employee recognition
Nov 22'

Unlocking the Power of Engagement: Is Employee Recognition Part of an Exchange?

Previous - Part One: Discretionary effort and employee engagement 

Recognition and rewards are a part of everyday life and both are things we learn early in life. Our teachers and parents recognize when we are doing something right and reinforce it with praise and sometimes a reward. This is the way we learn to participate in society and within groups of people. Also, this form of transaction is common within sports teams, personal relationships and especially, workgroups. Whether it is from our manager or other leader, our earliest work experience reinforces that the way to be noticed is to perform our activities in a manner that gets positively recognized while avoiding mistakes that receive a negative response. That is really an exchange that occurs daily across the workplace. In effect, ‘if you give me this, I give you that’ action leads to recognition. We all work to earn the recognition (even if some of us are embarrassed to receive it publicly).

employee recognition

A transaction requires at least two parties. However, when the transaction involves a relationship or an intangible exchange, each person needs to play their part. If one party doesn’t play their part, the exchange is disrupted. In the company workplace environment, the management team sets expectations, deliverables and goals. The next step is where the exchange starts. Once the employee understands what action is needed they can work to achieve the objective. However, if they exceed the goal, then the employee has an expectation to be noticed (the first step of the exchange). Therefore, performing a task well leads to recognition if the managers acknowledge (the second requirement of the exchange). Cause and effect with the recognition as the currency or payment. Miss something from this equation and the exchange breaks, employees feel unvalued and the culture suffers.

An effective recognition program should be a balance between company-wide/ formal, department/ informal and spontaneous/ day-to-day (Punke, 2013 and Saunderson, 2004). Each of these has a different impact to the exchange between the employer and employee (Journal of Education and Practice, 2016):

  • Company-wide/formal: Structured program where employees are recognized based on clearly defined goals that are aligned to values. This exchange often is based on major achievements including years of service or employee of the year and involves a higher-value reward.
  • Department/informal: These are usually performance-based exchanges when a goal is accomplished such as personal sales objectives, monthly production achieved or team-based objectives. The exchange typically involves a lower value reward than the formal recognition.
  • Spontaneous/day-to-day: Positive, ad hoc and social recognitions that require timely and frequent acknowledgement for on-the-spot observations. This exchange can be low or no-cost rewards for good work.

Traditionally, managers were expected to be the primary drivers of providing employee recognition; however, ‘Few managers consistently receive recognition themselves, which makes it hard to know expectations or how to give it” (Saunderson, 2004). This results in an inconsistent application of an effective recognition program and by extension, a challenge to the company’s culture.

Employee recognition

Another problem that many companies are struggling with is the lack of capacity in the management team. Stretched beyond their ability, managers lack the ability to view every employee’s contribution. As an effective exchange requires a timely recognition, like the tree falling in the forest, someone needs to be there to see that it happens.

How does the company minimize the chance that good work is recognized, especially when managers are overwhelmed? The answer is building a rewards and recognition program that includes the effective participation by the entire workforce. In effect, unlocking the power of engagement through peer-to-peer recognition. 

Next in series - Part Three: How peer-to-peer recognition impacts engagement (coming soon...)


  • Punke, H. (2013). Best Practices for Developing an Employee Recognition Program
  • Saunderson, R. (2004). Survey findings of the effectiveness of employee recognition in the public sector.
  • Journal of Education and Practice Making Employee Recognition a Tool for Achieving Improved Performance Vol.7, No.34, 2016
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