more effectively through – at a minimum – improved communications about the programs in place.
  • Nearly two-thirds of HR respondents indicated HR does not effectively enable recognition. This ineffectiveness is underscored by the fact that nearly half of HR respondents report that the organizations’ culture does not support recognition and the fact that most recognition programs are designed to recognize service or tenure. However, those organizations that recognize employees for “demonstrating company values,” “displaying certain identified behaviors,” and “achieving company goals” are far more effective at enabling recognition than those that do not incorporate these attributes.
  • Senior leaders are out of touch with how often employees are recognized. Nearly 80 percent of senior leaders believe employees are recognized at least on a monthly basis, with 43 percent of senior leaders stating employees are recognized weekly or more often. This finding contrasts starkly with the reports from managers and individual contributors: 40 percent of managers and only 22 percent of individual contributors report that their peers are recognized monthly or more often.