We have discussed motivating employees through job design and by the extrinsic rewards of pay and benefits. On an organizational level, are those the only ways to motivate employees? Not at all! We would be remiss if we overlooked intrinsic rewards organizations can provide, such as employee recognition programs. Let’s start with an example. Laura makes $8.50 per hour working at her fast-food job in Pensacola, Florida, and the job isn’t very challenging or interesting. Yet Laura talks enthusiastically about the job, her boss, and the company that employs her. “What I like is the fact that Guy [her supervisor] appreciates the effort I make. He compliments me regularly in front of the other people on my shift, and I’ve been chosen Employee of the Month twice in the past six months. Did you see my picture on that plaque on the wall?”

Organizations are increasingly realizing what Laura knows: Recognition programs increase an employee’s intrinsic motivation for work. An employee recognition program is a plan to encourage specific behaviors by formally appreciating specific employee contributions. Employee recognition programs range from a spontaneous and private thank-you to widely publicized formal programs in which the procedures for attaining recognition are clearly identified.

A few years ago, 1,500 employees were surveyed in a variety of work settings to find out what they considered the most powerful workplace motivator. Their response? Recognition, recognition, and more recognition. Other research suggests financial incentives may be more motivating in the short term, but in the long run nonfinancial incentives work best.89 Surprisingly, there is not a lot of research on the motivational outcomes or global usage of employee recognition programs. However, studies indicated that employee recognition programs are associated with self-esteem, self-efficacy, and job satisfaction,90 and the broader outcomes from intrinsic motivation are well documented.

An obvious advantage of recognition programs is that they are inexpensive: praise is free!91 With or without financial rewards, they can be highly motivating to employees. Despite the increased popularity of such programs, though, critics argue they are highly susceptible to political manipulation by management. When applied to jobs for which performance factors are relatively objective, such as sales, recognition programs are likely to be perceived by employees as fair. In most jobs, however, performance criteria aren’t self-evident, which allows managers to manipulate the system and recognize their favorites. Abuse can undermine the value of recognition programs and demoralize employees. Therefore, where formal recognition programs are used, care must be taken to ensure fairness. Where they are not, it is important to motivate employees by consistently recognizing their performance efforts.