The Future of

Employee
Recognition
The Future of Employee Recognition
Overview......................................................................... 1 The world is changing,
1
The world has changed
but recognition has not.................................... 3 and it’s time for our
recognition programs
2 Why do we recognize?..................................... 11

3 What is the future of recognition?................ 20

4
How can you prepare for
the future of recognition?............................... 29 to finally catch up.

Bonfyre The Future of Employee Recognition

It’s time to rethink
employee
recognition.

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Bonfyre The Future of Employee Recognition
39
The data connecting successful
recognition practices to bottom-
line outcomes such as employee
engagement, retention, and
productivity is undeniable.
With careful implementation, employee
recognition can be a game-changer
for company culture and employee
engagement initiatives.
Societal changes and the evolving
nature of work have illuminated a
tension between traditional recognition
practices and the outcomes they
seek to affect. A conflict has arisen
between the old way of doing things,
and what the future demands of
employee recognition.
Macro-recognition is what typically
comes to mind when we think
about employee recognition. This
traditional approach is practiced
through programs managed by HR
or leadership. Rewards—usually cash
or material incentives—are distributed
from the top-down at monthly, quarterly,
even yearly intervals.
As we’ll discuss later in this paper,
change is only moving in one direction,
and our new work climate needs
a system of recognition driven by
practices more agile, dynamic, and
personalized than macro-recognition.
Micro-recognition involves small but
frequent gestures of informal praise.
The rewards of micro-recognition are
social, not material, and are distributed
peer-to-peer as much as top-down.
Historically, company leaders have
prioritized macro-recognition over
its micro counterpart, but micro-
recognition’s inherent nimble, flexible,
and customizable qualities are
naturally suited to adapt to the changes
in preferences we’re already witnessing.
Although macro-recognition will
remain a prominent practice, micro-
recognition will drive the future of how
we recognize employees.
Throughout this paper, we will explore:
• The societal changes that are turning
recognition on its head
• How employee recognition affects
human motivation
• The dimensions of micro-recognition
and its role in the future of recognition
• The steps leaders and HR personnel
can take to prepare for the future
of recognition
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1 The world has changed but recognition has not

Enterprise recognition programs

are not working the way they
need to be. Just about every
aspect of work has changed
over the last few decades.
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Bonfyre The Future of Employee Recognition
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What all has changed? The work
we perform, the technology we use
(remember the fax machine, the
mainframe, the 9-to-5 work day?),
even where we work— almost
half of the U.S. workforce
is working remotely at least
part time.
The way we experience the world is
changing, but recognition practices
have remained predominantly static
in spite of this. Bersin by Deloitte
reports nearly 40% of all recognition
programs are more than ten years old,1
and 87% of all programs are built on
a foundation of rewards for employee
tenure and service2 that have no effect
on organizational performance.
Other programs, as noted by SHRM,3
recognize individual instances of
achievement or good
performance measured
over a designated period
of time. This recognition
involves financial rewards,
perks like extra PTO, and non-monetary
material gifts (think along the lines of
the classic gold watch reward). Despite
research suggesting these external
motivators can have negative effects
on work motivation,4 organizations
are still spending $90 billion annually5
on non-cash incentives alone.
Companies are funneling their money in
recognition’s direction for good reason.
The relationship between employee
engagement and recognition has been
well-documented for years. When
practiced correctly,6 recognition has
a powerful influence over employee
engagement levels, individual
productivity, company loyalty, and more.
In its State of the American Workplace
2017 report,7 Gallup attributed a 3%
rise in national employee engagement
in part to an increase in basic employee
praise and recognition practices
from leaders. Despite these clear
advantages, recognition programs
have historically been the first to
be cut from company budgets
during times of economic strife.8
If leaders want to implement
recognition to its full potential, it
can no longer be viewed as optional.
Leaders must position recognition as
a focal point of company culture, and
doing so requires a re-evaluation of
commonplace recognition practices.
How leaders practice
recognition must reflect the
changes in the workplace
and trends toward the
future. Recognition (like
everything else) needs to
become nimble, dynamic,
and personalized to the
individual in response.
But in order to understand why these
changes need to occur, we must first
understand how and why the modern
work experience is changing.
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The nature of our work has changed
Even as recently as 30 years ago, the US job market was
fairly evenly divided between three forms of labor.9
Routine manual labor
The dominant form of work in the Industrial Era,
this type of labor focuses on the production of materials
and product through repetitive, physical behaviors,
and is typically seen in warehouses, factories, and
assembly lines.
Routine office work
These positions grew as the need to organize
information became more important. Routine office
labor involves repetitive behaviors (think clerical or
data entry positions) that do not require specialized
knowledge or intense physical exertion to perform.
Non-routine knowledge work
Knowledge workers leverage specialized skills
and education to synthesize information, and
produce new systems of knowledge and ways
of understanding the world. These workers—found
in professional, managerial, and technical roles—
are the primary drivers of the knowledge economy.10
The knowledge economy was conceptualized
by Peter Drucker, and describes a societal shift
where knowledge and information, not material
goods and services, become the most valuable
economic resources.
Recognition programs do not currently
accommodate the needs of knowledge workers,
and they will need to adapt.
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Bonfyre The Future of Employee Recognition
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In the past three decades,
knowledge work has expanded by
about 1.9 million jobs each year,11
while growth for routine manual
and office work has slowed, adding

