Motivation and emotion/Book/2024/Employee recognition and work motivation

Employee recognition and work motivation:
What is the impact of employee recognition on work motivation?

Multimedia presentation (3 min)

Overview

Happy_Cartoon_Man_Using_A_Smartphone Meet Michael Michael is the managing partner of an accounting firm. He is responsible for a team of eight employees. The firm has a good reputation in the industry. However, things haven’t been running as smoothly as before. He has noticed a steady decline in employee morale. There is a growing sense of frustration in the workplace. Billable hours have dropped significantly. Two key team members resigned, and clients are starting to complain. Michael knows something has to change, but he’s struggling to understand what has happened. Michael is now faced with the challenge of finding a long-term solution. He knows that a strong, motivated team is essential.

Imagine a workplace where things aren’t going well. Morale is low, and employees are quitting. Employees are more than just numbers—they are unique people. What motivates one person might not work for another. Supporting a team means understanding each person. In today's fast-moving world, motivated employees are key to business success. Without motivation, performance drops. A business with an unmotivated team will struggle.

This chapter explores how recognition affects motivation. It looks at key psychological theories and brain research. Readers will learn why recognition is such a strong motivator and how to avoid common mistakes. It also covers current trends and popular employee recognition programs.

This chapter is for anyone leading a business or managing a team. Business owners, executives, HR experts, and team leaders. It is a science-backed, practical guide. The chapter will follow the story of Michael. Michael's story will show how recognition applied effectively can transform team performance.

Focus questions: Can it change employees' behaviour at work? How can you motivate an employee to want to work harder? Why do some employees respond to recognition differently? Can't I just provide my employees with some perks?

Theories and Brain Science

Figure 1. The carrot or stick metaphor. Reward or punishment. Does it work?

Several theories explain how recognition directly influences employee motivation. They explain what forms of recognition are most effective and under what circumstances. This understanding can help leaders become better at motivating their teams. Brain science adds to this by showing how motivation works in the brain. It reveals that much of what drives us happens without us even realising it (Schultz, 2015). Together, these ideas can help leaders create a more motivated and engaged team. This section may provide that "aha" moment – the breakthrough that transforms a team.

Operant Conditioning

Thinking of motivation likely brings up thoughts of reward and punishment. The metaphor of the carrot and stick (See Figure 1) might come to mind. This connection comes from an early approach to motivation, operant conditioning. Behaviour is a function of its consequences (Staddon & Cerutti, 2003). Meaning that behaviour is reinforced through rewards (the carrot) or punishment (the stick).

Ever since, rewards and punishment have become widely adopted. It is a common strategy to increase employee motivation (Reeve, 2018). In the workplace, this is typically in the form of praise or money. Recognising when an employee has exceeded (Susanto et al., 2021). More effort will be put in, if an award is available (Cerasoli et al., 2014).

Common rewards are

• Bonus systems
• Spontaneous praise
• Employee-of-the-month programs
• Sales commission structures

The carrot-and-stick approach does increase work motivation. Condly et al. (2003) found rewards to be a strong predictor of increased productivity. Cerasoli et al. (2014) support this and explain that incentives increase the quantity of performance. But, not the quality of performance. Incentives do not engage employees’ intrinsic motivation. Rewards do not increase workplace satisfaction. Clearly, something is missing (Akafo & Boateng, 2015).

Brain Science Figure 2. The VTA in the human brain is central to the reward system and motivation. Recognition triggers the brain’s reward system, which is a network of well-coordinated brain regions. When this system is activated, it releases Dopamine, signalling to the brain that the behaviour is rewarding. This boosts motivation to repeat the behaviour. The reward systems starts in a brain region called the ventral tegmental area (VTA)(See Figure 2). Where dopamine, the neurotransmitter for pleasure and reward, is produced (Reeve, 2018). The VTA works alongside the amygdala, a key part of the brain that processes emotion. Together they determine the emotional significance of the reward (Camara et al., 2009). The VTA then releases dopamine to the nucleus accumbens (NA). The NA is within the ventral striatum. This is where feelings of pleasure generate. The NA is a critical part of the brain’s reward centre. Feelings of pleasure helps the brain learn what behaviours are rewarding (Camara et al., 2009). The NA extends into the prefrontal cortex (PC) and orbitofrontal cortex (OFC). The PC allows the employee to consciously experience the pleasure. The OFC stores the memory. This ensures the brain will remember what behaviour was rewarded (Reeve, 2018). This process encourages the employee to continue performing well.

