How Recognition Programs Affect Employee Wellbeing

Employee wellbeing is taking a hit these days, and companies make more effort to alleviate the post-Covid effects on the state of the mental wellbeing of their workforce. Learn what opportunities lay in rewards and recognition tools concerning employee wellness.

July 1, 2022 By Ravijojla Novakovic Share on Twitter! Share on Facebook! Share on LinkedIn!
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Around one billion people live with mental illness worldwide, and millions get diagnosed each year. Despite massive efforts to remove the stigma surrounding mental health or the absence of it, the conversations around mental wellbeing and mental health are just beginning to gain traction. In this post, you’ll find out how your company can move beyond talking about mental health declaratively and in what ways recognition can help support wellbeing in workplaces.  

Mental Wellbeing Influences Employee Productivity 

The case for companies investing in the mental wellbeing of their employees is clear-cut. Healthy and content employees are more productive and engaged. Yet, the state of employees’ overall wellbeing is threatened by not only the recent Pandemic and the myriad of challenges that came with it, but also by the deteriorating state of access to mental health services, which many dub as the 2nd pandemic. 

Google searches for ‘burnout’ in the past two years have reached an all-time high. The research published by Mind Share Partners in 2021 documents a poor state of employee wellbeing. As much as 76% of US employees reported at least one symptom of a mental health condition. Some of the most commonly reported symptoms are: feeling burned out (56%), depression (46%), and anxiety (40%).

Poor motivation and engagement lead to higher rates of turnover, a costly outcome for companies. The JobSage survey reveals outlines that: more than 1 in 4 said they’ve quit a job for the sake of their mental health within the last two years, and nearly 2 in 5 have considered doing so.” 

→ Wellbeing is multi-faceted. Learn more about: Employee Wellbeing 

7 Companies that Win at Mental Wellbeing Practices

The Benefits of Rewards and Recognition Tools on Employee Wellbeing

Having the right tools and knowing how to use them unlocks the doors to happier, healthier workplaces. The trick is to gather the know-how to utilize the tools in the best possible way. Rewards and recognition tools provide companies with unforeseen benefits as to how to tackle the issue of employee unwellness. 

The most obvious benefit most leaders will look for is reducing costs. The World Health Organization estimates that the global economic impact of depression and anxiety is about US 1 trillion annually – lost in productivity. 

We know that Rewards and Recognition tools positively impact employee engagement. A strong recognition and rewards system boosts employee motivation. Recognition sparks the production of ‘happy hormone’ oxytocin, which plays a major role in motivation.  

While engagement is critical, it is not the only byproduct of a successful R&R strategy. Here are just a few more:

1. Improved workplace relationships 

Strengthening workplace relationships through peer-to-peer recognition functions like a glue that keeps people together, making strong teams who work together instead of competing with one another. 

HRDive reports that 62% of people surveyed said they wish to strengthen workplace relationships. A study by the Myers-Briggs company finds that relationships with coworkers are a top wellbeing factor

2. Improved resilience, self-esteem, and pride of employees 

Resilience – the emotional elasticity, or ability to bounce back from hardships that are a natural part of life and work-life – can be worked on like it was a muscle. 

As Harvard Business Review notes, decades of research prove that a strong social support system is one of the major ways to build resilience. Public recognition and rewarding employees for their work are sure ways to boost esteem and resilience. 

Content employees know there will always be bumps in the road but do not fear them. If you feed and highlight employees’ good sides – their esteem grows, their social wellbeing is improved, and as a result, resilience improves.

HRDive reports that 97% of respondents answered that it’s important to them that their strengths are recognized. Recognition protects employees from negative emotions and increases resilience.

3. Improved trust and loyalty

Recognition makes people feel seen and respected. The need for status and respect are deep-down needs we all share, the needs that severely impact our wellbeing. Making employees feel seen helps to build trust between teammates but also between employees and employers. However, recognition must be as precise as possible to make the employees feel seen and heard, as generic recognitions aren’t as effective. 

According to Forbes, “nearly 90 percent of employees who received recognition or thanks from their boss in the past month indicated higher levels of trust in that boss.” This statement refers to top-down recognition. However, peer-to-peer recognition only aids the overall feeling of positive and safe work environments.  

As a result of employers going the extra mile to make employees feel good, recognition will decrease turnover numbers and increase employee loyalty when done correctly. According to Josh Bersin, companies with a strong recognition culture had 31% less voluntary turnover.

