01 May 2025

8 ways employee rewards and recognition impact company culture

Employee rewards and recognition play a critical role in building and evolving workplace cultures.

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A strategic approach to reward and recognition not only fosters high performance and contributes to business objectives, but sets a good foundation for greater collaboration, enhanced colleague connections and an environment whereby employees feel seen, heard and respected. 

Here are just some of the ways that prioritising employee rewards and recognition in your business can positively impact your workplace culture, and in doing so, boost your employees: 

1. Boosts employee morale and performance

Employee engagement, productivity and performance are 14% higher in organisations with recognition programmes than those without. 

This is because formalised recognition programmes provide employees with a clear focus and sense of purpose, alongside the knowledge that they have real opportunities to be acknowledged and celebrated for their contributions by the business and their peers. 

This equal opportunity for appreciation gives individuals a positive incentive to tackle work with determination and push themselves to new heights, helping build a high-performance culture. 

2. Encourages confidence and innovation

Highlighting and celebrating people’s achievements with meaningful rewards reinforces acts of brilliance, moments of innovation and special milestones.

This positive reinforcement gives employees assurance that they’re doing a good job and that they’re valued as individuals, giving them the confidence to continue their efforts and take even more pride in their work.

Doing this regularly helps create an atmosphere of energy, empowerment and innovation where individuals are championed for their proactivity and forward-thinking. 

3. Enhances team spirit

Seven out of ten (70%) of employees highlight the importance of emotional connections at work.

Reward and recognition schemes help meet employees’ emotional needs, while improving collaboration.

This is done through peer-to-peer appreciationwhich empowers employees across the business to celebrate their teammates’ and, in doing so, makes colleague achievements from other areas of the business more visible.

This helps create a culture whereby recognition is fair and inclusive, helping break down cross-departmental barriers and create more opportunities for employees to connect. 

4. Improves employee attraction and retention

With more employees valuing a sense of purpose and emotional connections at work, workplace cultures that embrace rewards and recognition are incredibly attractive to potential new hires in today’s competitive job market.

In fact, 38% of employees say the benefits, reward and recognition scheme outlined was crucial to them accepting a job offer.

But beyond that, regular rewards and recognition helps maintain a supportive, appreciative culture that employees continue to feel connected too long after they’ve been onboarded.

Plus, long service awards are a specific employee reward that certainly contribute to boosting retention.

5. Reinforces business objectives and values

Employee rewards and recognition should be strategically aligned to your business’ objectives, mission and values – all of which are key pillars of your workplace culture.

Doing this means that employees are recognised for the ways in which they align with your culture and contribute to business success, helping reinforce the behaviours, beliefs and goals your business stands for and build a stronger, more cohesive workplace culture.  

6. Improves mental health and wellbeing

Feeling undervalued and disconnected at work can have a significant impact on people’s mental health, causing stress, anxiety and low mood.

Personal, authentic recognition and rewards can counteract this.

Recognising people for their individual achievements and milestones, as well as giving employees the chance to publicly appreciate their peers, shows people that they’re personally valued and seen as individuals.

This appreciation builds a sense of unity and belonging within your culture, while giving employees regular morale boosts, all of which creates an environment where employee wellbeing can thrive. 

7. Supports cultural evolution

Companies develop over time, inevitably experiencing shifts in behaviours and attitudes along the way.

Employee rewards and recognition can be truly valuable in helping employees adapt to these changes, by reinforcing new values, goals and strategies.

Rewards and recognition schemes can act as a guide for employees and pivot if/when your business does, accelerating the evolution of the company culture.

This is hugely beneficial as it helps people grow with your business and feel part of the journey while still encouraging them to strive toward a common goal.  

8. Enhances employee engagement

Consistent employee recognition and rewards help keep morale, motivation and job satisfaction high, building a workplace culture where individuals feel valued for their efforts and connected to their peers.

When aligned to your business’ mission, purpose and values, rewards and recognition also connect employees to a shared vision which ultimately strengthens their commitment and enthusiasm for your business.

The result is higher employee engagement. How you deliver recognition and rewards is important though.

Personalisation and timing is key and, if not considered, can be the difference between boosting or weakening your workplace culture.

Supplied by REBA Associate Member, Boostworks

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