Employee recognition myths debunked.

Most leaders know that recognition drives powerful results, both on a human and commercial level. It’s a well-researched topic with the stats undeniably proving that companies with a strong recognition blueprint perform better than those that don’t.

Research also tells us that employees want more recognition and if they felt more valued, would give more, stay with the company longer and be their best selves at work.

So, if leaders believe in the recognition programs they are rolling out, and employees want them – why do so many fail?

One reason is that many programs are based on blatant misconceptions. Programs based on outdated ideas and outright myths, even with great leadership support, will fail. They may sustain some engagement at the beginning but they won’t foster long term results.

Here are the most common employee recognition myths you should avoid at all costs.

Employee recognition myth #1: Money is the best motivator.

Money as the all powerful motivator is an old myth but still often cited when it comes to employee behaviour today.

It can be easy to throw money at an engagement problem – but it will be a waste of money. Money is important, we all have bills to pay and a life to live but research tells us that as long as employees are fairly paid and basic needs can be met, money stops being an influencing factor in their behaviour and does nothing for their motivation.

Employees are looking for something more than a transactional relationship with their company. Yes, they want fair pay for effort but fundamentally, employees want to be part of something bigger. Most are not just there for the end of quarter bonus, they want to know they are contributing to something bigger than themselves. They want to be connected to their team. They want to be appreciated and valued for their contribution.

Throwing more money at employees doesn’t solve the challenge of low engagement. In fact, it can create even bigger downstream issues. When you give an employee a bonus – let’s say the company had a great quarter and everyone gets a 5% bump – employees mentally add this in their ‘earnings’ pool. Behavioural economists call this practice of allocating earnings into buckets ‘mental accounting’. Next quarter, even if the company performs poorly and employees don’t earn the bonus, they expect it. Even worse, when they don’t see it in their account they feel disgruntled. Irrational? Yes, but it’s a human response to cash as a reward.

If you want to build a powerful culture, look past money as the motivator and create more meaningful moments of connection and authenticity. Find out what your employees really want and find ways to deliver for them.

Employee recognition myth #2: Employees need to hit targets to get rewarded.

Employee recognition is not just about big, visible successes. Recognising the small things that happen day in day out is important.

The daily achievements of employees, those things that are considered ‘just part of the job’ are moments where you can make an employee feel really valued. Most employees expect that if they do something grand, it will be seen and recognised. They don’t necessarily expect the same for the every actions so reinforcing those behaviours is powerful.

The small actions are also a large part of the success of any initiative. If one small action is missed, there is a flow on effect that can lead to a much bigger challenge. Showing employees that their actions, regardless of size, are meaningful to the business and appreciated means they are more likely to continue to positively contribute.

Everyday achievements may not feel meaningful on their own but having them delivered well, by employees who feel appreciated, contributes to project success.

Employee recognition myth #3: Recognition takes a lot of effort.

Today’s managers have a to-do list that is longer than ever. And with many of their team now physically disconnected in a hybrid workplace, that list is not getting any easier to manage.

Recognition can feel like just another managers have to do, another thing that will take up time and effort and keep them from more important tasks.

Recognition does take some effort but the benefit of recognising far outweighs the effort it takes. Rather than being something you don’t have time for, it’s something you can’t afford not to do.

We know that recognition drives engagement and engagement drives increased enthusiasm and output. That’s a time win right there for any manager. If your team are more energised, they will do more and can get through more each day.

We also know that recognition is reciprocal. Not only does the employee you are recognising get a boost from the recognition, there are positives for the person giving too. Giving recognition has been proven to improve feelings of satisfaction and happiness so while celebrating the moment for a team member, the person giving the recognition enjoys a bit of the halo effect themselves.

And frankly, time management aside, if managers don’t want to recognise their team for exceptional performance, they may need to go back to manager school.

Employee recognition myth #4: Recognition is a soft skill.

Modern workplaces just can’t afford to see recognition as a soft skill. Yes, it plays into the interpersonal but it’s an occupational imperative for thriving culture.

Happy employees lead to happy customers so making your employees feel valued and appreciated, leads to greater returns. One Towers Watson survey showed a 15% increase in engagement leading to a 2% increase in profit margin.