47%
roughly 100,000 to 250,000 jobs
Knowledge work 1,900,000
per year. What’s more, University
of Oxford estimates 47% of all U.S.
jobs are at risk of computerization12 of all U.S. jobs are at risk
within the next 20 years. The of computerization
professions most at risk are those
that do not require specialized
education. The knowledge economy
no longer describes a theoretical
future; it is our present.

Routine manual labor

and office work 100,000 –250,000

Job growth per year Each icon represents 10,000 jobs Jobs at risk of computerization
In the past three decades Within the next 20 years

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Recognition systems will need
to become more flexible
to accommodate the needs
of an increasingly diverse
workforce. As we will discuss in a later segment, many recognition programs
do not currently accommodate the needs of knowledge workers, and
they will need to adapt. The looming threat of job automation doesn’t
just signal that positions will be disappearing; it also signals that
job responsibilities will change as a result. What leaders recognize
will consequently need to become more flexible as job roles shift.
The scope of recognition will need to expand beyond the output,
or results, of a particular job function, and will need to reward
behaviors that promote a better employee experience and enrich
the company culture.

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Our workforce has changed, too
It’s not just our work performance that’s When the overwhelming majority of the
changed. The people performing work working population was homogenous, it was
are different now, too. In the ‘50s, the U.S. easy for corporations to design systems,
workforce was largely homogenous. Men, such as recognition programs, that appealed
age 25–55, made up the backbone of to the greatest distribution of employees.
the labor force. Today, our workforce is
13
Now, however, our demographics are more
According to data from the Pew Research
more diverse by every conceivable metric. nuanced. Recognition systems will need to Center, Millennials surpassed Gen X
Women now make up half of the working become more flexible to accommodate the to become the largest generation in the
population, and are expected to become
14
needs of an increasingly diverse workforce. U.S. labor force in 2015.
the majority by 2020. Minority populations
15

70 Silent Baby Boomers Gen X Millennials

have seen increasing labor force participation Generation
rates over the years, and now compose
one-third of the workforce.16
60
52.7 53.5
Millennials are the largest generation in 50 44.6
the labor force, and they are only expected
17

to grow in numbers in the coming years. 40

Workers are retiring later, too—by 2022,

30
nearly one-third of Americans age 65–74
are projected to remain in the labor force.18
20