4. Boosted employee empathy and creativity 

Depleted, unmotivated employees aren’t driven to be creative nor empathetic. According to Psychology Today, you’ll need to cultivate empathy to boost creativity. Improved empathy, in turn, helps to facilitate a feeling of belonging. That’s killing several birds with one stone (not that we want to kill any birds).

5. Improved customer experience

Employees facing customers are at significant risk of developing stress and burnout. To continue delivering excellent results, employers have learned that improving employee experience directly impacts customer experience, which, as a result, impacts companies’ success. 

Glassdoor found that on average, “each 1-star improvement in an employer’s Glassdoor company rating out of 5 is associated with a statistically significant 1.3-point increase in customer satisfaction out of 100.”

When it comes to industries with a greater frequency of customer and employee interaction, these numbers are even more pronounced. There’s a 3.2-point increase in customer satisfaction for each 1-star improvement.


Help people feel better in workplaces – and see how their gratitude for doing so goes a long way. When performed properly, recognition happens in the flow of work of employees. It happens immediately and as often as good deeds and positive behaviors occur. We all like to hear that we’re doing well and are accepted, valued, and seen. Give people that feeling – and see how they respond with gratitude, and your company culture improves. 

Obstacles to progress and opportunities for growth

To understand the issue of employee mental wellbeing and the space of opportunity companies have when it comes to helping employees feel their best – it’s crucial to understand the murky area of uncertainty where general knowledge on mental wellbeing lags. 

If we look at problems as spaces for growth, it’s clear that problems are windows of opportunity that companies should take advantage of. Here are 4 major axes of lack that you can use for orientation.

1. Stigma as the most stubborn obstacle to wellbeing

Before Covid-19 took the world by storm, mental health initiatives at workplaces were moderately present. According to Harvard Business Review, almost 60% of employees have never spoken about mental health at work. Simultaneously, the same research reveals that 86% of employees thought that a company’s culture should support mental health. 

Another research reveals some reasons why people refrain from discussing mental health at work. Almost a quarter of employees – 23% are too embarrassed, 24% didn’t think their employer could help, and 19% feared it would harm their career.   

A recent JobSage survey shows even more glum numbers: 80% of American workers don’t feel comfortable discussing mental health with HR.  

While people are hesitant to admit they have mental health challenges, those who have access to mental health benefits at their workplaces – actually use them – 86% of them (JobSage). The most commonly used mental health benefit is online therapy, also called teletherapy: 57% of respondents use it. This reveals that if mental health benefits are present, employees will use them, even though they wouldn’t admit to having mental health challenges.

The window of opportunity

Companies can step in and fill this void by recognizing positive behaviors, organizing campaigns that support healthy lifestyle choices, and showing employees that even though wellbeing may not be identified as a top company value, it still matters in daily operations. A flexible R&R program allows you to adapt to your workforce’s needs – and prevention is often more productive and less expensive than dealing with damage. 

Whether your company offers incentivized monetary rewards or non-monetary ones, recognition still matters. If your budget allows it, monetary rewards for supporting healthy choices will add the extra punch to tackle stigma and encourage employees to take care of themselves more actively.


2. Therapy is Expensive 

According to the National Survey on Drug Use and Health in 2018, the American Psychological Association documents that 39% of respondents did not seek treatment for mental health challenges due to the inability to afford the cost.

Even though this is troubling, the comparison to the data from 2008 shows improvement. In 2008, 45% of respondents could not afford treatment. Further 9% stated that health insurance does not pay enough for mental health services (16% in 2008). 

The window of opportunity

Companies can take advantage and create a feeling of safety and belonging by offering various mental wellbeing perks. Examples include access to knowledge, therapy and/or teletherapy, various wellbeing apps, and encouraging and rewarding employee resource groups that support mental wellbeing and offer alternative wellbeing solutions.

3. Unreliable Data

Due to less obvious signs and symptoms, the treatment of mental health has advanced at a slower rate in comparison to the advancement of medical treatment of physical ailments. Mental health, or lack thereof, mental illness, has also been harder to define and measure. Hence, the data on mental health have been more complex to track. 

Because the amount of people seeking treatment for mental health issues is lower than those with physical ailments, the data available is somewhat unreliable, as it doesn’t represent the undiagnosed population. Many people live with a challenging mental health situation and often postpone looking for help until it’s harder to treat or it might be too late.

