The importance of recognition in wellbeing at work

Recognition at work is important for people’s wellbeing, and can also improve productivity.

But where should that recognition come from, and in what form? Should it be formal or informal? What should a recognition program look like?

And why do you need to understand the difference between hedonic and eudaimonic rewards?

It’s also important to explore any potential drawbacks of recognition at work.

Let’s take a closer look at recognition and wellbeing.

And here’s what they are.

Watch the first video in this series here:

Part 1 – Why Physical Health Matters for Wellbeing at Work

And watch the previous video here:

Part 8 – Managing Workplace Stress: Causes, Symptoms and Strategies

And if you know of anyone who would benefit from this video, please share it with them.

Video Transcript

Why recognition is important in the workplace

Hi, Andrew from SACS and welcome to video number nine in our series on wellbeing at work.

So far in this series we’ve talked about a range of positives associated with wellbeing at work.

We’ve talked about physical health and wellbeing, happiness.

We talked at length about engagement in four videos, engagement being a positive psychological state which increases people’s wellbeing and productivity. We then talked about resilience and the last video was all about stress.

But this one’s about recognition.

So recognition is important for people. Recognition causes us to feel that we belong and it also gives us positive self-image.

When people are recognised by other people, it affects the way that they view themselves and it affects their wellbeing in a positive sense, but it also creates a situation where they can be more productive.

Recognition from whom?

One of the first things that we have to consider is recognition from whom?

Different people will have different effects on our wellbeing. So our colleagues – do they have a significant effect on our well being? Our local leader? Organisational leadership, like the chief executive?

It turns out the more proximal the recognition is, the better in terms of people’s wellbeing.

Now, what do I mean by proximal? If we’re being recognised by people that we are close to, which means that we’re being recognised by our colleagues, our local leader, that tends to have a bigger impact because culture is local.

Organisational culture is affected by the team effect. In other words, if we’re in a team where things are working well, that will have an 80% effect on our wellbeing.

If we’re in a team where things are working poorly, then that will have a negative 80% impact on our wellbeing.

So the rest of it, the organisation, the context, even outsiders have an impact of about 20% on our wellbeing. So the local team is absolutely crucial.

So recognition processes that ignore the recognition of local colleagues, people that we work with every day and whom we respect, they don’t tend to work as well.

I’m not saying you don’t have the big boss style recognition process, but if that’s all you’ve got, then that’s not going to work as well as having recognition at the local level.

Informal vs formal recognition

Now, recognition tends to happen in two forms.

One is informal, where if you’ve got a leader who’s just inclined to catch you doing something right. Hey Bill, I think you did a fantastic job that way. Mary, I just really want to thank you for the quality of the report you just gave me.

That kind of stuff is recognition, particularly if it’s shared amongst colleagues.

So you know that when you get this recognition, other people know that you’re getting it as well. That can be very powerful.

Types of formal recognition

But the second is the formal recognition process.

And the formal recognition process might be an employee of the month kind of thing, or it might be an annual performance award or a quality award or something like that. Both can have an effect.

But it’s the informal, which happens a lot, that’s likely to have the greatest effect.

And if you’re going to have a formal process, why not have a combination?

Say 80% of the recognition comes from local, so the people who work around this person, but 20% organisational.

Which is to say maybe there’s a good reason, therefore, to have something like a chief executive’s award or an organisational recognition award.

Now the question is, are there any consequences of recognition?

Which is to say, you can have warm feelings, so I get the satisfaction of knowing that my colleagues are recognising me or some chief executive or some other organisational leadership process.

That’s good, and that has a significant effect.

But some organisations will give money for these kinds of things. Others will use a point-based system.

And this refers to an organisation called “Brownie Points”, which offers technology where you can accumulate a certain number of brownie points by virtue of getting recognition from colleagues.

When you get enough of those, you can turn them into products or experiences. So it may well be that you have a target number of brownie points that you accumulate.

And once you accumulate those, it might mean that you get an appliance or you can get some sort of an experience like a voucher that will allow you to go hot air ballooning or something of that nature.