10
3.7
1995 2015 1995 2015 1995 2015 1995 2015

U.S. Labor Force by Generation Chart adapted from Pew Research Center

In millions, averages per year

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 The way we use technology
has changed
The modern consumer experience
is driving many changes to our work
lives, but none more than the way
we use technology. Depending on the
generation you belong to, you may
be old enough to remember a time
when technology was work-centric.
The most advanced technology
once lived in the office; people would
We spend commute to work to use then-
revolutionary devices like fax machines,
five hours copiers, and desktop computers,
a day on our
and then return home to low-tech
environments. I remember on many
phones and
occasions asking my mother to
make copies of things at work or print
mobile devices. something on the office printer because
our crappy dot matrix printer at home
made my school reports look bad!
Today, we don’t just carry revolutionary
technology with us everywhere we go,
we swap it out every other year for a
more powerful device. Our experiences
with technology are now mobile-
centric, designed around principles
of interactivity and engagement.
Through technology, the entire world’s
knowledge rests at our fingertips.
Not only did the consumer technology
marketplace outpace the enterprise
market, it paved the way for a revolution
that forever changed the way humans
communicate and form relationships.
A recent study shows the average U.S.
consumer now spends 5 hours a day
using mobile devices —a 20% increase
20
from 2015. Technology is now an
indispensable part of our daily lives, and
there’s no sign of this trend reversing.
But these revolutions have not
successfully scaled to the workplace.
Outdated systems occupy spaces
where new technology could be
streamlining workflow and innovating
processes. And the need for technology
integration is particularly acute for
recognition—half of all recognition
programs have no software integration
whatsoever. In other words, half of
all recognition programs are not
administered in a manner compatible
with the way we now interpret the
world. This comes at a measurable
cost: the lack of technology
disadvantages an organization’s
recognition efforts by 10%.21
This problem is compounded by a
lack of communication that these
programs even exist. Only 58% of
19
employees are aware their company
has a recognition system in place.22
Regardless of whether the program
addresses a population’s needs,
when only a portion of employees
know the program exists, it’s a sign
that enterprise recognition is being
mismanaged at a base level. The
challenges this poses for the future
of recognition are twofold: programs
will require tech-compatibility, but
also need to be backed by considerable
organizational efforts to promote
it and train employees to use it.
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 Our expectations
have changed
People, millennials in particular,
have become disenchanted with the
transactional nature of purchasing
material goods. Consumer spending
on the whole has been down since
the first full year of the Great Recession
in 2008. Today, millennials are spending
an average of $13 less per day23 than
young Americans were nearly ten
years ago.
Uncompelled by the pull of
consumerism, millennials are
prioritizing “experiences”
over the purchase of
material things.24
In fact, they’re driving an experience
economy that grows each year. The
25
underlying wisdom behind this shift
is that acquiring tangible goods does
not provide millennials the lifelong
memories offered by social events, arts
festivals, sporting events, and the like.
By 2020, millennials are expected to be
50% of the global working population.
Their rejection of materialism illustrates
the fundamental disconnect between
the focus of many current recognition
programs and the key motivating
factors for the current and future
leaders of the workforce.
Millennials are driven by altruistic
tendencies and a desire to make
They are unlikely to be engaged by
a program that awards material
incentives for good behavior. Leaders
will need to bridge this divide with a
similar shift away from materialism in
recognition to have an impact on such
a significant segment of the workforce.
Beyond addressing the afore-
26
mentioned societal changes,
future recognition programs
will need to appeal to the
base reasons of why we
recognize in the first place.

50%
a positive impact on the world.27

Millennials are expected to make up

50% of the global working population
by 2020.

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2 Why do we recognize?

We’re seeing a conflict between

the old way of doing things,
and what the future demands
of employee recognition.