The window of opportunity

This alone is a reason for companies to find ways to forestall the development of issues such as burnout and work-related stress. You could set up various mental health campaigns within a rewards and recognition tool that highlight the need to take proper rest, self-care and reward employees for positive behavior.

4. Mental Health Literacy 

Mental health illiteracy is another common obstacle in the treatment of mental illness. To be literate about mental health means to be able to recognize signs and symptoms of mental illness in oneself or others, know how to get help, and identify risk factors and causes. 

This is extremely important in mitigating the harm done when a lack of mental wellbeing is left untreated for too long.

One 2015 study in the UK found that about 61% of working-age adults had a poor understanding of conditions, symptoms, and treatments relating to mental health.  

The window of opportunity

Companies can take the opportunity to raise awareness of mental wellbeing, cross-promote it with company culture and values, and support those employees who want to become wellness ambassadors within and outside workplaces. You can customize your rewards and recognition campaigns to support these activities.


Post-covid Era Mental Wellness Trends at Work

The future is uncertain, but we can already observe the following trends:

1. Increased demand for mental health services 

The average share of adults reporting the symptoms of anxiety and/or depressive disorder in 2019 was 11%, and in 2021 it rose to 41.1%. 

Having experienced more flexible work arrangements, the talk of returning to offices to work further hinders employees’ wellbeing. A McKinsey study finds that 1 out of 3 employees feels that returning to the workplace negatively impacts their mental health, making them more anxious and/or depressed.  

2. Decreased availability of mental health services 

The disruption and decreased availability of mental health services were documented in March 2022 by the World Health Organization. Some of the reasons stated are: reduced, shortened, or postponed outpatient appointments, fewer face-to-face services available, group therapy suspended, people in psychiatric institutions being released earlier, etc. 

Further on, therapists aren’t immune to the Great Resignation trend either. Even before the Pandemic, therapists were just as likely to experience burnout, and the increased demands only exacerbated the hazard. 

3. A switch to e-mental health care services via apps, videos calls, and various online resources 

A quick way to mitigate the lack of access to mental health services was the introduction of teletherapy. 

Online services ensured more access due to the flexibility of appointment scheduling. However, teletherapy is limited in scope and doesn’t suit everyone. People who may benefit from teletherapy have the privacy of their own space, income that supports these services, and are technologically literate.

4. Companies step in to help employees grapple with mental wellbeing 

Companies began to recognize that it is in their interest to take action regarding their employees’ wellbeing. By addressing the global mental health crisis to keep their employees healthy and increasing budgets on wellness initiatives, companies show they care and actively work on retaining their employees. 

The latest trend revolves around reallocating the companies’ budgets and including wellbeing initiatives in highly individualized Total Rewards packages


5. Building company culture around psychological safety

Promoting wellbeing at work takes more than a collection of nicely curated wellbeing benefit packages. A lot depends on company culture, and in the absence of positive and inclusive workspaces, no amount of benefits will override the issue of psychological safety

Unless employees feel safe to be authentic, they’ll never be as engaged as their best selves. It’s up to companies to create psychologically safe environments, and that includes providing space for employees’ entire identities to be welcomed and cherished, for example: being free to ask questions, voice opinions, or give or take feedback – up, down, and across.


As remote and hybrid work models become more common, the lines between private and personal spaces blur. It becomes apparent that it’s impossible to compartmentalize work from other spheres of life, and that a person’s wellbeing impacts their success at work.

We’re experiencing a once-in-a-generation opportunity to impact the future of work. Companies should take advantage of the current momentum and make changes that create a win-win for employers and employees alike.

Companies are already taking notice of how employee wellbeing matters to company success. They invest in preventing workplace stress and introduce various mental wellness-related perks and benefits.

The key to supporting employee wellness lies in the idea that work is not something that only depletes us, but also fills us with inspiration and awe. To follow through successfully, leaders must assume responsibility for building opportunities for employees to feel good. One of the surest ways to do so is by encouraging recognition and rewards.

Timely, frequent, specific, and transparent recognition is a vital social validation tool that successfully raises the recipients’ oxytocin levels. As a result, employees who are validated by their peers feel more comfortable in their workplaces.

Thus, recognition functions as an engagement booster, morale, creativity and empathy enhancer, and workplace relationships strengthener. Companies that utilize a recognition strategy increase employee performance and productivity while reducing turnover and HR costs.