How Does Employee Recognition Boost Customer Satisfaction?

Linking employee recognition to customer satisfaction.

The customer is the driving force behind business success in 2023 and beyond. But to guarantee the highest level of customer satisfaction, you must first ensure your employees are doing well enough to meet the customers’ expectations. 

The interconnection of these two things in the business world might surprise you at first. So why don’t we explain how it all works? 

Consumers today are not the consumers of yesterday. They’re more conscious and demanding than ever, and sense your business’s approach from their VERY FIRST interaction with your employees in the customer service positions.

And here’s the important part: your employees’ interaction with your clients is a reflection of how you treat them.

This is exactly where employee recognition and customer satisfaction cross paths. So grab yourself a drink and let’s dive deeper:

Why Does Employee Recognition Impact Customer Satisfaction?

As soon as a customer interacts with any of your support team members, they associate that brief experience with your company as a whole. If the experience is positive and your employees have laid a firm foundation for trust, they will more likely return again and again. 

One positive experience with your brand creates this ripple effect of a memorable brand name among those who learn about it through word of mouth or other channels.

Let’s say your customer support specialist helped out the founder of Shopify, for example, with something they’ve been struggling to find on your software. 

If the experience goes smoothly and nicely, and the problem has been resolved successfully, imagine the size of that founder’s network. Then, imagine how many people would hear only the best from your brand name due to that one interaction with your employee. 

The influence of your employees on brand recognition has continually been considered one of the most powerful tools. 

One of the greatest examples of companies that apply employee recognition to improve customer satisfaction is Salesforce. Known for its high levels of customer engagement, Salesforce is also a pioneer in employee recognition. About 90% of its employees consider it an exceptional workplace compared to the 57% average among regular US-based companies. Their employee recognition initiatives involve regular shoutouts and badges on Slack, including custom badges specifically designed for recognized employees.

To be the most willing and supportive ambassadors for your brand, your employees must have the right motivation. 

That is why, employee recognition can bring out the best in your workers and serve as a lasting source of confidence for them as professionals. 

Employee Recognition as Top Priority in 2023

There’s research that proves the demand for better employee recognition today is more than ever before. 

One of the many is a study by Harvard Business Review that discloses 53% of employees are more exhausted and anxious from work than they were before the pandemic started. 

A 2022 Gallup study demonstrates that employee rewards and recognition result in 18% more sales and deliver 10% more positive customer satisfaction. 

And finally, employee engagement is perceived as having the greatest impact on a company’s success by 71% of top-level executives. It exposes a company’s productivity, customer satisfaction, and organizational culture. 

To sum up, the reasons why employee morale is tied to customer satisfaction are:

  1. Happy employees care about work and the clients they serve. They, thus, care about making a bigger impact within the company.
  2. Customer satisfaction brings employee confidence after customers leave reviews and positive ratings. It’s a vicious cycle that never ends.
  3. Happy employees bring in loyal customers, which guarantees a remarkable brand image. 

With this perspective in mind, it is safe to connect employee recognition to customer satisfaction in 2023. Now, let’s discuss the strategies that will help you keep your employees happy.

Culture of Recognition to Drive Customer-Centric Success

The following bar chart clearly demonstrates the top reason why employees start to underperform and look for new opportunities nowadays:

Reasons Why Employees Leave

This brings us to the number one strategy for building a culture of recognition in your company:

1. Transparent Communication of Expectations and Praise for Reaching Milestones

The best way for your employees to perform well is to make them aware of what is expected of them and how their work impacts the organization.

You can organize monthly or quarterly meetups for individual teams or company-wide to ensure the said transparency. Give your employees the opportunity to feel valued by engaging them in these types of important gatherings.

There are many other ways as well that you can use to show your employees the recognition they deserve:

  • Praising them verbally during a coffee break or a quick call, if you have a remote team.
  • Monetary bonuses: your employees come from different financial backgrounds and some people live paycheck-to-paycheck
  • Consistent performance reviews and raises that remind employees that no matter how long they stay with the company, their efforts are always appreciated
  • Organizing training to level up their skills as professionals laying the foundations for continuous self-growth

The next strategy for building a sustainable culture of employee recognition relates to feedback. 

2. Real-Time Recognition: Fueling Customer Satisfaction Through Feedback

It’s underrated how much feedback impacts an employee’s performance at work. Regular, constructive feedback helps employees gain a greater understanding of their strengths and areas for improvement, which boosts employee engagement.

Lower-level employees learn from top levels or managers, just like children mimic their parent’s behavior. Similarly, your employees learn from you when you show by your example how feedback is given. 

Some managers assume that only negative feedback is feedback and only that one is worth reporting. However, it can lay the foundations for the worst company culture where workers dread that negative conversation every minute of their day, or dump that negativity on a colleague.

Positive feedback is valuable too, if not more. Rewarding your employees for little achievements can add up and lead to greater ones over time. 

Additionally, employees should also be encouraged to share their feedback with managers. They’re the ones working tete-a-tete with your clients and their insights on how to enhance the customer experience can be priceless.

However, it’s crucial to pick the right feedback model for your business to achieve the best results when it comes to employee recognition.

The anticipation for constructive feedback from both sides will cultivate a healthy perception of feedback that actually benefits both the employee and your company. 

3. Introducing Peer-to-Peer Recognition

Top-down recognition is important, but peer recognition has a more lasting effect on employee performance and business outcomes. 

Peers have unique perspectives on their workmates’ performance compared to higher-level colleagues. So incorporating peer-to-peer recognition practices can drive employee recognition more effectively. 

Peer-to-peer recognition allows your employees to publicly thank one another for achievements, demonstrated skills, and outcomes. 

By implementing this system, all employees will have a chance to receive feedback in a reasonable and scalable way.

One way you can practice peer-to-peer recognition to enhance customer satisfaction is by encouraging your employees to send digital carrots to one another. 

With the help of Lucky Carrot’s software, this simple but meaningful act of appreciation becomes feasible. The system later converts the carrots into unique physical rewards or experiences.

4. Providing Guidelines for Decision-Making and Offering Support

It’s important to provide your employees with clear guidelines and boundaries to ensure that they understand the framework within which they can make decisions. 

As a result, your employees will feel more confident in their judgment and ability to act in the best interest of customers without fear of repercussions.

Besides guidelines, you must also offer help in areas they might need it. If employees face complex customer situations, encourage them to seek advice from their supervisors or peers. The workplace is not a battlefield for competition over who can get the job done better than the other. True teamwork is about prioritizing company goals over personal ones. 

The above-mentioned initiatives can get your company closer to more promising employee morale and customer satisfaction. 


Overall, employee recognition and customer satisfaction go hand in hand in today’s customer-centric business environment.

As customers become more clever, their perception of a brand or business is greatly influenced by their interactions with your employees, particularly in customer service positions. 

Employee recognition plays a crucial role in fostering positive customer experiences and driving sustainable customer-centric success. By investing in it, you can unlock their full potential since conscious employees become motivated and supportive ambassadors for the brand. 

Research supports the importance of employee recognition, showing that it leads to increased sales, improved customer satisfaction, and a positive organizational culture. To achieve these outcomes, focus on strategies such as transparent communication of expectations, regular feedback, peer-to-peer recognition, and providing guidelines and support. 

Implementing these strategies will not only improve employee morale but also elevate customer experiences, ultimately leading to sustainable business success.

Latest Post