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 Recognition has deep roots embedded
in social and psychological needs.
As discussed in Bonfyre’s white paper,
How Relationships Shape Engagement
and Culture,28 the desire to accomplish
our goals and be recognized for
our achievements is universal to
human nature.
Psychologist Abraham Maslow
grouped “achievement” with our
esteem needs in his Hierarchy of Needs
pyramid.29 To Maslow, our sense of
Self–Fulfillment
Self–Actualization
Achieving one's full potential
Psychological
Esteem Needs
Achievement and feeling of accomplishment
Belongingness & Love Needs
Intimate relationships, friends
Basic
Safety Needs
Security, safety
Physiological Needs
Food, water, warmth, rest
Maslow’s Hierarchy of Needs
When we recognize others, we’re signaling that their
behaviors are socially acceptable and highly-valued within
our community.
achievement helps determine the
confidence we feel in ourselves—it’s
critical to our identity and how we view
our self-worth. If we don’t achieve our
goals, we feel ineffective and incapable.
Maslow’s model positions esteem
needs underneath self-actualization
needs on the hierarchy, meaning that
in order to realize our full potential as
human beings, we must first develop
a strong sense of achievement.
But the sense of value we independently
derive from achievements has limits.
Our satisfaction is also determined by
the network of our social relationships
and the practice of recognition.
When we recognize others, we’re
signaling that their behaviors are
socially acceptable and highly-
valued within our community.
When we feel recognized, our brain
releases dopamine30 and oxytocin,31
neurotransmitters that cause us to
feel a combination of positive emotions.
Dopamine makes us feel satisfaction,
pride, and pleasure, while oxytocin
promotes feelings of affection, love,32
and trust.33 These emotions work
synergistically to strengthen the
sense of community we feel, bringing
us closer together. It also increases
the likelihood that these behaviors
will continue.
Why do we recognize
at work?
In the workplace, the neurochemistry
of achievement and recognition
remain the same as in contemporary
society, but the context is different.
Instead of simply reinforcing desirable
societal behaviors, these chemicals
are manipulated to drive better
business outcomes.
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Bonfyre The Future of Employee Recognition
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When the company recognizes
its employees, it’s seeking to drive
engagement and improve the
organizational performance of
the workforce.
Companies use recognition as a way
of building a sense of community
by making employees feel valued.
In addition to the expected benefits
of higher engagement and improved
well-being, employees who feel valued34
at work are less likely to leave their jobs,
keeping their work community intact.
When the company recognizes its
employees, it appeals to the motivators
of human behavior: intrinsic and
extrinsic motivation.
What is intrinsic
motivation?
Intrinsic motivation comes from
one’s own internal desire to perform
a task. An individual who is intrinsically
motivated wants to see through the
end of a goal or objective for the sense
of personal fulfillment or pleasure
it provides. In short, they enjoy work
for the sake of the work.
I'll be
successful! The choice
is mine!
Richard M. Ryan and Edward L.
Deci, the originators of Self-
We have things
Determination Theory35 (SDT),
observe that “humans are
in common!
liberally endowed with intrinsic
motivational tendencies,”
but “the maintenance and
enhancement of this inherent
propensity requires supportive
conditions.” Put simply, we all Competence The sense of efficacy
have the potential to be intrinsically and mastery we perceive in our
motivated, but supporting factors like skills and their ability to influence
the conditions of our work environment future outcomes.
affect our motivation levels.
Relatedness The desire to feel
SDT states that in order for an connected to people who have
individual to be self-motivated, things in common with us. In a
they must have three universal work environment, this would be
psychological needs satisfied: 36
our colleagues and superiors, even
acquaintances in other departments.
Autonomy The sense of choice and
control we feel over our actions and The best way to satisfy these needs
their outcomes. This is not to be is debated in behavioral science,
confused with a need for independence, but social praise—verbal gestures
but rather refers to an ability to perform of support, positive recognition,
behaviors with a degree of freedom and affection—was found in several
when it comes to choice, rationale, key studies38 to increase levels of
and our feelings.37 intrinsic motivation.39
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When we’re given material
rewards for performing activities
we already enjoy, we question
why we’re performing the
action in the first place.

