This document discusses how performance recognition impacts employee engagement, innovation, and output. It finds that employees who receive recognition are over twice as likely to be highly engaged compared to those who do not. Recognition also fuels innovation, as employees who receive strong recognition generate nearly twice as many new ideas per month to improve their company. Finally, recognition increases employee output, with over 50% of employees working at 90% capacity or above when companies focus on recognition, compared to only 40% when recognition is weak. The document recommends that managers thoughtfully combine both frequent, informal recognition of ongoing efforts as well as less frequent but more formal recognition of above-and-beyond performance.

1. HOW
PERFORMANCE
RECOGNITION
Impacts Innovation & Employee Engagement

2. THINK ABOUT THE LAST TIME
S O M E O N E YO U WO R K W I T H TO L D YO U ,
“GREAT JOB!”
HOW D I D I T M A K E YO U F E E L?

3. FOR MOST O F US,
SINCERE RECOGN ITION CA N B E A
POWERFUL
MOTIVATOR
TO REDOUBLE OUR EFFORTS
AND STRIVE FOR EVEN GREATER
PERFORMANCE IN THE FUTURE
W HET H E R I N
SPORTS, AMONG OUR FAMILIES, OR AT WORK.

4. AND AS A RE S ULT,
I N FAC T,
E MP LOYE E S
STUDIES SHOW
w ho re ce i ve re co g n ition
are m o re l i ke l y to be
hi g hl y e ng ag e d.
ARE MORE LIKELY TO
PERFORM AT THEIR BEST
&
MO RE LIKE LY TO DE VE LO P
INNOVATIVE
WAYS TO I MPR OVE THEI R COMPA N Y.

5. WE WIL L LOO K AT T WO DI F F E R E N T
TY PES OF P ERFORM A NC E R E CO GN I T I O N:
1
ONGOING EFFORT:
Th is i s t yp i c a l l y in fo r m a l, ca s u a l,
and more f re q u e nt re co g n it io n ,
typ ica l l y d e l i ve re d in t h e fo r m o f
a w ri t te n n ote, a n e m a il, o r a
since re t h a n k you .
2
A BOV E A N D BE YO N D
PE R FO R M A N C E :
Thi s ty pe o f re co gni ti o n i s
ty pi cal l y mo re fo rmal and ti e d to
a mo re si gni f i cant achi eve me nt.
It i s f re que ntl y acco mpani e d by
anno unce me nt to the te am o r
co mpany and/o r an award i te m.

6. L ET ’ S EX P LO R E
how performance re co g ni ti o n i mp a cts
yo u r employee’s engageme nt, i nnovati o n, and o utp ut.

7. ENGAGEMENT

8. I N THE L AST FEW YEARS ,
A REC URRI NG FOCUS OF DISCUSSIONS
O F BUS INE SS PERFORMANCE HAS BEEN
INCREASING EMPLOY E E

9. E M PLOY E E E N GAGE M E N T %
6 0 -70
Wh i l e d ef in it ion s o f e ng ag e m e nt
abou nd , t h e c r u x o f t he i d e a i s s i m p l e
- w h en em p loyees are m o re f ul f i l l e d
i n th e ir wor k a n d co m m i t te d to t he i r
col l eag u es a n d comp any, t hey ( and
th e com p a ny) w ill p e rfo rm b e t te r.
49 - 6 0
>25
9.1
-
24.2
AVG. SHA R E HOLD E R ’S R E T U R N %
200 4 Hewi t t A ss ociates, E mp loyee Enga gem e nt at Double -Digit Growth Co mp an ies

10. AS A RE S U LT
co mp a nies are investing heavily
in a va rie ty of ways to inc re a se
em ployee e nga gem e nt.

11. ONE OF THE MOST EFFECTIVE
W AY S T O I N C R E A S E E N G A G E M E N T
is simply to recognize
employees for their
performance,
I N BOT H FO R MAL A N D
I N FO RM A L WAYS .