Case study in action For years, Michael has relied on rewards, believing they would boost performance and productivity. He recently offered bonuses and pay rises, hoping these incentives would keep employees from leaving. However, the improvement was short-lived, and the employees ended up resigning. What Michael hasn’t addressed are his team’s core psychological needs. While the financial incentives provided a quick boost, they failed to meet the deeper, intrinsic needs for fulfilment, growth, and connection. In the following section, we explore these unmet needs in greater detail.

Test yourself! Quiz 1. Which of the following forms of recognition is a positive reinforcement? Cash bonus Fine Demotion Revoking of privileges

Self Determination Theory

Figure 3. Intrinsically motivated employees.

If recognition activates the brain’s reward system. Which leads to an increase in good behaviour. Why then, doesn’t it increase quality and workplace satisfaction? Because, motivation comes from two sources. External (extrinsic) or from within (intrinsic) (see Figure 3) . Rewards control behaviour and foster extrinsic motivation. When someone is controlled, they perform for external reasons. To feel happy, an employee needs to feel motivated from within. Rewards do not achieve this (Deci, 1972).

Developing motivation from within will increase motivation. Internal motivation drives employees to engage in activities for the love of it. Employees will take a genuine interest in their tasks. They will engage in work out of interest. They are fuelled by personal fulfilment (Ryan & Deci, 2020).

Self-determination theory examines both intrinsic and extrinsic motivation. It shows that intrinsic motivation is key to employee motivation (Deci & Ryan, 2000). People naturally pursue goals that improve their well-being. They have three main needs - competence, relatedness, and autonomy (Ryan & Deci, 2020). These needs require more than just bonuses or praise (Reeve & Lee, 2019).

• Competence means feeling capable and growing.
• Relatedness is about feeling connected to others.
• Autonomy is having control over one’s actions

Competence and autonomy are the most important. When fulfilled, they drive internal motivation (Reeve & Lee, 2019). Internally motivated employees are more productive. They push themselves without constant rewards (Deci & Ryan, 2000).

A study by Good et al. (2022) looked at salespeople's motivation. It found intrinsic motivation impacts performance more than bonuses. It works best for older, experienced workers. Extrinsic motivators work better for younger, less experienced salespeople. This highlights the power of intrinsic motivation, even in an industry fuelled by rewards.

Recognition boosts intrinsic motivation. Though it is external, it helps fulfil core needs (Reeve, 2018).

Brain Science Figure 4. The ACC is the frontal part of the cingulate cortex and involved in influencing motivation. The primary brain regions involved in intrinsic and extrinsic motivation are - The ventral striatum (VS) (reward centre) (Reeve & Lee, 2019) Anterior insular cortex (AIC) Anterior cingulate cortex (ACC) The reward system is also activated in intrinsic motivation. The sense of accomplishment or positive feedback has been found to activate the reward centre (Reeve & Lee, 2019). The AIC is involved in intrinsic motivation. It generates feelings of satisfaction and relates to feeling included. The AIC and VS work together. They process rewards and emotional satisfaction. This is why intrinsic motivation feels deeper and more fulfilling (Reeve & Lee, 2019). The ACC (See Figure 4) handles cost-benefit analysis. It decides if a goal is worth pursuing (Reeve, 2018). The ACC is connected to autonomy. It activates when people feel they have personal choice (Reeve & Lee, 2019).

Case study in action Michael realised that his team needed more than just financial incentives to stay motivated. To boost morale and create lasting motivation, he shifted his focus to what truly drives people from within. He gave his employees more freedom and made a point to recognise their skills and hard work. By addressing his team’s deeper psychological needs, Michael began to see real improvements. His team’s performance improved as they found more meaning and satisfaction in their work. His older, more experienced employees became more engaged, and their motivation increased as they felt their abilities were genuinely valued and appreciated.

Test yourself! Quiz 2. Which of the following rewards would enhance an employee's intrinsic motivation? An annual, programmed pay rise Feedback on how well they handled a difficult work matter Free car parking Chocolate cake in the staff tea room

Need Theory

An additional theory of motivation is need theory. This theory states that employees are motivated by different needs. Power, affiliation, or achievement. Motivation will increase if these needs are met (Rybnicek et al., 2019). To improve team energy, focus on their dominant need. These are summarised in Table 1.