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Extrinsic motivators are popularly likened to the
carrot-on-the-stick metaphor, directing behavior
where it would not naturally occur, such as on tasks
that are routine in nature, straightforward, and
even uninteresting.
Social praise is an external stimulus;
it comes from other people, not from
within an individual. However, its power
in shaping intrinsic motivation lies in
the ways it satisfies the three basic
needs. When we verbally recognize
an employee,40 we reinforce their belief
in their skill mastery, we give them the
sense they had control over the actions
being rewarded, and make that person
feel connected to the people in their
work environment. Thus, recognition
results in intrinsic rewards such as the
feelings of satisfaction, achievement,
and belonging, spurred by the release
of dopamine41 and oxytocin.42
Research shows that intrinsically
motivated individuals are the top
performers in a workplace.
Not only are these employees more
productive, they also experience
higher levels of job satisfaction 43
and persistence of effort. 44
Companies know they want a work-
force full of intrinsically motivated
employees—think about how many
times you’ve seen a job application
put out a call for “self-starters.” But,
rather problematically, most recognition
systems are not designed to administer
the praise and feedback we know
boosts intrinsic motivation. Instead,
these programs are disproportionately
weighted towards accessing workers’
extrinsic motivation.
What is extrinsic
motivation?
Extrinsic motivation can come from
a variety of motivating forces, tangible
or intangible, that are external to an
individual. These motivators can be
physical, such as financial incentives or
non-monetary awards, or psychological,
like a project deadline or wanting to
meet the expectations of others.
Extrinsic motivators
are popularly likened
to the carrot-on-a-stick
metaphor. As Deci and
Ryan note,45 “People
will be intrinsically
motivated only
for activities that
have the appeal
of novelty, challenge, or aesthetic
value.” Extrinsic motivators, then, direct
behavior in individuals where it would
not naturally occur, and as such are
particularly useful for motivating
performance on tasks that are routine
in nature, straightforward, and even
uninteresting. For example, when
Safelite employees were offered a
financial reward for every completed
glass installation,46 they were 44%
more productive than workers who
only received a stable pay rate. This
pay-for-performance incentive created
opportunities for the workers to earn
more money than they did ordinarily,
motivating them to complete more
installations than average.
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Extrinsic motivators exist across a
continuum of autonomy —they vary
47
in nature and the degree that they
regulate human behavior. When we
act on an extrinsic motivator because
it aligns with our personal values
or because we view it as important
to our personal goals (such as when
we vote in political elections), we
are acting on autonomous extrinsic
motivation. Although the stimulus
is external, we internalize our reasons
for performing the action and
preserve our sense of autonomy.
The distinction between
intrinsic motivation
and autonomous extrinsic
motivation48 is that
when we’re intrinsically
motivated, we act because
we find a behavior naturally
interesting.
When we act due to autonomous
extrinsic motivators, we don’t find that
behavior inherently interesting, but we
do view it as important.
Conversely, when we act because
we expect to receive a reward, that
motivator serves as a controlling force
and reduces the autonomy we feel
over our actions. Instead of performing
a behavior because it is interesting
or important to us, we participate in
a transactional exchange that depends
on external rewards to yield its
desired results.
Consider the story of legendary
Russian weightlifter Vasily Alekseyev.49
From 1970 to 1977, Alekseyev broke
80 world records for weightlifting.
Each time Alekseyev would break a
record, the Russian government would
award him a predetermined monetary
bonus. Consequently, Alekseyev made
a habit of breaking his records by exact
1.1 pound increments every time.50
Throughout the span of his career,
Alekseyev clearly demonstrated an
ability to push his performance well
beyond the measured gains he would
settle for, but the extrinsic rewards
of the bonus weren’t motivating him
to reach his full potential. Rather,
Alekseyev merely had to meet
a benchmark to reap his rewards,
which he was all too happy to do.
The tangible rewards used by
recognition programs, like financial
incentives, gifts, or even the bonuses
Alekseyev received, are controlling
extrinsic motivators.
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Bonfyre The Future of Employee Recognition
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Whereas intrinsic motivation
manifests in behaviors that
last longer and result in higher
quality of output, tangible
extrinsic motivators only produce
performance for as long as they
are offered. They transform job functions into
activities to be performed on an “if-then”
basis. “If you reach a certain number of
sales this quarter, then you will receive
a gift.” This transaction downplays
how particular job functions can hold
importance not just for the company
but for the individual employee.
Instead, the exchange emphasizes
how employees can receive material
and personal gain by going through
the motions of their jobs. Goods earned
for services performed.
Motivation is still motivation, and
there’s no question that extrinsic
incentives produce job performance.
Instead, the question is whether leaders
want to promote this specific variety
of performance. Whereas intrinsic
