The human desire for recognition starts early. Watch a third-grader beam at the gold star on a spelling paper, or a high-schooler triumphantly clutch a sports trophy.
In the workplace, that recognition takes many forms. Sometimes it's a quiet thank you, other times a bonus or a public award. Either way, it is a gesture that employers ignore at their peril.
So important is recognition that employee-appreciation programs are turning into a veritable industry, with national and even international organizations helping firms reward workers for a job well done.
Companies spend more than $1 billion annually on employee service awards, according to the Promotional Products Association International. Dozens of firms, large and small, even employ a manager to handle corporate recognition. At Cargill Inc., the title is chief recognition officer. At Intel, it is corporate recognition manager. Business books feature titles such as "Hug Your People" and "The Power of Appreciation in Business."
"If everyone was treated with respect and courtesy from the beginning, we wouldn't need this industry," says Christi Gibson, executive director of Recognition Professionals International in Naperville, Ill. She notes that in a survey of 10,000 employees from Fortune 1,000 companies, a lack of recognition was a major reason for leaving a job.
Roy Saunderson, president of the Recognition Management Institute in London, Ontario, finds impersonalization in the workplace. "Managers are walking by and not acknowledging employees or saying their name," he says.
Determined not to fit in that category, Dion McInnis takes what he calls a "morning walkaround" through his department at the University of Houston-Clear Lake. It gives him an opportunity to visit briefly with each person, offering anything from a simple hello to a question about work to a chat about what is going on in their lives. "It reminds them that I appreciate who they are," says Mr. McInnis, an associate vice president handling fundraising and relationship-building.
In addition to his daily walkaround, McInnis takes his staff to a nearby ice cream shop several times a year. On annual reviews, he states his appreciation for each person's work. He also uses meetings and e-mails to offer personalized thank-you's.
According to WorldatWork, three-quarters of US companies give tangible rewards such as certificates and plaques, 60 percent give cash, and half give gift certificates.
Some recent examples:
•At a medical practice in Austin, Texas, gestures of thanks include quarterly companywide activities such as bowling night or a night at the ball park.
•Last month at Dean College in Franklin, Mass., senior managers surprised the staff with a visit from a local ice cream vendor to thank them for their hard work during a student orientation session. The school also has a formal recognition program, along with employee awards.
Yet deciding how to honor individual workers can be challenging. There are now four generations in the workforce, ranging from the "silent" generation of World War II to Millennials in their 20s.
"Recognizing everyone in the same way is not going to work," Ms. Gibson says. "Some people love to be recognized in an awards gala in front of the whole company. If you did that to someone who doesn't like to be in front of a crowd, that would be worse than firing them." To avoid jealousy among workers, companies must give awards on the basis of specific behaviors and achievements. "It can't be a popularity contest," she says.
Baby boomers like to be pampered. As they retire, Gibson says, "Employers have to start thinking of how they're going to recognize them."
Managers sometimes complain that Millennials need immediate reinforcement. "It's a generation that grew up being lavished with praise from Mom and Dad, and some have the same kind of expectation at work," Mr. Saunderson says. "They want to hear praise on a more frequent basis."
Whatever the generation, gratitude has a powerful effect. "It's really an ego booster when our employer takes the time to praise us with a simple 'Attaboy' or 'Your work is great,'" says Josh Bunch, assistant creative director at Brainstorm Marketing in Des Moines, Iowa. Other rewards at the firm include movie tickets, a paid day off on a birthday, and a trip to Kansas City in appreciation for a project.
Whether recognition is formal or informal, it must be aligned with an organization's culture and values – its mission and vision, Saunderson says.
"Sometimes people get caught up in thinking that recognition has to be things," he says. "It can be. But it can be just respecting people, looking at what their ambitions and career aspirations are, and understanding their personal and family lives."
A year ago, Saunderson's son had a car accident. "My boss said, 'Roy, don't even think about work.' To have that kind of support meant the world to me. In an indirect way, that was recognition."
Making employees feel valued also increases productivity and profitability, Gibson says. Satisfied workers produce satisfied customers and a stronger bottom line. That also reduces costly turnover.
Noting the power of appreciation and praise, Michal Ann Strahilevitz, a marketing professor at Golden Gate University in San Francisco, says, "Taking the time out to say 'great job' does not cost anything but a few moments of one's time. So many managers go out of their way to let employees know what they are doing wrong. Yet appreciation most definitely affects morale. In a down economy, praise is a great tool for improving morale without spending a fortune."