Table 1

Dominant need identification and strategy

Need	Employee Characteristics	Recognition Strategy
Achievement	An employee with a high need for achievement will seek out regular performance feedback and willingly embrace difficult tasks.	Recognise their ability to take on responsibility, face challenges, and manage risks. This will boost their motivation.
Power	Employees with a high power need will regularly seek out leadership responsibilities.	Acknowledge their leadership skills and promote them to positions of influence.
Affiliation	This need will be demonstrated by an employee who regularly seeks out and organises opportunities for team get-togethers.	Recognise them as a valued team member. Affirm their social connections.

Note. Adapted from Osemeke & Adegboyega (2017).

Brain Science The reward system is activated when needs are met. A boost of reputation or feeling acknowledged is a reward. It stimulates the same brain areas as monetary rewards do (Rybnicek et al., 2019). Meeting these needs with recognition is a powerful strategy.

Case study in action Michael identified each team member's dominant need. Achievement, affiliation, or power. He tailored his recognition accordingly. For those driven by achievement, he provided regular feedback. He celebrated their wins. For employees with a need for power, he acknowledged their leadership skills. He gave them a chance to lead. Some employees were good at organizing social events. He highlighted their importance to team cohesion. This made the team feel valued and fostered a stronger sense of belonging. Morale improved and motivation surged. The team became more connected and productive.

Getting it right

Figure 5. Take caution. Recognition can have the opposite effect.

It's important to be cautious at this point (see Figure 5). While the theories and recommendations are backed by science, there are details and factors to consider for these approaches to be applied effectively.

Avoid the Undermining Effect

Leaders must be mindful when giving an employee recognition. Is it an attempt to control the employee? Is the recognition undermining their competence? Is it genuine? Cognitive evaluation theory explains that recognition can backfire. People do not want to feel pressured. Recognition can pressure employees to think, feel or act in a certain way (Deci & Ryan, 2012). If it does, it will reduce the employees internal motivation. Negative or vague recognition is not going to work. Negative recognition leads to feelings of incompetence. Vague recognition lowers self-belief. Avoid tying recognition to goals. Employees may start to doubt its genuineness and reduce their internal motivation for the task (Deci & Ryan, 2012).

It is also possible to over do recognition. Finding the right balance of recognition is key. Too much recognition, employees start to rely on it. It shifts their focus from internal satisfaction to external rewards. This shift can weaken their intrinsic drive (Deci,1972).

Recognition needs to be tailored to the specific task or work involved. It needs to align with the specific nature and demands. A study by Cerasoli et al. (2014) found that the type of motivation depends on the kind of task. For tasks that need creativity or ethical choices, recognition should not be based on extrinsic rewards. This can lower internal motivation and make employees focus on the reward. To keep people more motivated, recognition should target personal growth, learning new skills, and working together. This helps employees stay engaged and driven by their own desire to do well.

Individual Expectations

Employees are driven by what they think they will get out of doing a task. Their motivation will increase only if it's worth their while. They first weigh the expected costs and benefits of a task. Motivation then increases with the value of the calculated outcomes (Riggio & Johnson, 2022; Shweiki, 2015).

Expectancy theory identifies three elements that come into play (Van Eerde & Thierry, 1996). Valence is the value or desirability of the outcome. Instrumentality is the belief in the likelihood that the outcome will happen. Expectancy is the probability that achievement of the task is possible (Riggio & Johnson, 2022).

Effective recognition must take these elements into account. Will the employee value the form of recognition? Is it consistently given and reliable? Can the employee perform a task that will be recognised? The issue is that the calculated outcome is different for each employee. To get this right, consider strategies in Table 2.

Table 2

Working with individual expectancies

Strategy	Considerations
Work out what each employee really values	Recognition must hold value for employees. If it's not perceived as valuable, it can fail to motivate. For example, younger employees might value monetary bonuses. Older employees might prefer meaningful feedback or professional development opportunities.
Be consistent and transparent	Employees need to trust that effort will lead to recognition. If recognition is sporadic, they may doubt whether their efforts will be acknowledged. Organisations should ensure recognition is regular and predictable. This will create a positive link between effort and reward.
Show employees exactly what they need to do to get recognition	Expectancy is the internal belief that they can perform the task. Do they know what it will take, and do they have the skills to achieve it? Employees will increase their efforts if they see a clear link between what they do and what is required. Leaders should clearly communicate tasks and expectations to employees.

Note. Adapted from Riggio and Johnson (2022).

Fairness

A final point to think about is fairness. According to Equity theory, people are more motivated when they feel treated fairly. This feeling of fairness is important for keeping motivation high. The organisation might think they are being fair, but the employee’s perception matters more (Riggio & Johnson, 2022). If an employee feels like they are not valued as much as others, their motivation will go down. But if they feel treated equally to their peers, their motivation will go up. Fairness contributes to a sense of predictability, this helps employees feel like they some control (Al-Zawahreh & Al-Madi, 2012).

