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The Connection Between Employee Recognition and Retention

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The Connection Between Employee Recognition and Retention

Employee recognition has never been more critical than today, owing to the current marketplace scenario. Considering the knock-on effect of the Great Resignation and “quiet quitting,” human resources teams have started prioritising employee recognition. 

It is essential for employers to:

  • Recognise employers for their contributions

  • Make them feel connected to their work, and

  • Boost morale

But what benefit would it do? Precisely, the collective energy of these factors leads to employee retention. This blog lays out the connection between employee recognition and retention.

Before we proceed, if your organisation isn’t still aware of the potential of an employee recognition program or looking to optimize your current strategy, read our previous blog to understand How to Build an Employee Recognition Program that Inspires and Motivates.

Employee Recognition: What it is & its importance?

Recognising employees is acknowledging and letting your staff know their work and contributions are appreciated. Moreover, it aims to make the workplace feel more engaging and inclusive. 

You will be closer to realising your team’s full potential if you acknowledge their work regularly. And this act would result in employees staying loyal to the organisation. 

A little recognition goes a long way, and you’ll find:

  • Happier team 

  • Motivated & highly competent employees

  • Increased employee retention

However, they will likely lose interest if someone doesn’t feel appreciated while performing their job. Adding more to the woes, it’s hard for employees to gain a sense of accomplishment and value in their work. 

Connection Between Employee Recognition & Retention

A recent Great Place To Work survey found that employee recognition was most important to 37% of employees. In addition, teams scoring in the top 20% of engagement experience 59% fewer turnovers. 

Unfortunately, a good number of organisations still fail to recognise their employees. As a consequence, people cease to give their best output. On the contrary, if employees are satisfied with their jobs, they become more enthusiastic about their work

RELATED READ:The Employee Productivity-Happiness Loop: How One Influences the Other

A culture of periodic recognition and small gestures goes a long way and facilitates retaining top talent. Understand it with an example:

George works at XYZ organisation and works toward fulfilling his personal growth and organisational goals. Additionally, he takes charge of giving his best and motivates his team to do the same. However, his Manager, Jenny, never recognises his efforts and performance and dismisses his ideas publicly. But she tries incorporating those ideas into her team’s functions under her name. George initially tries communicating his issues to Jenny but starts losing interest. Consequently, he takes leaves and ignores what is being done as a team. On top, he starts seeking better job opportunities. 

What do you infer from the example? Without any doubt, the organisation won’t be able to retain George. So, here employee retention is directly proportional to the recognition George gets. The higher the appreciation and praise, the better it is for employers and employees.  

Tips to Make Employee Recognition Programs Effective for Better Retention

#1. Be specific and clear

Employees always relate to meaningful recognition that is tied to a specific accomplishment. For instance, hitting a sales benchmark can be considered a metric to measure performance. This approach will motivate them to repeat appreciated behaviours to perform better. 

#2. Be creative

Appreciation should go beyond just thanking an employee for their performance. Think creatively and understand what appreciation means to your people. More importantly, it should not only include cash rewards. You must understand what matters the most to your employees and devise a program. For example, employees can be rewarded with opportunities to upskill themselves through online courses, mentorship programs, or networking events.

Alternatively, you can offer them to work flexibly or give them an extra day off to spend with their family. The market also sees organisations providing discount coupons or membership cards. 

#3. Be consistent

Act promptly. Don’t wait for the year-end event to recognise your employees for a thing they achieved six months back. Mainly, recognition seems more meaningful to employees when given in time. Ensure appreciating great performers timely by having formal systems in place, and you will never have to let go of a star employee abruptly. 


The importance of employee recognition boils down to the need for one-on-one connection. Admittedly, sustaining a culture of recognition fosters employee retention.

Tom Rath, an American consultant on employee engagement, strengths, and well-being and author, spoke about the potential of employee recognition.

Employees who report receiving recognition and praise within the last seven days show increased productivity, get higher scores from customers, and have better safety records. They're just more engaged at work.

Employee recognition isn’t a single-stage function— it’s a company-wide strategy for everyone. 

Repeat after us:

Recognise. Acknowledge. Celebrate the differences in each other. Foster a harmonious workplace.



1. Why is employee recognition important for retention?

Recognition is an effective way to retain employees. Organisations that recognise their people’s roles and performance will likely have highly motivated and passionate employees. Recognised employees are happier and stick around for an extended period. Therefore, employers can expect their businesses to operate smoothly and make profits.

2. How can an organization recognize and retain its employees?

The best methods for organisations to recognise and retain their employees are:

  • Allow employees to speak their minds

  • Show appreciation & respect

  • Encourage input and feedback

  • Identify high performers and appreciate them

  • Don’t micromanage

  • Offer growth opportunities to the employees

  • Provide flexibility