motivation manifests in behaviors that
last longer and result in higher quality
of output, tangible extrinsic motivators
only produce performance for as long
as they are offered.
As behaviorist Alfie Kohn describes, 51
“[E]xtrinsic motivators do not alter the
attitudes that underlie our behaviors.
They do not create an enduring
commitment to any value or action.
Rather incentives merely­—and
temporarily—change what we do.”
How do intrinsic and
extrinsic motivation
interact?
Recognition programs are built on
the idea that extrinsic and intrinsic
motivation only have an additive
relationship. That is to say, the use
of extrinsic motivators only increase
a worker’s motivation, building upon
the intrinsic motivation naturally
present in an individual.
While it’s true that the effects of
extrinsic and intrinsic motivators can
interact positively,52 this is not always
the case. Extrinsic motivators have
been frequently observed to have
an undermining effect53 on intrinsic
motivation. The underlying logic
behind this phenomenon, known as
the overjustification effect,54 is simple.
When we’re given material rewards
for performing activities we already
enjoy doing, we begin to question
why we’re performing the action in the
first place. Our brains justify that the
attractiveness of the physical reward
must be the reason, while our natural
interest drops.
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In a classic study55 examining
the effects of financial rewards
on children’s motivation to color
pictures, researchers initially found
that offering money for each colored
picture completed increased a child’s
productivity and effort. However, once
the financial incentive was removed,
the children’s motivation dropped
below original levels, and their base
intrinsic motivation to color for
fun decreased.
More than 20 years later, a
comprehensive meta-analysis 56
of studies observing the over-
justification effect found that
the expectation of rewards reliably
undermined intrinsic motivation.
That is to say, across 128 studies,
the overjustification effect was found
present in a variety of contexts, and
observed in individuals with ages
ranging from preschool to adulthood.
More recently in 2009, a similarly
thorough analysis of 51 studies57
exclusively examining business
contexts found incentives can
harm intrinsic motivation, overall
performance, and the pleasure
employees derive from task completion.
What’s more, additional research found
that when we expect rewards, our
proclivity for creativity and innovation,
When we expect rewards, our proclivity
for creativity and innovation, and the
likelihood that we’ll share knowledge
with coworkers falls.
and the likelihood that we’ll share
knowledge58 with coworkers falls along
with our natural motivation levels.
Although much debate surrounds the
conditions and limitations of the over-
justification effect, it has been most
consistently observed when awards are
given for the number of times a task
is completed,59 without regard for the
quality of performance. It’s not hard
to draw the line, then, between
the conditions of these controlled
studies and the contingencies of
the modern rewards program, where
many incentives are distributed just
for reaching quotas.
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Bonfyre The Future of Employee Recognition
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If extrinsic rewards have
potentially harmful effects,
why do recognition programs
continue to rely on external
incentives? In part because we have a tendency
to only look at our systems in terms of
their outcomes. Behaviorist Alfie Kohn
suggests60 that when the company
implements rewards programs, it
observes that employees are compliant
with the new desired behavior and
doesn’t bother to investigate the
psychological underpinnings of the
programs’ effects. Should a problem
arise with the program, the first instinct
is to re-evaluate the offered external
reward, as opposed to the program
as a whole.
$ In addition, we tend to overlook
$ $ how much we care about
intrinsic motivation. A recent
study found that when performing
an activity, people view intrinsic
motivation as the most important
factor to driving performance. Outside
of an activity, they have a tendency
to overinflate the role extrinsic factors
play61 in their motivation. Recognition
programs are built at this psychological
distance; the focus on results obscures
our ability to consider the intrinsically
interesting components of an activity.
As a shortcut, we offer up money and
prizes as rewards, while the pleasurable
and joyful aspects of an activity
go neglected.
To be clear, it’s not impossible for
extrinsic motivation and intrinsic
motivation to live together in harmony.
In fact, they should be employed
together. When combined,62 monetary
rewards, social praise, and feedback
have a stronger effect on motivation
than when practiced individually. The
trick is to find the right balance of each.
An analysis of 40 years worth of
studies63 examining the relationship
between intrinsic and extrinsic
motivation found that the pair do
not need to have an antagonistic
relationship. To make the most of
each, extrinsic incentives should be
linked to tasks “that are straightforward,
highly repetitive, and perhaps even less
inherently enjoyable,” while intrinsic
motivation should be linked to tasks
requiring “a great deal of absorption,
personal investment, complexity, and
overall quality.”
As we look to the future
of recognition, extrinsic
rewards still have value,
but it is a mistake to have
them be the predominant
focus of our systems.
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Bonfyre The Future of Employee Recognition
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 3 What is the future of recognition?