Case study in action After learning about the issues with recognition, Michael changed how he approached it. He focused more on personal growth and effort instead of strict goals. This helped keep his team motivated. Michael also made sure recognition matched each employee’s values. He gave them opportunities to grow or offered feedback based on what was important to them. This increased their engagement. By being clear and consistent about what he expected, his team trusted that their hard work would be noticed. Most importantly, he made sure recognition was fair, so everyone felt valued. As a result, morale improved, productivity went up, and clients were happier.

Technology and recognition in the workplace

Michael’s case study shows how hard it can be to keep a small team motivated. Larger organisations, with many locations, have an even tougher time. The increase in remote work adds more challenges. Motivating employees requires new ideas. Technology is helping with this. Tools like blogs, intranet sites, and messaging apps like Slack help keep employees connected (Nayak et al., 2020) . Research by Nayak et al. (2020) shows that recognising employees on social media works well. Technology also lets employees recognise each other, creating new ways to meet their needs.

Online reward and recognition platforms, like Perkbox, Reward Gateway, and Power2Motivate, are becoming popular (Hancock, 2024). These platforms offer quick ways to recognise employees, making them appealing to busy managers. They focus on rewards, praise, and recognition to motivate people. However, Hancock (2024) warns that these programs, while well-meaning, can hurt motivation. They might make recognition feel shallow or like a transaction, which will reduce internal motivation.

Conclusion

This wraps up an exploration of the science behind motivation. It discusses why recognition has a powerful impact on motivation. Recognition is more than just a management tool. It is essential for employee happiness. The main goal for any leader should be to foster internal motivation. Focusing on psychological needs is vital.

Traditional carrot-and-stick methods don’t meet these needs. Recognition must be personalised because employees experience it differently. A one-size-fits-all approach won’t work. New trends, like using technology for social recognition, offer fresh ways to meet employee needs. Popular recognition programs should be used with caution.

Michael’s case study shows how science-based recognition strategies can transform a business. Michael created a team that felt valued and became motivated from within.

Leaders may not always have the time to fully use these strategies. They don’t need to make big changes all at once. By applying these ideas gradually, small improvements can add up over time. Motivation and engagement are ongoing processes. Steady effort can help leaders strengthen their teams and performance.

Employees are human, with unique needs and motivations. The content of this chapter provides insights for effective recognition approaches. However, recognition shouldn't just be a management strategy. Employees and team members will naturally increase their effort and motivation if recognition is integrated into the natural dynamics of the workplace. Everyone wants to be seen and valued.

Final test yourself! Quiz 3. Which of the following forms of recognition would be the easiest to implement? A sincere thank you to an employee over email A shout out to the team celebrating a win over morning tea Saying well done to a team member for going the extra mile All of the above

See also

• Employee motivation (Wikipedia)
• Employee recognition (Wikipedia)
• Organisational change motivation (Book chapter, 2019)
• Workplace motivation (Book chapter, 2013)
• Workplace motivation and autonomy (Book chapter, 2015)

References

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Al-Zawahreh, A., & Al-Madi, F. (2012). The utility of equity theory in enhancing organizational effectiveness. European Journal of Economics, Finance and Administrative Sciences, 46(3), 159-169. https://www.researchgate.net/publication/267783009_The_Utility_of_Equity_Theory_in_Enhancing_Organizational_Effectiveness

Camara, E., Rodriguez-Fornells, A., Ye, Z., & Munte, T. F. (2009). Reward networks in the brain as captured by connectivity measures. Frontiers in Neuroscience, 3, 350-362. https://doi.org/10.3389/neuro.01.034.2009

Cerasoli, C. P., Nicklin, J. M., & Ford, M. T. (2014). Intrinsic motivation and extrinsic incentives jointly predict performance: a 40-year meta-analysis. Psychological Bulletin, 140(4), 980-1008. https://doi.org/10.1037/a0035661

Condly, S. J., Clark, R. E., & Stolovitch, H. D. (2003). The Effects of Incentives on Workplace Performance: A Meta-analytic Review of Research Studies. Performance Improvement Quarterly, 16(3), 46-63. https://doi.org/10.1111/j.1937-8327.2003.tb00287.x

Deci, E. L. (1972). The effects of contingent and noncontingent rewards and controls on intrinsic motivation. Organizational Behavior and Human Performance, 8(2), 217-229. https://doi.org/10.1016/0030-5073(72)90047-5

