As organizations experience or brace for potential economic impact, HR and leadership teams’ budgets are tightening, and every investment is under scrutiny, including those related to rewards and recognition (R&R) programs. However, when pressures increase to deliver organizational cost savings and defend the value of every budget line item, we must hold firm that recognition is not a luxury, but a strategic imperative.

When employees are recognized, they are more engaged, motivated, and resilient, all of which are critical to navigating uncertainty. This blog explores how recognition can serve as a buffer against the negative effects of economic disruption, create a competitive advantage, and why investing in it is not just compassionate, but essential.

Build the habit of recognition

According to an Awardco and Texas A&M University Study, employees who gave out at least 94 recognitions (across 2022) were 26% more likely than others to receive the highest possible rating for the results they deliver, and 32% more likely to receive 5 out of 5 points for being difficult to replace. The effects are even larger for those who provide recognition to a large number of different coworkers (43 or more). In terms of results and difficulty to replace, these “super praisers” were respectively 28% and 54% more likely to be rated at the maximum level. 

If you're new to recognition, aiming for 94 instances a year might seem overwhelming. The good news is that the key to building a recognition habit is simply to begin. To build momentum, try starting small, make sure recognition is timely, encourage managers to lead by example, integrate recognition into existing workflows and tools, recognize in the moment, and share recognition publicly to model the behaviour and increase visibility.

Continually reinforce values  

In times of economic transition, it’s important to update and communicate organizational values that reflect current priorities, such as operational excellence, agility or innovation. Recognition efforts should spotlight individuals who embody these values daily. 

Storytelling and visibility are key to behavioural reinforcement. Use internal communication tools, such as company intranets, Slack or Teams integrations, social feeds, value aligned awards, or newsletters to publicly recognize achievements and model ideal behaviours.

Example: A value like “Operational Efficiency” can be reinforced and promote vicarious learning across your employee base  (Bandura, Social Learning Theory) by recognizing employees who reduce turnaround times or improve process flow. These key players who embody the values that are imperative to success in today’s climate, specific to your organization’s constraints and priorities,  provide an example to serve as a signal or beacon to others of what is important and what they should strive to emulate.

Double down on non-monetary recognition

When budgets are limited, non-monetary recognition becomes even more important. According to research by Great Place To Work, companies on the Fortune 100 Best Companies to Work For list consistently outperform the market and achieve higher revenue per employee. This suggests a strong correlation between a positive employee experience and financial success.

Non monetary forms of appreciation are affordable, scalable, and effective levers to enhance employee experience when delivered authentically.  Despite popular thinking, non-monetary recognition is just as powerful (if not more powerful) than monetary recognition, in fact “Non-cash recognition increases productivity by up to 14%”. (McKinsey & Company)

• Peer-to-peer recognition programs
• Leadership shoutouts in all-hands meetings
• Personalized thank-you messages or team spotlight features

Create cultural rituals and community

Amid economic pressures, it’s easy to lose sight of community and culture. Recognition can anchor employees to a shared sense of purpose, and a community of trust and belonging. According to the World Economic Forum, “Global employees trust business more than government - and are demanding more from employers, too.” 

Combat uncertainty and negative noise by “catching people” doing great work:

• Celebrate team milestones and wins—even small ones.
• Promote positivity by highlighting “bright spots.”
• Encourage peer-to-peer recognition through simple shout-outs and digital tools.
• Integrate regular “thank yous” and appreciation into team meetings.

Belonging is one of the top predictors of engagement and retention during high-stress periods. (BetterUp Research)

Reward development and learning initiatives

Upskilling is vital in a resource constrained environment. When confronted with difficult rightsizing decisions, you need your employees to be willing to stretch, adapt and bridge gaps. Use recognition to reinforce participation in professional development initiatives such as:

• AI literacy programs
• Lean Six Sigma certifications
• Cross-training between departments
• Stretch assignments or rotations
• Certifications or designations that are priorities for your organization 

Recognize and reward those who demonstrate a growth mindset and adopt new skills aligned with future business needs.

Benefit 1: Keep your best performers 

Layoffs and organizational changes can trigger voluntary turnover, especially among high performers. Strategic recognition efforts aligned to business value drivers help reinforce loyalty and purpose. Recognition increases employees’ sense of security and appreciation during uncertain times, making them less likely to seek external opportunities

Gallup found that employees who receive meaningful recognition are 45% less likely to leave their jobs. 

According to an Awardco and Texas A&M University Study, when 67% of the recognitions a team received (in 2022) were public, that team had a 19% drop in turnover levels.

Benefit 2: Incentivize performance (without spending more) 

When performance matters most, recognition can be leveraged to drive critical business behaviours. Organizations can use their recognition platforms to incentivize and reward:

• Cost-saving initiatives
• Process optimization
• Customer retention efforts
• Revenue-generating behaviours

By aligning recognition with business goals, companies reinforce the right performance  and associated outcomes. “Companies with strategic recognition programs report a 23.4% increase in performance outcomes.” (SHRM/Globoforce Report)

Pairing recognition with platforms like Workday allows leaders to tie recognition to real-time performance data. Tracking recognition throughout the year also provides a holistic employee view and specific examples to use in performance conversations. The tracking, transparency and credibility of R&R programs can help HR identify high performers over time as well as during high-stress periods.

Consider overlaying recognition with performance data to determine your organization’s unique recipe for driving success - ex. Do Managers that recognize their employees 10x a year have higher performing team members? Higher rates of promotions? A higher eNPS score? Less attrition?

Benefit 3: Higher engagement and resilience

Recognition isn’t just about morale, it’s a psychological need. When employees feel seen and appreciated, their anxiety decreases (how am I doing?) and intrinsic motivation increases, leading to better performance and improved mental wellbeing. Especially during tumultuous and uncertain times, it is crucial that we consistently cultivate resilience. 

93% of employees who feel valued say they are motivated to do their best work (American Psychological Association).

Conclusion: Recognition is a powerful business strategy 

In times of uncertainty, recognition isn’t just a morale boost, it’s a strategic imperative. When used intentionally, R&R programs reinforce key values, reward mission-critical behaviours, and help companies retain top talent through turbulence.

Leaders who continue to invest in and model recognition, especially during downturns signal trust, build resilience, and ultimately position their organizations for a stronger rebound.

Call to Action

HR teams and executive leaders should assess current recognition strategies and ask:

• Are we recognizing the behaviours that matter most right now?
• Are we recognizing frequently and utilizing multiple channels?
• How are we spotlighting value-aligned contributions?
• What low-cost, high-impact recognition tools can we scale?

Now is the time to shift recognition from discretionary to essential. Want to learn more about how you can partner with Awardco to strengthen your rewards and recognition sstrategy? Connect with us https://www.awardco.com/contact

New to recognition and don’t know where to start? The Awardco Centre of Excellence (COE) can help. Our team is made up of seasoned practitioners—professionals who have designed and executed recognition programs in partnership with multiple vendors across several Fortune 500 companies. Alongside them, our subject matter experts serve as strategic consultants, bringing a wealth of best practices, benchmarking insights, and thought leadership, all grounded in our guiding philosophy: the power in the proven.