The Role of Recognition and Rewards in Team Motivation
Apr 04, 2025
In recent years, the goal of employment has become less so on the financial side of earning potential and more on factors that benefit a person’s emotional fulfillment. There are several reasons for this, the first being that in 2020, people realized that employers could cut them from the job with little to no provocation or notice. This led to people working on personal development and other aspects of their lives that gave them more fulfillment than their jobs.
While money is obviously the primary motivator for having a job, it is no longer the only one and is certainly not the only reason for working together effectively as a team. Instead, it’s being replaced by internal motivation, rewards and recognition, and friendly competition because now the job has to compete with the dozens of other ways a person can sustain their quality of living. It also competes with the person’s desire to live a drama- and conflict-free life.
In this post, we’ll discuss the importance of recognition and rewards in the workplace, how it improves team motivation, and how to create a culture within a team that will motivate good workers to stay.
The Importance of Recognition and Rewards in the Workplace
Recognition in the workplace is a great way to get the most out of your employees and motivate teams to do better. The continual practice of recognizing people for their work is incredibly beneficial for the workplace environment. Here are some ways that it can help your teams operate more effectively together.
Increase Motivation- One of the top motivators of great work is recognition. When people know that their work is being seen and appreciated by others, it drives their desire to do good work and a lot of it. In fact, according to Great Place to Work (O.C. Tanner), survey responders collectively claimed recognition as the main motivator at 37%. This beat out autonomous work by 25% and more pay, which only seven percent of respondents wanted.
Show Appreciation- Appreciation comes in many forms, and by creating an open channel of communication between team members, you can teach them to appreciate each other in new ways. It goes beyond the big stuff, things like completing projects or finding major errors in documents. Even simple events like making a coffee run or saying “thank you” for completing everyday tasks can help the team show gratitude towards one another.
Encourage Friendly Competition- Competition in itself is a great motivator. It forces team members to put their best foot forward and do the job to the best of their ability, even if it’s just for the sake of bragging rights (or larger incentives, like gift cards, company swag, and even bonuses). Working competitively in an amicable way can help improve communication and team effectiveness by teaching them to work swiftly together.
Boost Employee Retention- One major benefit of rewards and recognition in the workplace is the retention of top employees. Employee turnover has increased significantly in the last few years. People are leaving jobs to find employment with companies whose overall goals align with their own personal beliefs and those who can provide them with better opportunities. Recognizing new and old employees for the work they’ve done well is the base level of incentivizing them to stay. That increased motivation to get things done because of positive recognition is also a powerful motivator to stay with a company that appreciates them.
Create a Positive Workplace- Balancing this all out is the benefit of a positive workplace. When people are motivated to stay, to get work done, and to communicate and compete with a good attitude, the resulting culture of productivity and positivity will show in the team’s everyday interactions.
Creating a Culture of Recognition in the Workplace
Recognizing team members for a job well done doesn’t happen overnight. Nor is it something that can be done when you feel like it. Instead, it takes intentional effort to develop a system that enables you to effortlessly recognize individuals for a job well done. Recognition can come in many forms, but whatever form it takes, these steps will help you create a culture of recognition in your workplace.
- Establish criteria for recognition. What are the specific job tasks or achievements within your workplace for which you want to recognize employees? Individual tasks are a powerful motivator on the day-to-day. However, the completion of a project may be a more beneficial goal with a higher reward threshold. The longer the project, the more likely a team member is to become unmotivated or discouraged. By setting a reward to go with the completion of a project, they have something to look forward to.
- Set your objectives. What is the purpose behind establishing a specific reward? If you already have a positive and productive workplace, the establishment of a system of recognition may seem redundant. There could be room for individual advancement or specific project achievements that require more incentives than others. Creating a goal in mind, such as a specific level of sales or customer conversions within a given timeframe, is an effective productivity driver.
- Choose awards that fit your environment (and ensure they’re sustainable). If the company is incapable of repeating company retreats or Christmas bonuses, then don’t set them as a reward. Instead, find the one that fits the culture of the company. Some companies only have a handful of employees, and retreats could be as simple as a short camping trip to a local site, which is maintainable. In terms of individual recognition on a daily basis, look for opportunities to call out a job well done.
- Communicate. Communication is key in team motivation. Effective communication is not boastful or demeaning. Instead, it’s clear, concise, and offers ways to advance instead of detracting from an experience. It’s a powerful motivator when everybody understands their purpose within the team, as well as defines their needs and what they need help with.
- Celebrate successes. Big goals are reached by small steps taken every day. Celebrate the little milestones in order to maintain momentum. The completion of individual daily tasks can sometimes be rewarding enough.
- Monitor the progress of your rewards and recognition program. Just like any goal, the goal of recognizing employees for their work should be a SMART one, which equates to a measurable goal that can be tracked and reached within a given time frame. To understand the benefits of this recognition, monitoring the level of happiness, motivation, and any other factor is key to knowing if it’s really making an improvement to the team.
- Encourage employee feedback to understand the impact. Using surveys, personal reviews, and one-on-one conversations, you can gain valuable understanding from those who should be most impacted by employee recognition. By getting this feedback, improvements can be made to the team culture as a whole.
What does recognition in the workplace look like?
Recognition in the workplace can take many different forms that depend heavily on the type of work, the number of people in the company or team, and the work environment as a whole. For instance:
Incentive programs can look completely different from company to company. They can take the form of gift cards offered at the end of the month or yearly company-wide retreats.
Professional development opportunities are another form of incentivizing employees. Professional development can help the company gain more qualified employees and can be a powerful motivator for competitive or high-achieving individuals.
Awards based on desirable qualities is a less expensive way of recognizing individuals on a team for the work they’ve done. With categories like Outstanding Customer Service, Innovator Award, and Most Reliable, you can capitalize on a person’s desire to be recognized by others in a more formal environment where their achievements are recognized by the team.
Consistent recognition of improvement is the most underrated form of recognizing a team member’s hard work. This is a hard skill to learn, but being able to vocalize your impression of a person’s work in a positive way as soon as you see it can be one of the biggest game changers in your team’s motivation.
Recognition can come in many forms, and it plays a powerful role in motivating teams to do better. It looks different for every company, every team, and every individual, and taking steps to evaluate your personal situation and creating a culture of recognition within the workplace will help the team be more productive and show more employee loyalty, enabling you to retain top performers.
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