Increasingly, we’re seeing things like charity donations. So people who are really seeking to use their recognition in a positive way.

If they get these recognition points, then rather than taking them for something that will be for themselves, they will volunteer that.

So they might give money to their favourite charity or perhaps volunteer their time to a favourite charity and get time off in order to do that.

But yes, time off is often used in recognition programs. You do a great job and so maybe you get half a day off or something like that.

But increasingly we’re also seeing learning and development options.

Potential consequences of recognition

Now, it’s crucial to ensure that the offer matches the organization’s value proposition or the reward might be counterproductive.

And we mentioned the Dutch kindergartens effect here. Just to explain the Dutch kindergartens effect, in Holland, preschools and kindergartens noticed that many parents didn’t come in time to pick up their children.

So let’s say you’re supposed to pick up your children at 4:00 or 5:00 or something like that, people came late.

And so they decided that they would introduce a penalty for this, that if you came late, you would have to pay a certain amount of money over in addition to what you would normally pay. And the thought was that this would discourage people from turning up late, they would turn up on time more.

In fact, perhaps oddly, they found exactly the opposite to be true, because the parents felt that they were paying for a privilege, they actually felt, all right, well, I’m going to be half an hour late.

It’s going to cost me X number of euros, I’ll do that. And so they found a contrary perspective to what they were hoping for.

If you reward the wrong thing or you recognise for the wrong thing, you run the risk of achieving the same negative outcome.

That is to say, if you’ve got recognition programs that sponsor competitiveness between your staff, that’s fine, provided that that’s your corporate culture.

If, on the other hand, you’ve got a corporate culture which is all about collaboration and working together, then sponsoring a recognition program at an individual level where people compete with each other to get recognition, may not be as effective as sponsoring team-based recognition, where you’re really rewarding teams for having collaborated more effectively.

Because, as the old saying goes, what gets measured often gets done, but in particular, what gets recognised is much more likely to get done.

So think through what you’re really hoping to achieve with your recognition program before you embark on it.

Because good recognition programs can enhance wellbeing. But bad recognition programs can actually cause a reduction in levels of wellbeing at an individual and a group level.

The difference between hedonic and eudaimonic rewards

There are two types of rewards and this comes from ancient Greek thinking and it’s as true now as it was 100, 200 years BC.

The two forms are hedonic and eudaimonic.

Hedonic means pleasurable experiences. So, for instance, I get time off.

Pleasurable experiences could be I get the opportunity to go with a Red Balloon, voucher, I’m going to some nice dinner with my family or something like that.

That’s a hedonic experience.

The alternative is eudaimonic, and eudaimonic is all about meaning and purpose.

A hedonic pleasure is something where you experience something that is fun or joyful. A eudaimonic experience is something where you experience something that’s meaningful.

So that could be you get the opportunity to learn something new. It could be that you get an opportunity to explore an area of work that you haven’t previously been involved in.

It could be an opportunity to do something generous. So, for instance, you get time off to participate in a corporate volunteering program, let’s say. Virtue.

In other words, you get a chance to make some contribution, which may be that you run some sort of a charity process and get the satisfaction out of that.

Often in recognition programs, people emphasise the hedonic, the pleasurable experience, but they kind of almost forget the eudaimonic.

I mean, there will be some employees who will far prefer to go on a training program that helps them to enhance their skills, much more than they would to get a personal satisfaction of a dinner out or something like that.

The alternative might be an opportunity to help colleagues and to be recognised for helping colleagues.

Maybe that’s a recognition process that would appeal to certain people who are, let’s say, more generous in their perspective. And there are such people.

Building a recognition and rewards program

So further considerations if you’re going to have a recognition program, do you want to brand it in some way?

Do you want to call it the Phoenix Award, or will it be an ongoing process or campaign-based governance?

Staff have the right to award sometimes, in other words, you may totally turn over to staff. Yes, this individual is our preferred employee of the month, and we’ll all vote for that.

Others will say, no, we don’t want the risk of collusion or something like that.

