Can Rewards & Recognition Transform the Emotional Economy of Work?

Recognition isn’t just about rewards—it’s about relationships. Organizations need more than competitive salaries to retain top talent; people need to feel that they're there for more than just their paychecks. Organizations must create a culture where employees feel valued, recognized, and emotionally invested. And how can we do that? 

It's all about how employees' emotional experiences shape their commitment, productivity, and loyalty. Research shows that employees who feel recognized and appreciated are much more engaged and innovative and less likely to lose their jobs. To understand the importance of the emotional economy of work, SHRM hosted a webinar with AdvantageClub.ai to capture insights from industry leaders on leveraging rewards and recognition to drive organizational loyalty. The webinar on "𝑇ℎ𝑒 𝐸𝑚𝑜𝑡𝑖𝑜𝑛𝑎𝑙 𝐸𝑐𝑜𝑛𝑜𝑚𝑦 𝑜𝑓 𝑊𝑜𝑟𝑘: 𝐿𝑒𝑣𝑒𝑟𝑎𝑔𝑖𝑛𝑔 𝑅&𝑅 𝑡𝑜 𝐷𝑟𝑖𝑣𝑒 𝑂𝑟𝑔𝑎𝑛𝑖𝑧𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝐿𝑜𝑦𝑎𝑙𝑡𝑦” featured:

• Amir Bharwani, CHRO at IGT Solutions

• Meenakshi Cornelius, HR Head, India Cluster at JLL

• Smiti Bhatt Deorah, Co-Founder & COO of AdvantageClub.ai

• Tanishqa Arora, Knowledge Advisor at SHRM India (Moderator)

Industry experts came together to discuss the emotional drivers of recognition and  how strategic R&R can boost retention, productivity, and emotional fulfillment in the workplace 

The Power of Recognition

Recognition is a powerful emotional driver, of course. A small thank-you note or a formal acknowledgment of efforts can go a long way in driving employee engagement. Employees want to feel appreciated for their efforts, and being acknowledged motivates them. Sometimes, organizations still view recognition as a formality rather than a strategic tool they want to invest in for engagement and retention. 

Meenakshi discussed the importance of creating a sense of belongingness and value among employees. She noted, "Recognition creates or fosters a sense of belongingness for employees. It makes them feel valued and acknowledged, which boosts their morale and motivation."

Rewards come to those who put their positive qualities into action. Being trusted with responsibility is one of the most meaningful forms of recognition, deeply resonating with individuals.

Key Emotional Drivers of Recognition

1. Sense of Belongingness: Recognition creates a sense of belongingness, making employees feel like they have significant contributions to make to their team and organization. This emotional connection enhances their overall engagement and builds a sense of commitment. As Smriti aptly put it, "The future of R&R lies in creating a holistic and inclusive approach that caters to the diverse needs of the workforce."

2. Acknowledgement of Efforts: Employers often fail to appreciate and validate employees' efforts, which gives them a sense of purpose and meaning and reinforces their motivation and dedication.

3. Feeling Valued: Recognition makes employees feel valued and appreciated, boosting their self-esteem and morale and encouraging them to excel in their roles. 

4. Trust and Loyalty: Employees are committed and loyal when recognition becomes regular. They feel valued, which fosters trust, creating a win-win situation where they grow and organizations reap enhanced performance benefits.

5. Psychological Safety: Recognition contributes to psychological safety, providing emotional security and encouraging employees to take risks and innovate without fear of failure.

The 3 E’s for Impactful Programs

1. Emphasize by understanding your audience.

2. Empower employees to choose rewards.

3. Enable a people-powered ecosystem.

The Future of Employee Recognition

Companies are moving towards flexible reward options. Instead of one-size-fits-all gym memberships or annual checkup plans, organizations are offering a basket of options that employees can choose from based on their needs. Recognition programs are expanding to include blue-collar, gray-collar, contract workers, and gig economy employees. As Smriti highlights, "More companies are moving towards recognizing not just white-collar employees but also blue-collar, gray-collar, contract workers, and the gig economy."

For experienced employees, recognition should be more purpose-driven, focusing on meaningful work and significant projects.

Meenakshi aptly said, "Recognition for experienced employees should be more purpose-driven and aligned with significant projects." 

Amir highlighted the significance of experiential rewards. He explained that rewards such as event passes, adventure trips or even a simple lunch with a manager can create lasting memories and a deeper connection to the organization. "Experiential rewards work really well because they create lasting memories and a deeper connection to the organization," he said.