Artificial intelligence has transformed the way we work, doubling in adoption over the last two years and reshaping how organizations operate, communicate, and drive efficiency. But as workplaces become more automated, one thing has only grown more important: the human experience of feeling valued. That’s where recognition, and the way it’s delivered, comes into sharp focus.

This year, Awardco’s Center of Excellence conducted a cross-industry study to understand how recognition shapes engagement, belonging, performance, and retention in today’s workplace. The findings from this report, entitled The State of Recognition, illuminate a simple truth:

Recognition is not a nice-to-have. It is one of the strongest drivers of motivation, connection, and well-being at work.

Here’s what we learned.

How recognition is delivered matters as much as the recognition itself

Employees don’t just remember what you say, they more frequently remember how you say it. The research shows that certain forms of recognition have an outsized impact on engagement. 

Employees reported that:

• Company awards create visibility and pride
• Manager emails feel lasting and intentional
• 1:1 conversations deepen trust and connection
• Milestones—like birthdays and service anniversaries—carry special emotional weight

Meanwhile quick instant messages, while widely used, had unexpectedly minimal measurable impact. It’s clear that convenience is not the same as meaning. Recognition sticks when it feels thoughtful, personal, and intentional.

Frequency of recognition is the strongest predictor of engagement

How often recognition happens isn’t a detail that can be easily ignored.

Employees who receive consistent recognition are:

• 2.3x more likely to be engaged
• 1.7x more likely to want to stay
• 2.1x more likely to feel included
• 2.4x more likely to report high well-being

The research also shows clear thresholds:

• Engagement drops if a manager goes more than three months without recognizing an employee
• A single recognition from a senior leader can boost morale for up to a year

Frequent, sincere appreciation builds cultures where people want to contribute, engage, and stay.

Meaningful rewards make recognition even more impactful

Gift cards may be popular, but they aren’t always the most meaningful.

Employees were more deeply engaged when rewards reflected connection, identity, or shared experiences, such as:

• Team activities
• Branded company swag
• Personalized items

Employees crave rewards that feel thoughtful and tied to the culture. Transactional rewards can have minimal impact on engagement, and even may reduce the feeling of belonging.

Flexibility matters, but meaning matters more. The best rewards reinforce belonging.

Leaders play a pivotal role, and it doesn’t have to be complicated

The research highlights clear, practical steps leaders can take today:

• Start with simple, consistent practices like birthdays and milestones
• Build recognition into everyday workflows
• Use multiple methods—emails, meetings, 1:1s, digital platforms like Awardco
• Empower managers to recognize their teams quarterly
• Pair recognition with meaningful rewards
• Centralize recognition so it’s visible, scalable, and trackable

Recognition isn’t a soft skill, and isn’t simply “nice to have.” It’s a leadership skill with measurable impact.

Recognition restores what AI can’t replace

In an era where technology accelerates productivity, recognition strengthens humanity at work. Employees want to feel seen, valued, and connected—and leaders now have data-backed proof that recognition is one of the most cost-effective ways to improve retention, well-being, and engagement.

This research reinforces what we’ve always believed: When people feel appreciated, they do their best work. When they feel connected, they stay. And when recognition is part of everyday culture, organizations thrive.

Read the full report

Explore more insights from The State of Recognition and learn how recognition can transform your workplace.

Read customer stories to see how recognition has transformed organizational culture and engagement for our clients.