Deci, E. L., & Ryan, R. M. (2000). The “What” and “Why” of Goal Pursuits: Human Needs and the Self-Determination of Behavior. Psychological Inquiry, 11(4), 227-268. https://doi.org/10.1207/S15327965PLI1104_01

Deci, E. L., & Ryan, R. M. (2012). Self-Determination Theory. In P. A. M. Van Lange, E. T. Higgins, & A. W. Kruglanski (Eds.), Handbook of Theories of Social Psychology. SAGE Publications Ltd. http://digital.casalini.it/9781446269008

Good, V., Hughes, D. E., Kirca, A. H., & McGrath, S. (2022). A self-determination theory-based meta-analysis on the differential effects of intrinsic and extrinsic motivation on salesperson performance. Journal of the Academy of Marketing Science, 50(3), 586-614. https://doi.org/10.1007/s11747-021-00827-6

Hancock, P. (2024). Employee recognition programmes: An immanent critique. Organization, 31(2), 381-401. https://doi.org/10.1177/13505084221098244

Long, R. J., & Shields, J. L. (2010). From pay to praise? Non-cash employee recognition in Canadian and Australian firms. The International Journal of Human Resource Management, 21(8), 1145-1172. https://doi.org/10.1080/09585192.2010.483840

Nayak, B. C., Nayak, G. K., & Jena, D. (2020). Social recognition and employee engagement: The effect of social media in organizations. International Journal of Engineering Business Management,12, 1-12. https://doi.org/10.1177/1847979020975109

Osemeke, M., & Adegboyega, S. (2017). Critical Review and Comparism between Maslow, Herzberg and McClelland's Theory of Needs. Funai Journal of Accounting, Business and Finance, 1(1), 161-173. https://doi.org/https://api.semanticscholar.org/CorpusID:199426282

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Reeve, J., & Lee, W. (2019). A neuroscientific perspective on basic psychological needs. Journal of Personality, 87(1), 102-114. https://doi.org/10.1111/jopy.12390

Riggio, R. E., & Johnson, S. K. (2022). Introduction to Industrial/Organizational Psychology (8 ed.). Routledge.

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Ryan, R. M., & Deci, E. L. (2020). Intrinsic and extrinsic motivation from a self-determination theory perspective: Definitions, theory, practices, and future directions. Contemporary Educational Psychology, 61. https://doi.org/10.1016/j.cedpsych.2020.101860

Rybnicek, R., Bergner, S., & Gutschelhofer, A. (2019). How individual needs influence motivation effects: a neuroscientific study on McClelland’s need theory. Review of Managerial Science, 13, 443-482. https://doi.org/10.1007/s11846-017-0252-1

Schultz, W. (2015). Neuronal Reward and Decision Signals: From Theories to Data. Physiological Reviews, 95(3), 853-951. https://doi.org/10.1152/physrev.00023.2014

Shweiki, E., Martin, N. D., Beekley, A. C., Jenoff, J. S., Koenig, G. J., Kaulback, K. R., Lindenbaum, G. A., Patel, P. H., Rosen, M. M., Weinstein, M. S., Zubair, M. H., & Cohen, M. J. (2015). Applying Expectancy Theory to residency training: proposing opportunities to understand resident motivation and enhance residency training. Advances in Medical Education and Practice, 6, 339-346. https://doi.org/10.2147/AMEP.S76587</

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Susanto, S., Lim, B., Linda, T., Tarigan, S. A., & Wijaya, E. (2021). Antecedents Employee Performance: A Perspective Reinforcement Theory. Journal of Industrial Engineering & Management Research, 2(4), 1-14. https://doi.org/10.7777/jiemar.v2i4

Van Eerde, W., & Thierry, H. (1996). Vroom's Expectancy Models and Work-Related Criteria: A Meta-Analysis. Journal of Applied Psychology, 81(5), 575-586. https://doi.org/10.1037/0021-9010.81.5.575

External links

• AHRI quarterly Australian work outlook - March quarter 2024 (Australian HR Institute)
• An introductory guide to employee recognition (Perkbox)
• Employers’ experiences with retention issues (Australian Government)
• Feeling seen, heard, and understood in the workplace, leaders - are you listening or re-loading? (Psychology Today)
• How to develop an effective employee retention strategy guide (Xero)
• Operant Conditioning: what it is and its usefulness in the workplace (Brad Sugars.com)
• The future of work - what workers want: Winning the war for talent (PricewaterhouseCoopers)