How Employee Recognition Affects Employee Mental Health and Well-Being

Employee Mental Health and Well-Being

In a highly-relatable movie, “The Intern,” there is this girl, Becky, who had a mental breakdown at work one day. The reason behind this said breakdown? Well, the employee recognition, or rather the lack thereof. 

Now, Becky is a hardworking assistant to the CEO that has dedicated herself to her role. Despite her unwavering commitment and continuous personal growth, one crucial element was missing from her professional journey – recognition.

Her contributions, efforts, and progress seemingly went unnoticed, leaving her feeling unappreciated and undervalued. As a result, she almost hated her job, but later in the movie, when the CEO finally recognized her efforts and praised her for the job she’d done, suddenly, she was ready to do even better! 

The story of Becky is a clear example of how recognition at work can break or build an employee. And if you recognize a “Becky” among your employees, it’s the right time to start fostering a work culture that celebrates employee achievements. Because yes, recognition does affect employee mental health and well-being, and, therefore, your business. 

In this article, we will explore the impact recognition has on employee well-being and mental health, as well as discover effective strategies to improve it and the success of your organization.

How Employee Recognition Affects Employee Mental Health and Well-Being

Recent statistics show that an individual is 91% more likely to thrive both in the workplace and in their personal life if they feel they’re getting recognized and appreciated for their work. This makes sense since being appreciated and recognized for our efforts is crucial not only for people as employees but as humans too. 

According to Maslow’s Hierarchy of Needs, recognition is one of the main human needs. The latter is a psychological theory proposed by Abraham Maslow in 1943 and is one of the most widely known theories in psychology and human development. 

The theory suggests that human beings are motivated by a hierarchy of needs organized into a pyramid, with the most basic needs at the bottom and higher-order needs at the top.

Recognition and esteem needs are a part of the pyramid and are positioned at the fourth level. The point is this section itself is divided into two branches: the need for self-esteem and the need for esteem from others. 

The second aspect of recognition is where employee recognition falls since it indicates the recognition, admiration, and respect we strive to receive from others. This includes external validation and appreciation for one’s achievements, skills, and contributions. The esteem we need to receive from others can be praise, acknowledgment, and recognition of one’s accomplishments in both social and professional settings.

In other words, employee recognition and acknowledgment are crucial to motivation and well-being because meeting this need fosters a positive self-concept, a sense of belonging, and a healthy level of confidence and self-assurance. All of these contribute to an individual’s overall psychological growth and development of an individual and an employee, and that’s what all organizations and companies should concentrate on.  

It may not seem so at first glance, but the well-being of your employees results in various positive outcomes, which are also beneficial for you as an organization. 

Here are some examples of how employee recognition positively affects employee mental health and well-being, as well as the organization itself: 

  1. Increased Job Satisfaction: When employees receive acknowledgment for their hard work, they are more likely to feel fulfilled in their roles and derive a sense of purpose from their contributions. This increased job satisfaction contributes to higher levels of overall contentment and happiness.
  2. High-Level of Self-Esteem and Confidence: Employees feel a sense of pride and accomplishment after receiving the praise they deserve, leading to improved self-perception and a positive self-image. This, in turn, reduces feelings of self-doubt and inadequacy.
  3. Enhanced Motivation and Engagement: Recognition serves as a powerful motivator. Employees who feel valued and appreciated are more motivated to excel and go the extra mile. They become more engaged with their tasks and are driven to contribute meaningfully to the organization’s success.
  4. Fosters Positive Relationships: A culture of recognition promotes positive relationships among employees and between employees and management. Recognized employees feel more connected to their colleagues and develop a greater sense of belonging, which improves their overall well-being since they don’t work in a toxic work environment where they constantly feel threatened by their team.
  5. Builds Trust and Loyalty: Recognizing employees demonstrates that the organization values their contributions. This fosters a sense of trust and loyalty towards the company, leading to a more committed and dedicated workforce. They know they can lean on the company when necessary because the company is also counting on them.
  6. Reduces Turnover and Absenteeism: Positive recognition contributes to positive work culture and lowers turnover rates. Employees who feel valued are less likely to seek opportunities elsewhere, increasing employee retention. Moreover, reduced stress levels and increased job satisfaction lead to decreased absenteeism, another struggle for many companies.
How Recognition Boosts Employee Mental Health

The Negative Impact of the Lack of Employee Recognition

As we’ve already established, your organization’s employee well-being and success are strictly co-related. The healthier environment you create for your employees, the more engaged they will be at work, and therefore, they’ll do their best to grow with your organization. 

Similarly, the lack of recognition can have adverse effects on individuals and the organization as a whole. Let’s explore how employee recognition or the lack thereof affects not only the employee’s mental health and well-being but the organization as well. 

