Being recognized and valued at work are crucial factors that drive engagement and performance. While compensation is significant, it is not sufficient on its own, as many employees who receive fair compensation still don’t feel appreciated.
Organizations invest heavily in rewards to foster a sense of value, which can amount to hundreds or thousands of dollars per employee annually. These reward programs often include both monetary and non-monetary incentives like televisions or gift cards.
However, due to cost optimization efforts, there is a growing trend of moving away from non-monetary rewards, if not altogether from rewards. For instance, a $100 gift card for an employee actually costs the company around $130 due to taxes. Moreover, when given the choice between $800 in cash or a $1,100 TV, many would prefer cash.
Non-monetary rewards have subjective value and limit the recipient’s control over the reward. Considering potential cost savings, I generally support transitioning to cash-based awards for employees, but that is a separate topic for discussion.
Apart from compensation and rewards, the most significant factor in feeling appreciated is when employees have firsthand experiences of appreciation—those small moments when someone thanks them, celebrates their birthday or work anniversary, or acknowledges their achievements or assistance to others.
The significance of expressing gratitude and appreciation in both personal and professional contexts. It highlights several key points:
- People who show gratitude are perceived as more warm, competent, and caring. Moreover, those who are thanked tend to go the extra mile in their work.
- Gratitude has physiological effects. A study found that teams where gratitude was expressed experienced no cardiovascular stress response during a challenging task, unlike teams where gratitude was absent.
- When expressing gratitude, it is important to acknowledge the other person’s contributions and how they have impacted not only you but also the overall situation. For example, thanking someone for stepping in at the last minute for a meeting shows appreciation for their effort.
- Genuine gratitude should be expressed when it is truly felt, and it should be specific to the actions or behaviors of the person being thanked. Pretending to feel more gratitude than one actually does is unnecessary.
- Publicly expressing gratitude signals to others that the grateful person recognizes and acknowledges the contributions of others. It also portrays the person being thanked as generous, creating interest and a willingness to help them.
While compensation and rewards are important, they alone may not make employees feel valued or appreciated. To foster these feelings on a larger scale, organizations should establish a culture of appreciation, where everyday expressions of gratitude are encouraged within teams.
To facilitate this, organizations can provide “smart” nudges that suggest the right actions at the right time and with the right audience, making it easier for individuals to express appreciation and gratitude.
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