The Hidden Cost of Poor Employee Recognition — And What to Do About It

November 18, 2025

Article Summary:

Many organizations are bad at employee recognition, leading to lower engagement, decreased morale, and higher turnover. This article notes the impacts of employee recognition and offers practical approaches for effective employee recognition.

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Thomas puts in a ton of hard work on a project, including personal sacrifices to get it done on time. The reactions from his colleagues and manager? Crickets. They’re too busy, too caught up in their own bubbles. For Thomas, there’s nothing worse than being taken for granted that way. But it’s par for the course.

It’s a common occurrence in organizations near and far. And probably in yours too.

Leaders, your workers are longing for more recognition. And you’d be wise to oblige.

“There are two things people want more than sex and money—recognition and praise.”
-Mary Kay Ash, founder, Mary Kay Inc.

Too often, employee recognition is infrequent. (Or nonexistent.) Another trap: it smacks of favoritism. Or it’s lame—often because it doesn’t involve a wide array of people in designing and implementing it.

“The deepest hunger of the human soul is to be recognized, valued, appreciated, and understood.”
-Stephen R. Covey, Primary Greatness: The 12 Levers of Success

Leadership Derailers Assessment

Take this assessment to identify what’s inhibiting your leadership effectiveness. It will help you develop self-awareness and identify ways to improve your leadership.

The Benefits of Employee Recognition

There are many benefits that come from recognizing people generously, frequently, and thoughtfully (i.e., from effective employee recognition). Doing so is likely to lead to positive effects on many things in your workplace, including:

alignment (when the recognition connects their work more directly to the shared purpose, values, vision, goals, strategy, etc.)
belonging
culture
customer satisfaction
effort (“a genuine ‘thank you’ from those in the corner offices can ignite a 69% increase in the likelihood of employees bringing their extra effort to the work floor.” Source: Great Place to Work)
engagement (workers are 2.7 times more likely to be highly engaged when they believe they’ll be recognized, according to a Quantum Workplace report)
innovation and new ideas (workers who consistently feel recognized at work were 2.2 times more likely to drive innovation and bring new ideas forward; source: Great Place to Work)
job satisfaction
loyalty
morale (via fun, camaraderie, and a collective sense of pride)
motivation
productivity
retention
work quality (when workers were asked what the most important thing their manager or company does that causes them to produce great work more often, the top answer—from 37%—was “recognize me”; source: Great Place to Work)

“Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise.
They’re absolutely free and worth a fortune.”
-Sam Walton, founder, Walmart and Sam’s Club

Effective employee recognition practices also prevent problems, including:

absenteeism
burnout
frustration (organizations that have employee recognition programs in place experience 29% lower frustration levels than those lacking them, according to the SHRM/Globoforce Employee Recognition Survey)
stress
turnover (workers cite lack of recognition as one of the top reasons they leave jobs; according to a Quantum Workplace report, “Organizations with formal employee recognition programs have 31% less voluntary turnover than organizations that don’t have any program at all,” and they’re much more likely to have strong business outcomes.)

Personal Values Exercise

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Lack of Employee Recognition

Too often, leaders don’t realize just how important recognition is to their team.

Many workplaces lack heart, energy, and connection. Teams lack a sense of solidarity and shared purpose. The daily work is flat and joyless. That’s a major loss, considering how much of our lives we devote to our jobs.

Many workers don’t feel valued or appreciated. In his book, The Power of Mattering, author Zach Mercurio calls the “affirmation gap.”

Consider the following:

52.5% of workers want more recognition from their manager and 41% want more recognition from their coworkers. (Source: BambooHR/Quantum Workplace “Recognition in the Workplace” report.)
35% of workers report that their managers have never thanked them. (1)
“the top three factors employees cited as reasons for quitting were that they didn’t feel valued by their organizations (54%) or their managers (52%) or because they didn’t feel a sense of belonging at work (51%).” (2)
only one-third of workers say that their contributions are acknowledged. (3)

The desire for more recognition cuts across positions and levels. According to a Quantum Workplace report, the percent of employees wanting more recognition is:

47% for directors and above
58% for managers
50% for individual contributors

Clearly, there’s a mismatch between the supply and demand of workplace recognition. So, how can you address that?

How to Recognize Employees Effectively

When it comes to recognizing employees, the sky’s the limit. There are so many options. Employee recognition can be big or small, formal or informal, public or private. It can be focused on achievement or behavior.

Effective Employee Recognition Checklist for Managers

Use this checklist to determine which ones you’re doing well and which ones you could improve:

Employee Recognition Practice	Not Doing Yet	Could Improve	Doing Well
Birthday or work anniversary acknowledgments
Bonuses
Bulletin boards
Certificates for accomplishments
Creative and fun gifts
Employee-of-the-Month displays
Extra time off
Features of workers in organizational blogs or videos
Gift cards
Handwritten, personalized thank-you notes
Meals (celebration lunches or dinners)
Newsletter recognition or shout-outs
Personal visits from executives
Peer-to-peer recognition programs
Professional development opportunities
Promotions
Public praise during team meetings
Recognition walls
Salary increases
Social media shout-outs
Spot awards
Verbal recognition during one-on-one meetings

Alignment Scorecard

When organizations aren’t aligned, it can reduce performance dramatically and cause frustration and dysfunction. With this Alignment Scorecard, you can assess your organization’s level of alignment and make plans for improving it.

Employee Recognition Best Practices

Though there are many ways to go about employee recognition, not all ways are effective. Ideally, the recognition should be:

specific
relevant
timely
individualized (e.g., meaningful and memorable to that person)
connected to the organization’s shared purpose, values, vision, and culture
multi-level (coming from different levels and departments)
varied (to keep it interesting)

“One of the more common complaints about recognition is that it’s far too often highly predictable, mundane, and impersonal. A one-size-fits-all approach to recognition feels insincere, forced, and thoughtless. Bureaucratic and routine recognition, along with most incentive systems, doesn’t make anyone very excited. Over time, they can even increase cynicism and damage credibility.” -James Kouzes and Barry Posner, The Leadership Challenge

You want to be proactive and generous with the recognition, but it must always be sincere. Give recognition when it’s deserved. Don’t overdo it, lest it become cheap or meaningless. (By far, though, the bigger problem is that too many managers and workers are stingy with recognition and praise.)

Conclusion

Unfortunately, so many managers and workplaces are bad at recognition (and often oblivious to that fact). It’s part of what makes the experience of working so lame for so many. It’s an enormous problem. And the benefits of getting better at it are immense.

Ultimately, shoot to create what Gallup calls a “recognition-rich environment.” What you really want to build is a culture of appreciation—not just a program or a couple of ad hoc actions.

When leaders make recognition personal, consistent, and even a little fun, it becomes a cornerstone of a thriving culture. Effective leaders intentionally create cultures where effort is noticed and accomplishments are honored. Leaders who prioritize recognition foster teams that feel valued, energized, and committed. The payoff of effective employee recognition far exceeds the investment.

Have fun with it—and see how big a difference it will make for so many.
–Gregg