So maybe we’re going to put in place a situation where you need to have your votes approved by some person in authority.

And the question is how you’ll design the process. And I think that this is one area where it’s a really good idea to ensure that people are empowered.

Now, there are a number of options.

One of them is that you’ve got to decide the strategic intent of the exercise.

What are we really trying to achieve from this recognition program, if it’s a formal one? Is it profit? Is it customer satisfaction, growth, employee wellbeing? Some combination of the above.

One of the things that you might like to do is to develop a governance group to run the project to ensure that the project achieves what it needs to for the organisation.

And that may well also include ground rules. So the budget, whether the staff contributions need to be signed off.

Getting staff to design your program

But I’m going to suggest that one of the most powerful things that you can do is to develop a representative staff advisory group.

A representative staff advisory group is where you run a nomination process to get people to recommend people that they think should be involved in developing the staff recognition process.

And so the staff recognition process group would look like this. We get people to nominate colleagues who they think would do a good job.

Now, you’ll notice in this previous slide (refer to the video), I said nominees, not volunteers. Nominees tend to work far better than volunteers.

Volunteers, often people who are self-recommending, often have an axe to grind, or they don’t like their day job or whatever. They’re certainly not representative of their colleagues.

And to identify that, all you need to do is to ask for volunteers, you’ll find that you often get a small group and it might often be people who volunteer for a lot of things.

The alternative is to say, nominate somebody. When somebody is nominated, and you would copy them in to say that they’re nominated so that they can decline if they don’t want to be nominated. I find, by the way, very few people do that.

But when people are nominated, they bring an entirely different mindset to the process. Using nominees in these kinds of change exercises is vastly more successful than using volunteers.

Nominees tend to be more representative of their colleagues. They tend to be people who have the benefit of both their colleagues and the organisation at heart.

And people choose wisely I find, in general, when they do this exercise.

Unbossing your staff rewards

But then what you do is you use this nominated group to help you build the recognition program. This is a form of unbossing.

You’re saying, we will give the employees the opportunity to build this thing.

That’s going to mean that they will be engaged with it rather than something that’s cooked up by the C suite in consultation and amongst a group of executives let’s say.

So when you’re designing things, the governance group can insist on certain ground rules, the things that are not negotiable.

Then facilitate a group to decide what the ideal recognition scheme would look like and that destination approach can be very powerful to cause a project to run well.

And then facilitate them to think what they think the recognition should be for, what they consider to be important.

I mean, is it teamwork? Is it productivity? Is it whatever?

And then if rewards are part of the ground rules, in other words there will be a concept of the fact that these recognition processes – maybe you’ve decided to embrace the technology which allows you to do this which many organisations do these days – if you do this, what sorts of rewards would be helpful?

Is it time off? Is it toasters? Whatever.

Giving people an opportunity to tell you what they think will work makes it far more likely the process will work and then maybe get them to name it.

If they want to name it then that could be a useful thing.

And again deciding whether it should be annual, ongoing, project-based, there are many options for that.

So recognition can be an important part of people’s wellbeing, I’m suggesting that leaders need to be taught how to achieve recognition on an informal ongoing basis and that can be very powerful.

That’s 80% of people’s wellbeing but also we know that recognition schemes which are more structured, which maybe use a technology, which gives rewards which people can access, that can be very powerful as well and if you use staff to design it, it’s far more likely that that’s going to be successful and people will engage in it and see the value.

But as well as that, it’s also much more likely to be representative of what the staff want.

So that’s the last in this series of videos.

I hope that it’s been helpful to you.

Check back to see the previous videos if you’re interested and thanks very much for spending some time with us today.

Watch the first video in this series to find out more about wellbeing at work:

Part 1 – Why Physical Health Matters for Wellbeing at Work

And watch the previous video here:

Part 8 – Managing Workplace Stress: Causes, Symptoms and Strategies

And if you’d like some help to measure and improve your staff wellbeing, contact us about our Employee Wellbeing Surveys and our Employee Engagement Surveys.

SACS Consulting
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