If you’ve been at your company long enough, you’ve likely received a fifth-anniversary pin, a branded hoodie, or a shoutout in the team Slack channel. These are all forms of workplace recognition. But not all recognition is created equal. When done well, recognition can do more than just boost morale—it can drive real results.
In a recent webinar hosted by the peer-to-peer recognition platform HeyTaco, researchers Ewelina Forker, assistant professor of accounting and information systems at the Wisconsin School of Business, Adam Presslee (University of Waterloo), and Alex Vandenberg (Gies College of Business) shared insights on how thoughtful recognition programs—especially when paired with well-designed rewards—can significantly improve engagement, performance, and retention.
The Value of Recognition
Recognition programs aren’t just a “nice to have”; they’re proven drivers of employee engagement and loyalty. Many employees report feeling underappreciated, underscoring the need for well-executed recognition strategies. When designed effectively, these programs can enhance helping behaviors, reduce turnover, and foster a greater sense of purpose in the workplace.
How Recognition Drives Engagement
Presslee, an associate professor at the University of Waterloo’s School of Accounting and Finance, outlined three core mechanisms that explain how recognition supports engagement:
- Meaningfulness: Recognition offers social approval and signals career value, reinforcing the significance of one’s work.
- Security: Positive reinforcement contributes to psychological safety and trust in the workplace.
- Self-efficacy: Genuine acknowledgment builds employee confidence, encouraging continued high performance.
According to the panel, the best forms of recognition are those that are meaningful, provide a sense of security, and a sense of control. Providing recognition that builds those three areas can improve employees’ engagement, satisfaction, and long-term outcomes.
“Properly designed rewards paired with that kind of genuine, sincere recognition can really support employees’ sense of internal motivation to contribute to their teams.”
Ewelina Forker
Beyond creating a more positive work environment, effective recognition programs also deliver measurable business benefits. Increased engagement is strongly associated with improved performance, productivity, and retention—outcomes that directly affect a company’s bottom line. Research shared during the webinar highlighted that when organizations invest in thoughtful, consistent recognition, they often see a real return on that investment through higher employee satisfaction and team effectiveness.
Recognition vs. Rewards
While recognition focuses on acknowledging and valuing an employee’s contribution, rewards often introduce an additional layer of motivation, offering tangible incentives for continued positive behavior and performance.
“Properly designed rewards paired with that kind of genuine, sincere recognition can really support employees’ sense of internal motivation to contribute to their teams,” said Forker.
Designing Rewards That Work
A key discussion point of the webinar was the idea of “crowding out,” where extrinsic rewards like money are believed to diminish intrinsic motivation. While popularized by studies in behavioral economics, Forker emphasized that in professional settings, modest, well-designed rewards often enhance rather than undermine motivation.
“With rewards and recognition, the reward really needs to be distinct. Rewards should feel separate from base salary or any kind of normal compensation because we want the rewards to signal that this is a genuine extra,” she explained.
Her recommendations for effective reward design include:
- Less Fungible Options: “A thoughtful gift card or unique piece of merchandise stands out as a special token rather than feeling like just another addition to someone’s paycheck.”
- Hedonic Value: These are fun or indulgent rewards that spark joy and memorability.
- Novelty: Rotating or surprise elements keep recognition engaging.
- Dynamic Framing: “You definitely want to recognize the accomplishments soon after they happen … and you want to frame the program as something that’s evolving rather than fixed.”
The Role of Peer Recognition
The webinar also explored the rising importance of peer-to-peer recognition, especially in collaborative workplaces. Forker shared that frequent, sincere recognition among colleagues strengthens accountability and engagement.
“You want to do it in smaller amounts very frequently,” she advised. “Not huge, giant rewards—just this nice hit all the time so that employees are constantly feeling that recognition whenever they’re doing those positive behaviors.”
She also addressed concerns about program costs: “It really just has to be a small symbolic token of this appreciation. … Maybe it’s a field trip for lunch for the group—something memorable, but not necessarily high-cost.”
A Model for Research–Industry Collaboration
This webinar highlights how Wisconsin School of Business faculty, like Ewelina Forker, are partnering with organizations such as HeyTaco to bring academic research into real-world practice. As Forker and her colleagues continue gathering data for a forthcoming research paper, they’re also leading practitioner-focused webinars to share evidence-based strategies that drive meaningful impact for employees, teams, and overall business performance.