Employee recognition, the untapped superpower – why gratitude is good for business

In today’s competitive and fast-paced business landscape, Australian employers are constantly on the lookout for ways to drive workplace success. Although employee recognition has long been recognised as an essential part of organisational success, its true potential remains largely untapped. This is significant because Indeed’s 2030 Better Work, Better Lives survey determined that wanting to feel appreciated and valued at work is a main concern of Australian workers. Let’s delve into the importance of showing gratitude to your team, the science behind it, and the far-reaching effects of appreciation in the workplace.

Why is employee recognition important?

The days of traditional command and control structures in the workplace are long gone. Today’s workforce thrives on employee appreciation, empowerment and a sense of purpose – something to keep in mind when getting your people management skills ready for the post-Covid era. According to a workplace survey by the Australian HR Institute, almost three-quarters of respondents (72.9%) identified inadequate rewards and recognition as a significant psychosocial hazard at work. For decision-makers and employers, embracing a new paradigm of gratitude and recognition can therefore unleash unprecedented levels of engagement, motivation and productivity among their employees.

Dr Lea Walters, a researcher on gratitude in the workplace, found that gratitude is responsible for almost 25% of job satisfaction and is linked to higher levels of optimism, better work relationships and greater commitment to the company mission and strategic direction. In the same vein, a study by researchers at the Wharton School of the University of Pennsylvania found that grateful leaders motivated employees to become more productive. But do we truly understand why that is?

The neuroscience of gratitude and its impact on employee morale and productivity

Scientific research offers compelling insights into the neuroscience of gratitude and its profound impact on performance and wellbeing. When employees feel genuinely appreciated, their brains release neurotransmitters such as dopamine and serotonin, boosting happiness, morale and overall job satisfaction. Also, let’s not forget that employee wellbeing is business wellbeing!

Moreover, gratitude stimulates the prefrontal cortex, the brain region responsible for critical thinking, problem-solving and decision-making. This means recognising and acknowledging your employees' efforts activates their cognitive abilities, leading to increased productivity, innovative thinking and improved decision-making within your organisation.

What’s more, studies have shown that practising gratitude curbs the use of words expressing negative emotions and shifts inner attention away from such negative emotions as resentment and envy – making it an ideal concept to be promoted in the workplace.

The ripple effect of showing gratitude amplifies organisational success

Ultimately, the entire organisational framework benefits from this new neural knowledge. Corporate rewards and recognition programs that foster opportunities to express gratitude and recognition have been found to improve the overall psychological capital of the workforce.

That’s because employee recognition goes far beyond individual motivation. Rather, it ripples through the entire company, amplifying its overall success. When decision-makers prioritise gratitude and recognition, a positive feedback loop is created. Employees who feel valued and appreciated often end up becoming ambassadors for their company, attracting top talent and fostering a collaborative and supportive work culture.

How can you show gratitude?

Rather than viewing gratitude and recognition as mere gestures of politeness, we can redefine them as powerful tools for transforming workplace dynamics. By acknowledging and celebrating employees' unique strengths, contributions and achievements, decision-makers create an ecosystem of appreciation and empowerment that fosters loyalty, inspires creativity and drives extraordinary results.

Recognition programs

It’s no secret that recognition programs that encourage employee appreciation enhance teamwork and cohesion. For example, Australian HR Institute research has found that symbolic awards, such as certificates and public recognition, can help nurture employee satisfaction, productivity and retention. Another positive effect is a reduction in staff turnover, with companies with a solid employee recognition strategy recording a 31% lower voluntary turnover rate than those without.

By empowering employees to acknowledge and celebrate each other's achievements, decision-makers have the opportunity to foster a sense of community and shared purpose, driving organisational growth. Inspiration can be drawn from successful examples such as the Atlassian ‘Kudos’ program, where staff can publicly recognise their colleagues’ efforts. Another Australian flagship company recognised for its successful employee recognition strategy is the specialist insurer Youi, which received the 2021 Australian HR Award for the best employee rewards and recognition program. The company uses a gamification platform called YourGame, which helps employees to track their own achievements and celebrate milestones in a fun and engaging way.

By openly demonstrating gratitude and recognition at all levels, decision-makers can inspire a sense of pride, motivation and loyalty among their employees, creating a positive and high-performing work environment.

Informal expressions of appreciation

Although formal recognition programs are powerful and effective, informal expressions of gratitude are just as important. This can be as simple as an email recognising a particular achievement, or a handwritten thank-you note. Such tokens of appreciation can come from the CEO or a peer.

The Happier, Healthier Professionals project measured the impact of personalised letters of appreciation that contained messages of positive feedback from managers to their team. It was found that after one month, those who received a letter ‘reported feeling significantly more valued, more recognised for their work and more supported by their organisation than those who didn’t receive a letter’.

Tailored approaches to employee recognition

While generic recognition efforts may provide a temporary boost, true transformative power seems to lie in custom approaches. Corporate decision-makers are well advised to embrace the unique preferences and motivations of their employees when designing recognition strategies.

Consider implementing personalised recognition initiatives that align with your staff’s aspirations, values and strengths. Whether you choose to show appreciation by offering free development opportunities, flexible working arrangements, free lunches, a gym membership, staff childcare or even on-premise pool tables and rock climbing walls – to name just a few creative incentive ideas – or a more traditional bonus payment or public acknowledgement of accomplishments, customised recognition helps create a strong sense of connection among your team. This, in turn, can motivate them to strive for excellence and make a long-term commitment to your company.

Become a champion of gratitude

Gratitude and recognition can’t flourish in a vacuum. Executives need to lead by example and become champions of appreciation within their organisations. When leaders actively engage in recognising and appreciating employees, this sets the tone for a culture of gratitude throughout the company.

By embracing a fresh perspective and unleashing the potential of appreciation, employers can revolutionise workplace dynamics. Shifting from command and control to a culture of gratitude and empowerment has the potential to unlock extraordinary levels of engagement, motivation and productivity in organisations.

Remember the human factor

Recognition and equality are key variables involved in the employee/employer relationship, and organisations failing to reward employees through adequate recognition and appreciation are potentially undermining employee commitment. Research shows that, even more than better pay, what primarily drives much higher levels of happiness and engagement is being recognised when something has been done well. This means that the Australian business landscape has the potential to redefine workplace dynamics and drive unprecedented success by shifting priorities to the human factor. Decision-makers have the opportunity to unleash the power of gratitude and employee recognition to fuel engagement, enhance performance and amplify their organisational success.

In a nutshell: don’t underestimate the importance of showing gratitude to your team because gratitude affects your business right down to your bottom line.