12. RECOG N I T I O N AC R OSS FO U R
COMPONEN TS OF E NGAGE ME N T:
D RI V E & DE T E R MI N AT I O N
89%
PERCENT OF EMPLOYEES
WHO ARE HIGHLY ENGAGED
44%
W H EN COMPANI ES
FOCUS ON RECOGN I T I ON
W HEN CO M PA N I ES
D O N ’ T CA R E

13. RECOG N I T I O N AC R OSS FO U R
COMPONEN TS OF E NGAGE ME N T:
COM PA N Y CO N N E C T I O N
81%
PERCENT OF EMPLOYEES
WHO ARE HIGHLY ENGAGED
35%
W H EN COMPANI ES
FOCUS ON RECOGN I T I ON
W HEN CO M PA N I ES
D O N ’ T CA R E

14. RECOG N I T I O N AC R OSS FO U R
COMPONEN TS OF E NGAGE ME N T:
WOR K R E L AT I O N S H I P S
78%
PERCENT OF EMPLOYEES
WHO ARE HIGHLY ENGAGED
35%
W H EN COMPANI ES
FOCUS ON RECOGN I T I ON
W HEN CO M PA N I ES
D O N ’ T CA R E

15. RECOG N I T I O N AC R OSS FO U R
COMPONEN TS OF E NGAGE ME N T:
P E R S O NAL STA N DI NG
76%
PERCENT OF EMPLOYEES
WHO ARE HIGHLY ENGAGED
28%
W H EN COMPANI ES
FOCUS ON RECOGN I T I ON
W HEN CO M PA N I ES
D O N ’ T CA R E

16. D RIV E &
DE TER M I N AT I O N
CO MPANY
CO N N E C T I O N
WO RK
RE LAT IO NS H IPS
PE RS O NAL
STANDING
W HE N LOO KI N G AC R OSS THESE FOUR DIMENSIONS,
t h e re i s a stark d if feren ce i n the e nga gem e nt levels of
t h o s e wh o receive recog n ition with those who do not.

17. M O R E THA N TWICE AS MANY
E M P LOYE E S A RE HIGHLY ENGAGED
amon g th ose who re ce ive pe rform a nce
recog n ition com pa red to those who do not.

18. R ECOG N I T I O N A N D E NGAGE ME N T
78%
PERCENT OF EMPLOYEES
WHO ARE HIGHLY ENGAGED
34%
CO M PANI ES WI TH
ST R O NG RE COGN I T I ON
CO M PA N I ES W I T H
W EA K R ECO GN IT IO N

19. A g ood example of this is se en in
th e relation s hip be tween m a na gers
an d th ose they direc tly oversee.

20. A MON G THOSE W HO R EC EIV E
ST RO NG P ERFORMAN C E R ECOG N I T I ON
Great job!
A M O N G TH OS E W H O R E C E I V E
W E A K P E R F O R M A N C E R E CO G N I TI O N
...
87%
51%
say they h ave a st ro n g re lat io n s h ip
wi t h t h e i r d i re ct m a n a g e r s
say they have a stro ng re l ati o nshi p
wi th the i r di re ct manage rs

21. Great job!
FREQUENT
RECOGNITION
IN ADDITION,
82% o f ma na ge rs who re cog n i ze t h ei r em p l oyees ’
pe r fo r m a nce m ore t h an o n ce a mo n t h
REPORT HAVING GOOD RELATIONSHIPS WITH THEM.

22. Great job!
INFREQUENT
RECOGNITION
IN CONTRAST,
only 63% o f m a na g er s w h o recog n i ze
pe r fo r m a nce le ss f req u en t l y
REPORT HAVING GOOD RELATIONSHIPS WITH THEM.
U NFORT UN ATE LY,
39%
O F MANAG E RS RE PO RT T H AT T H E Y
INFRE Q U E NT LY RE CO G NIZE T H E IR
T E AM ME MB E RS ’ PE RFO RMANCE .

23. While it’s certainly possible that
RECOGNITION IS A RESULT OF
GOOD RELATIONSHIPS
(and good managers),
THE OPPOSITE IS CLEARLY ALSO TRUE

24. INCREASED PERFORMANCE
RECOGNITION APPEARS TO BE
ONE OF THE MOST
EFFECTIVE WAYS
to improve relationships between
managers and employees.

25. >
I N FAC T,
employees believe eit he r ty p e o f re co g ni ti o n
is much more import ant tha n a c ash b o nus.

26. E MPLOYEE/ MANAGER R EL AT I ON SHI P S A R E
IM PROVE D BY P ERFOR M A N C E R ECOG N I T I ON
EMPLOYEES CHOICE OF WHICH BENEFIT WOULD
MOST IMPROVE THEIR RELATIONSHIP WITH THEIR DIRECT MANAGER.
50%
22%
5% SAL ARY
B O NUS
28%
A B OV E & B E YO N D
R E COG N I T I O N
O N GO IN G EF F O R T
R ECO G N I T I O N

27. P E RFORM A N C E R E CO GNI T I O N
F UEL S E M P LOY E E I NNOVAT I O N

28. SO, IF EMPLOYEE ENGAGEMENT
?
increases with strong performance recognition,
HOW DOES THAT AFFECT
EMPLOYEE AND COMPANY
PERFORMANCE

29. THE FIRST MAJOR EFFECT
THAT RECOGNITION HAS ON PERFORMANCE
DR IVIN G INNOVATI ON
A top p riority for successful
execu tives everywhere.