Increased Stress and Burnout: When employees consistently feel unappreciated, it can lead to burnout. Burnout is a state of physical and emotional exhaustion caused by prolonged and excessive stress. Employees may become emotionally drained, detached from work, and experience cynicism or indifference towards their job. The lack of recognition can contribute to feeling overwhelmed and undervalued, exacerbating burnout symptoms.

Struggling Mental State: Over time, the lack of recognition can severely affect an employee’s mental health. Feelings of undervaluation and insignificance may manifest as depression, burnout, and low self-esteem. If a person is not in a good place mentally, how can they be their best self at what they are doing? 

High Turnover Rate: The failure to recognize employee contributions can significantly impact organizational retention rates. Employees who do not receive recognition for their efforts may start to feel undervalued and appreciated, which can lead to turnover intentions. They may become more inclined to seek opportunities elsewhere, where their work is acknowledged and valued. High turnover rates can be costly for organizations regarding recruitment, training, and loss of institutional knowledge.

Lack of Motivation: Employee recognition is a powerful motivator. Employees who don’t receive acknowledgment and praise for their achievements feel a sense of validation and purpose. They may become disengaged and apathetic toward their work, leading to decreased productivity and poor performance.

Low Morale and Engagement: Without recognition, employees may become disengaged and disinterested in their work. They may feel disconnected from the organization’s goals and objectives, leading to decreased morale and a lack of commitment to their roles. They will just stop caring about the company and their job, putting in minimal effort. 

Negative Organizational Culture: A lack of recognition can foster a negative organizational culture. It may lead to a lack of trust between employees and management, reduced collaboration among team members, and a general atmosphere of disengagement and apathy.

Difficulty in Attracting Talent: Organizations with a reputation for not recognizing their employees may struggle to attract and retain top talent. Potential candidates will likely seek workplaces where their efforts and accomplishments will be acknowledged and appreciated. Soon, you’ll not only lose long-time and experienced employees but also won’t be able to hire new ones. 

Loss of Innovation and Creativity: When employees do not feel recognized for their ideas and innovations, they may be less likely to share their creativity and contribute to problem-solving and innovation within the organization. Why would someone want to help an organization grow when that said organization doesn’t do the same for them? 

How to Improve Employee Mental Health With Recognition

1. Timely and Specific Acknowledgment

Acknowledging an employee’s efforts promptly and reinforces the positive behavior and outcome explicitly. Whether it’s a public shout-out during a team meeting or a personalized email, recognition that highlights the individual’s contribution boosts morale and fosters a sense of appreciation. Once a project is accomplished or a goal is met, give back to the people behind it as soon as possible. Don’t take too long, because then it might be too late and out of place. 

2. Create a Culture of Recognition

Encouraging a culture of recognition throughout the organization ensures that appreciation becomes ingrained in daily interactions. Leaders and managers should set an example by consistently recognizing outstanding work and encouraging others to do the same. Even a small “well done” can motivate your team to do better and create an environment of healthy competition.

3. Rewards and Incentives

Consider introducing rewards and incentives tied to outstanding performance. Whether it’s a monetary bonus, gift card, or extra time off, such tangible rewards can be highly motivating and reinforce the value of recognition. These days, many big and small organizations and companies team up with recognition platforms like Lucky Carrot to not only show appreciation for their employees in the most fun way possible but also to develop peer-to-peer recognition. Through Lucky Carrot, organizations can boost their engagement, bring visibility to employee achievements, and more.

4.Peer-to-Peer Recognition Programs

Implementing peer-to-peer recognition initiatives allows colleagues to appreciate each other’s efforts. This not only fosters a supportive atmosphere but also helps build strong team dynamics. You can do this through fun games, unanimous forms, votes, and online challenges.

5. Performance Feedback and Development Opportunities

Regular performance feedback and opportunities for skill development and career growth show that the organization is invested in its employees’ success. This type of employee recognition conveys trust and appreciation for the employee’s potential. You can constantly offer courses and classes for your employees’ professional growth, arrange seminars and workshops, and send them on business trips.  


Employee recognition, or the lack thereof, plays a crucial role in shaping the well-being of individuals and the overall success of organizations. The positive effects of recognition are far-reaching, contributing to increased job satisfaction, self-esteem, motivation, and engagement. Moreover, fostering a culture of recognition builds trust, loyalty, and positive relationships among team members.

Conversely, the absence of recognition can lead to detrimental outcomes, including increased stress, burnout, turnover, and a negative organizational culture. Unappreciated employees may experience a decline in morale, productivity, and creativity, boosting the overall growth of your organization.

So, let’s take a page from “The Intern” and empower your employees with the recognition they deserve, paving the way to a successful and fulfilling journey for both individuals and organizations alike.

Ready to take the first step to employee recognition with Lucky Carrot? Click the button below to start for free!

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