One of the biggest gaps

is that recognition programs
are not addressing the needs
of the knowledge worker.

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Bonfyre The Future of Employee Recognition
39
If you were to wipe the slate clean,
leverage all the latest research, and
design an employee recognition
program from scratch, it would look
fundamentally different from the
systems we have today.
When you design a system to engage
a large population, you want it to
accommodate the greatest distribution
of people possible. One of the biggest
gaps is that recognition programs
are not addressing the needs of the
knowledge worker.
In 2011, researcher David E. Frick
surveyed high-performing government
knowledge workers with the goal
of identifying the top positive and
negative motivating factors in their
work environment. The results of his
The future of recognition is micro-recognition.
survey showed that knowledge workers
were most motivated by intrinsic
factors like meaningful work, belief in
company mission, public service, and
their relationships with coworkers.
Compensation and awards were the
third and second least motivating
factors, respectively.64
Frick concludes that when it comes
to extrinsic attempts to motivate
the workforce, “Pay for performance,
bonuses, and even traditional
performance evaluations” are no
longer suitable rewards for the age
we now live in.
The most influential
factors for the knowledge
workforce are “intangible,
emotional, and intrinsic.”
These same principles
will also guide the leading
recognition systems
of the future.
Rather than continue a system
disproportionately weighted toward
rewarding tangible extrinsic items,
the future of recognition will be
couched in practices designed
to cultivate employees’ intrinsic
motivation. The future of recognition
will shift its center of gravity from the
slow, periodic events of old programs
with awards coming from the top-
down to a nimble, digital system where
participants can recognize peers
and leadership alike for their efforts.
65
21
Bonfyre The Future of Employee Recognition
39
What is micro-recognition?
It’s for everyone. It’s nimble.
It’s customizable. It tells a story
with data visualization.

22
Bonfyre The Future of Employee Recognition
39
 At its core, micro-
MOST recognition is informal
IMPACT positive praise and
feedback exchanged from
person-to-person. Instead
Informal of tangible rewards distributed by
verbal praise
centrally-managed macro-recognition
systems, the incentives of micro-
Non-monetary recognition are increased social
incentive
influence or value. When we practice
micro-recognition, we’re cultivating
employees’ sense of achievement,
CONTROL
No incentive promoting trust and connectedness
GROUP
amongst them,66 and accessing their
intrinsic motivation.
Monetary
reward Micro-recognition might be the
most sustainable form of recognition.
A 2014 study examined the effects
of monetary rewards, non-monetary
LEAST incentives, and informal verbal praise
IMPACT
on productivity over a work week. After
the first day, employees rewarded with
Impact on employee
micro-recognition demonstrated higher
productivity
levels of productivity than those who
Adapted from data in the 2014
study by Professor Dan Ariely received monetary rewards. By the
end, the micro-recognition group But the benefits of micro-recognition
had the highest levels of productivity
out of any cohort, while the money
don’t just rest with the individual
employee. There’s a stickiness to it
condition demonstrated lower overall that brings us all closer together and
productivity than a control group that nourishes the social needs of the
received no incentive at all!67 whole team. Recent research shows
that when high-performing members
Dan Ariely, chief researcher for this of a team are rewarded with micro-
study, asserts the power of praise recognition, it creates a “recognition
lies in the way it creates relationships
spillover effect.”70 The positive feelings
between the recognizer and recognized. from the recognized employees spread
In his book Payoff, Ariely explains that to the rest the team, boosting levels
micro-recognition practices signify
of performance all around.
companies making social investments As the saying goes,
into their employees, demonstrating a rising tide lifts
meaning, value, and trust in ways all boats.
transactional monetary rewards
cannot.68 This repositions recognition
as a partnership that values who the
employee is as a person, and not
what the employee can do for the
company. As Ariely concludes, the
more a company offers employees
opportunities for meaning and
connection, the more likely they are
to work harder and remain loyal.
23
Bonfyre The Future of Employee Recognition
39