30. When asked how many new ideas
EMPLOYEES GENERATED IN THE LAST
MONTH TO IMPROVE THEIR COMPANY’S
PRODUCTS, SERVICES, OR SYSTEMS
THE RESPONSES WERE COMPELLING.

31. T HE RESP O NS E S?
Em pl oyees receiving st ro ng re co g ni ti o n g e ne rate
n e ar ly twice as m any innovat i ve i de a s e a c h m o nt h.
EMPLOYEES RECEIVING
WEAK RECOGNITION
EMPLOYEES RECEIVING
STRONG RECOGNITION
1.8 NEW IDEAS
per month
to help improve their company
3 NEW IDEAS
per month
to help improve their company

32. I N A D DI T I O N ,
Employees will proactively seek new ways to improve efficiency at their
company when they receive strong performance recognition.
EMPLOYEES RECEIVING
WEAK RECOGNITION
EMPLOYEES RECEIVING
STRONG RECOGNITION
54%
seek new ways to improve efficiency
87%
seek new ways to improve efficiency

33. While there are many factors that go into an
individual’s or a company’s ability to innovate,
We fou n d th at recognition c a n be a
p owerf u l d river of continua l im prove m e nt.

34. EMP LOY EE IN N OVAT I ON I S
IM PR OVE D BY P ERFORM A N C E R ECOG N I T I ON
EMPLOYEES CHOICE OF WHICH BENEFIT WOULD
MOST IMPROVE THEIR INNOVATION FOR THE COMPANY.
32%
5% SAL ARY
B O NUS
41%
27%
A B OV E & B E YO N D
R E COG N I T I O N
O N GO IN G EF F O R T
R ECO G N I T I O N

35. P E RFORM A N C E R E CO GNI T I O N
F UEL S E M P LOY E E O U T P U T

36. THE SECOND MAJOR EFFECT
THAT RECOGNITION HAS ON PERFORMANCE
WO R K IN G AT MAXI MUM CAPACI TY
In creasin g emp loyees’ willingne ss to
work at their be st.

37. EMP LOYE E & T E A M O U T P U T
P E R C E N T O F E MP LOYEES WORKING
AT 9 0 % C A PAC I TY OR ABOVE
53%
CO M PANI ES WI TH
ST R O NG RE COGN I T I ON
40%
CO M PA N I ES W I T H
W EA K R ECO GN IT IO N

38. E XPECTAT IONS

39. Employees have a wide variety of expectations
ABOUT THE FREQUENCY AND NATURE
OF RECOGNITION

40. IDEAL PERFORMANCE RECOGNITION FREQUENCY
MULTIPLE TIMES A WEEK
ONCE A WEEK
9%
11%
19%
MULTIPLE TIMES A MONTH
26%
ONCE A MONTH
20%
ONCE A QUARTER
ONCE EVERY 6 MONTHS
ONCE A YEAR
7%
9%

41. HOW IS A MANAGER
supposed to know how often
HE/SHE SHOULD
RECOGNIZE HIS/HER
EMPLOYEES

42. +
T HE A N SW E R
t hought fully combi ni ng f re q ue nt a nd
informal recognit ion fo r “o ng o i ng e f fo r t ”
wit h less frequent b ut mo re me ani ng f ul
reco g nit ion of “above and b eyo nd p e r fo r mance.”

43. O N G O IN G E F FORT,
esp ecially w h en prov ided frequently and
si nce re l y , can be used to recognize little wins
an d en cou rag e em ployees to ke ep going.

44. O N THE OTHER HAND,
recog n iz in g employees less frequently but
w i t h mo re fo r mality for a bove a nd beyond
p erforman ce s ets a pa rt the m ost signific a nt
ach ievemen ts i n a unique a nd soc ia l way.

45. +
RE SE A RC H S H OWS
th at bot h t ypes of recogni ti o n a re i mp o r tant a nd
s h o u ld be used in deliberate a nd co mp l e me ntar y ways.

46. Source: Cicero 2013, The Effect of Performance Recognition on Employee Engagement