EFFECTIVE LEADERSHIPThe Business Case for Employee Recognition: Turning Data Into Development
by Steve SonnenbergTraining Industry Weekly
For years, indeed since the beginning of the modern workplace, employee recognition has been treated as a human resource (HR) perk, something akin to a nice-to-have gesture that sits outside the scope of “real” perks and return on investment (ROI)-driving initiatives. However, the numbers tell a different story: Recognition actually drives measurable gains in engagement, performance, retention and more.
The challenge for leaders is to both understand and prove that recognition works, and how to make it part of everyday development.
Because recognition isn’t just about feeling appreciated. It’s about reinforcing learning, motivating growth and shaping culture through behavior. When recognition becomes part of how people are trained, coached, led and motivated, it transforms from a token gesture into a performance multiplier and organizational driver of productivity. Let’s dive in.
Recognition Fuels Engagement and Learning
Let’s paint a picture: global engagement is at an all-time low, hovering around 21% in 2024, according to Gallup. That’s not only a culture problem, it’s an organizational challenge that’s having real implications for business outcomes, including learning and development (L&D). Learning and motivation both stick when people are emotionally invested in their work, and there’s almost no better way to ensure investment and engagement than regular recognition.
Consider the facts that employees who strongly agree that recognition is important to their organization’s culture are 3.7x more likely to be engaged, and teams with high levels of engagement are 21% more profitable. But so what? How can learning leaders utilize this insight? One simple takeaway is to embed recognition into the entire development lifecycle to begin seeing the benefits early.
Recognition can build employees early by reinforcing skills learned, anchoring coaching conversations in positive feedback and transforming check-ins into moments that celebrate growth and progress.
What can you do now? Build recognition checkpoints into development programs, celebrate and acknowledge when new skills or learnings are applied, and model behavior to all employees. It’s a simple method to bring about major results.
Recognition Reduces Turnover by Creating Emotional Connection
In any organization, turnover is a regrettable but unavoidable cost of doing business. However, it is also one of the most expensive forms of corporate waste. Replacing a single employee can cost up to twice their annual salary, and retention continues to be a top concern for leaders everywhere.
The truth is simple yet powerful: Recognition reduces voluntary turnover by creating a culture of belonging and growth. For example, Awardco’s client Quick Quack Car Wash was struggling with high turnover before they implemented a company-wide recognition solution. Employees treated their job as a waystation to something better, and culture was suffering as a result.
After creating a strategy of recognition, their turnover rate dropped by 20% and culture improved dramatically, creating a better place to work for everyone. Why? Because recognition and retention are about human connection, and while human connection isn’t on the balance sheet, the impact of it is felt across every line item.
Learning leaders can include recognition as a core skill in leadership training, teaching managers how to give feedback and recognition that is timely, sincere and specific. Show leaders the power of recognition and help them model this behaviour to employees, and watch how culture changes.
Recognition Strengthens Culture and Drives Performance
Culture, as mentioned, isn’t on the balance sheet. It can perhaps be thought of as a type of “shadow curriculum” that teaches employees how things really work — what gets rewarded, what gets ignored and what matters most to leaders. It’s a powerful driver of many outcomes, yet too many organizations allow culture to be created by accident instead of through intentional strategy.
Recognition is how culture gets reinforced in real time. It showcases what matters to the organization.
Recognition is how culture gets reinforced in real time. It showcases what matters to the organization. Indeed, consider the adage “what gets rewarded gets repeated,” and recognition is in and of itself an emotional reward. Employees who experience regular, authentic appreciation are five times more likely to feel connected to company culture and three times more loyal to their organization, according to Gallup. Coincidence? Definitely not.
But culture doesn’t improve through slogans, it improves through habits. That’s where learning leaders play a vital role.
Learning programs can use recognition as a mechanism to:
- Spotlight cultural wins during onboarding and training.
- Encourage peer-to-peer appreciation to build community.
- Celebrate micro-behaviors that align with company values (not just big achievements).
When culture and recognition align, training doesn’t feel like compliance, it feels more like belonging and becomes an important way to build culture right from the get-go. Learning leaders can design recognition moments around the organization’s values. For example, if collaboration is a value, create a “team impact” recognition category. If innovation matters, recognize experimentation even when it doesn’t lead to immediate success.
Tying It All Together
The data on recognition is compelling, but numbers alone won’t create change. The opportunity for leaders in this space is to translate recognition into a learning practice – something that drives growth and goodwill.
When learning leaders make recognition part of their development programs, they improve morale and capability in tandem. They teach managers how to see people. They teach employees how to notice effort in others. They create a feedback-rich environment where learning thrives naturally.
Recognition doesn’t compete with development, it completes it.
The Real Return on Employee Recognition
It’s time to change the way we work. By investing in effective employee rewards and recognition, you can create a workplace where employees feel valued and seen, and where work isn’t just a paycheck anymore. It’s a place where employees put in their best efforts because they know those efforts are valued and will be appreciated time and time again – and those best efforts drive more ROI than anything else.
And that doesn’t sound like a “nice to have” function. It sounds like the keystone of success.
About the Author
Steve Sonnenberg is the co-founder and CEO of Awardco, an employee recognition platform serving over 5 million users across 163 countries. By partnering with Amazon Business, he reimagined employee rewards with more impact and less cost.
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