Driving increased results is not a soft skill and neither are the factors that underpin that success.

Employee recognition myth #5: Competition drives engagement.

Some companies still run recognition programs like they are sales incentives, rewarding the person with the most recognition tags. All this does is drive inauthentic recognition and gaming of the system. Employees will recognise each other just to get to the top of the leader board, ultimately undermining the whole program.

Competition may work well for some of your more competitive employees however, some many will switch off before the program has had an impact. In a competition, it’s easy for employees to feel like they have no chance and if there are only a few reward positions, why would they try?

For recognition to be impactful, it needs to be timely and authentic. When you are rewarding for volume, you lose authenticity and integrity. Not just for those who received the volume of appreciation going their way, but for others watching on.

Competitions also don’t take into account personal comfort with recognition or how individuals and teams work together. It essentially becomes a popularity contest where those who are loudest get the most votes, and the quiet achiever who sits in the corner working magic for the company, feels left out and ultimately undervalued.

If you want recognition to be impactful, take the leader board down and allow it to organically flow across the organisation.

Employee recognition myth #6: Top down recognition is most impactful.

Many people think that recognition from the top is the most important form of employee appreciation. While there is a place for top-down recognition, it’s not as important as you may think.

Recognition from all levels matters to an employee but it is often peer-led recognition that has the most impact.

Recognition from senior leaders tends to come with a sense of obligation. Leaders can be seen as having to ‘tick the recognition box’ in order to deliver on the expectation of their role. In some cases, employees can actually become a little cynical about top-down recognition, thinking it lacks authenticity.

The celebrations that matter most? The moments that are called out by an employees’ direct manager or their peers.

Peers are not required to recognise each other so peer recognition can come with a greater sense of sincerity. While direct managers have some obligation to keep their team happy, they also have a deeper connection to their team and what their team are delivering for them. It comes as no surprise then that the value managers place on behaviours is often cited by employees as being more powerful than that of senior leaders.

Employee recognition myth #7: Recognition is all cost, no ROI.

Recognition does require some investment but it will deliver a positive ROI over time.

Recognition does not have to cost anything, there are lots of free ways to recognise. There is also more than one way to reward employees, if you reward at all. It is entirely up to each organisation to determine how much they allocate to rewarding and using tools like time and activity rewards - we call them perks – can dramatically reduce the need to spend on rewards at all.

There are costs for employee recognition software– not imperative but pays off in dividends with the time you get back from trying to manage a program manually. There are also costs for communication but every initiative needs to be shared so employees know what it is about.

The ROI though, even for a very low cost recognition program is huge. One SHRM Employee Recognition Survey reveals that when companies spend 1% or more of payroll on recognition, 85% see a positive impact on engagement.

Employee recognition myth #8: Any appreciation is great appreciation.

Not the case. Thanking someone for something they did months ago, or voting in December for something that happened in March, is almost as bad as not showing your appreciation at all. Almost.

For recognition to have the best impact, it needs to be in-the-moment. Two weeks later when you get around to writing out an email, the moment has gone and so has they positive effect of the recognition. Employees have moved on and so should you.

No surprises that the most successful programs see regular recognition in real-time that power a thriving culture.

Employee recognition myth #9: You can’t afford recognition.

Like any initiative, there is a cost to recognition but there is also a huge opportunity cost in not making your employees feel heard, valued and united. Studies show that two in three employees resign as they do not feel appreciated and even more would work harder if their efforts were valued in a more meaningful way.

Recognition does not have to be formalised or delivered via a company-wide platform. If you have no budget, here is a list of fun, cost effective ways to recognise that will start delivering bottom line benefits.

However, celebrating recognition moments across the company in a transparent and meaningful way is invaluable. It’s not that you can’t afford it, it’s that you can’t afford not to do it.

So what can we learn from this?

It’s clear that recognition is a must-have for companies today, not a nice to have. However just ticking boxes won’t cut it with your employees. For any program to be successful it needs to drive meaningful interactions, develop deep connections between employees and celebrate achievements appropriately.

Just make sure to avoid these employee recognition myths when designing how you will show your employees appreciation.