5 reasons you can't afford NOT to have a recognition program

Recognition & Rewards
July 31, 2019

When you work in a department with a fixed budget for people processes it can be difficult to get granted more of what you need without a good argument. Recently we were speaking with a client who, in part, said: “…originally we had thought we didn’t have the budget for our employee recognition program, but after careful consideration, we realized we couldn’t afford NOT to have the program in place.”

What exactly did he mean by this? This got us here at Qarrot thinking, what are the reasons it makes more financial sense to have a program for employee recognition? Are rewards not enough?

Employee recognition when done well can have an extremely positive return on investment. Here are 5 areas of your business that can be negatively affected without recognition.


Employee engagement, or the commitment your employees have to your organizational goals is the biggest area of concern. The topic of employee engagement gets a lot of attention in HR departments, with team leaders and management in general. When employees become disengaged, their productivity lowers, meaning they don’t invest as much effort into their work. This can have a costly impact on revenue generation, customer satisfaction, and loyalty. When you focus on recognizing employees for their contributions and accomplishments, you boost morale and motivate better work creating a healthier overall work environment for employees.


Your ability to retain good employees is critical. Not only is recruiting and onboarding expensive, but high turnover impacts the morale of the remaining employees, causes lost productivity and organizational knowledge. If employees don’t receive regular recognition, chances are they will feel underappreciated. An unappreciated employee could feel they don’t offer value to their organization and eventually move on to somewhere they are recognized for their efforts. Manager recognition and peer-to-peer recognition should be an ongoing practice. Similarly, if an employee doesn’t receive regular constructive feedback from their manager, they may think their time and effort isn’t appreciated, or worse, worth it. Employee recognition fosters appreciation and can go a long way to retaining the employees you have.


Recognition programs do more than just recognize the value an employee offers through their work, they also reinforce how an employee lives the values established by your company culture. This creates a sense of loyalty amongst your employees and makes them more likely to respond favorably when opportunities for advancement are offered. This works well with your succession plan. What’s more is that when you encourage a culture of appreciation, the importance of behavioral recruiting becomes evident. Hiring the best candidate based on both performance and culture-fit helps ensure they will enjoy working with your company longer.


Lack of recognition can dampen motivation and is a factor in employees becoming disengaged. Employees who have been recognized for their positive behavior are more likely to exhibit those behaviors again. Incentivizing achievement through recognition can go a long way in motivating an employee to bring their best efforts to work each day. Employees appreciate when their efforts are recognized. This open dialogue also encourages communication inspiring employees to offer their ideas and suggestions. Innovative and collaborative cultures are breeding grounds for enthusiasm. Enthusiastic employees are highly motivated to set and achieve goals, both for themselves and the company as a whole.


Employee recognition programs with leaderboards play directly to the competitive nature of the sales environment. Offering incentives such as prizes or rewards to motivate sales teams is a common practice in many organizations but fiduciary recognition isn’t the only motivator in a sales department. Anyone can sell some of the time, but successful sales departments have to perform consistently. One bad month can kill overall company profits and send your shareholders into a tailspin. Recognizing sales achievements and employees that meet or exceed their goals is the best motivator there is.

In short, not recognizing your employees’ milestones can affect an organization's bottom line in a variety of ways. Disengaged, unmotivated, uncommitted employees who do not feel valued will never give you their best work no matter how much you reward them. While rewards can certainly provide short-term motivation, they do not generally drive long-term engagement.

Your best option is to develop a recognition program that combines both rewards and recognition. Ready to see how our Qarrot can help boost your organizational success?

Book a demo or download our Guide to Launching Your First Employee Recognition Program.
The Team at Qarrot