Why most employee recognition programs miss the mark — and how HR can fix them

'Just by not recognizing them, you could actually do harm to your employees' motivation': academic explains why many organizations struggle to make recognition feel meaningful, and how to build programs that truly work.

Why most employee recognition programs miss the mark — and how HR can fix them

A new Alberta-based study reveals a widespread problem with how Canadian employers approach employee recognition: they’re doing it, but it’s not working.

Despite best intentions, the report from CPHR Alberta and Vantage Circle finds that fewer than 30 per cent of companies rate their recognition and rewards programs as highly effective.

That disconnect may stem from a lack of strategic design. According to Dugyu Biricik Gulseren, assistant professor of human resources management at York University, many organizations aren’t investing enough thought or intention into how their recognition systems work.

“Organizations may not be allocating resources, attention and energy to design their recognition programs," she says.

"Maybe they're just replicating what is known as the best practice, or what other companies are doing. But I think the intention piece might be missing.”

Gulseren sees a "huge gap" between what academic research recommends and what actually happens in practice, leaving powerful employee motivational tools unutilized.

“I think when organizations truly understand how how powerful recognition can be, I'm sure they would want to invest more resources and time and energy in designing those," says Gulseren. 

"They also need to just take the time to to understand and how and and design how they can better make use of it,” she says.

Recognition fills critical psychological needs

The report found that 83 per cent of Alberta employers still focus on tenure- and milestone-based recognition, with far fewer offering real-time or behavioural-based appreciation. Only one in five companies feel their programs strongly support retention.

Gelseren explains that for recognition to be effective, it must serve a purpose beyond formality or compliance; recognition has deep psychological implications, especially when employees expend significant effort on a task.

“From research, we know that when employees put high effort into projects, and [there is] lack of recognition ... lack of recognition was the second biggest workplace stressor after workload," she says.

"So just by not recognizing them, you could actually do harm to your employees' motivation.”

Recognition, she explains, should be seen through the lens of need fulfilment. When employees put energy and emotional labour into their work, employers need to respond in kind to help replenish those internal resources.

"Every individual, not just employees, but every single person has psychological needs, as well as physiological needs and social needs. And recognition is in essence a mechanism to fulfill employees," says Gulseren.

"When someone puts so much effort into a project, when they really work hard, they use their psychological resources. We need to replenish those resources as soon as possible. Even by saying thank you, or maybe more formal ways of recognizing such as a celebration party, you actually say that 'I see you. I see the effort you put into this project. This is valuable to me.' So it didn't go to waste."

Recognition needs to be personal, not generic

According to the report, 63 per cent of Alberta companies don’t track any metrics to assess their recognition programs, and of those that do, most measure simple outputs like budget use or number of awardees, rather than emotional or cultural impact.

It also found that 66 per cent of Alberta organizations rely on financial incentives to make employees feel valued, while only 13 per cent mention emotionally resonant practices like family-involved or experiential rewards.

Gulseren warns that too often, organizations rely on generic programs that fail to meet employees’ emotional needs. She adds that if not carefully designed, financial or money-based rewards such as company swag, cash or stocks can actually backfire.

"You can make or break, actually, your recognition program," she says.

“From motivational study, we know that cash or monetary rewards do not always motivate people. Sometimes they can demotivate ... the amount of the cash and how it's being presented is important ... if they think the cash amount is not sufficient for the effort that they put in, this could actually be perceived as disrespectful."

Peers are powerful recognition agents

Gulseren emphasizes that recognition doesn’t always have to come from the top. In fact, peer recognition can be more meaningful because colleagues are often closer to the work.

Nearly 70 per cent of Alberta employers say they are exploring peer-to-peer appreciation programs, according to the report, but the majority still centre recognition on manager-led awards or service milestones.

“Most of the time organizations do not give authority for peers to recognize their peers,” she says, adding that because peers are more likely to observe day-to-day performance, their praise is often more accurate.

“Peer to peer recognition doesn't have to be limited to those organizational, structured programs ... they have more opportunities to observe us, so that recognition, in a way, can be more meaningful because it is based on data."

Finally, Gulseren advises that organizations should build shared understanding around what they value and how they recognize it. Training can also help, especially when it encourages employees at all levels to express appreciation.

“Recognition is all about, 'from where I'm looking.' It's all about need fulfillment. So understand what exactly they need, and also understanding the key behaviors that the organization wants to reward,” she says.

"You just want to have a shared understanding of what type of behaviors you want to endorse in your organization ... I think what an organization can do is to train employees - everybody in the organization, not just managers but also peers - on recognition behavior. This is what recognition means. This is why it's important. This is how you can do it. But you're not limited."