Which recognition
is most memorable?
Chart adapted from a 2016 Gallup
workplace survey.
17%
Everyone can practice
micro-recognition
Micro-recognition is efficient,
inexpensive, and flexible. There’s no
price tag to paying a compliment to
someone, meaning micro-recognition
can be implemented with more speed
and freedom than macro-recognition.
But gestures of praise are not created
equally. Sincerity is a mediating factor71
of social recognition.
Micro-recognition will only be effective
so long as it is perceived as sincere by
the person being recognized. Sincerity
can be communicated through detailed
descriptions of the behavior warranting
the recognition, whereas broad
statements of praise can confuse
the specific actions you’re trying to
promote, and can be misconstrued
as disingenuous.
Part of the value of micro-recognition
lies in its dynamic and omni-directional
nature. Unlike macro-recognition,
which is typically distributed from the
top-down, anyone can practice micro-
components,72 which is a valuable
missed opportunity.
Effort is the least visible element of
work. The people most likely to see
the energy an employee expends on
their tasks are not managers, but
peers. Thus, by not including peer-
to-peer interactivity, more than half
of all organizations with recognition
programs are shutting the door on
significant opportunities to celebrate
employee achievements. Although
Gallup has found that the most
memorable recognition comes from
managers and CEOs,,73 some studies

from
28% recognition. Leaders can still recognize show non-managerial employees value

12% Other
sources
employees but, reflexively, employees
can recognize leaders, and peers can
recognition from peers more.74 Micro-
recognition’s flexibility accounts for
recognize their peers. That last part these preferences, allowing people to
from
from is critical. Only 48% of recognition be recognized in the way that is most
Employee’s
Peers
10% manager programs include peer-to-peer impactful to them.

from
Customer
Anyone can practice micro-recognition: leaders can
12% 24% recognize employees, employees can recognize leaders,
from
Manager’s and peers can recognize peers.
manager from
High-level
leader/ CEO
24
Bonfyre The Future of Employee Recognition
39
Fast fact: We crave recognition. Our brains need
it at least once a week. When we’re recognized
frequently, our brains create a reward/repeat loop.
Micro-recognition is nimble
After all, compliments and praise
are basic elements of human social
interaction, and can be passed along in
a matter of seconds. But this informal,
spontaneous practice has historically
been difficult to integrate into formal
enterprise recognition programs.
Before recent advancements in
technology, it was easier to design
macro-recognition systems, where
recognition would be distributed in
deliberately planned monthly, quarterly,
or yearly intervals. Older programs
simply weren’t equipped to track micro-
recognition in the moment it occurs.
Now, the story is different. Although
today only half of all recognition
programs include software integration,
that gap will inevitably grow smaller.
Technology will facilitate ease of use
for recognition programs, increasing
the effectiveness of micro-recognition.
As Gallup’s Jim Harter notes,75
“Recognition is a short-term need that
needs to be satisfied on an ongoing
basis—weekly, maybe daily.”
As technology becomes the vehicle
for our recognition programs, micro-
We crave recognition—
V
recognition will assume position at BEHA IOR
the closer we’re
their center.
recognized to the
behavior that
Through communications technology,
prompts it, the
we can systematize micro-recognition
more powerful
into an experience similar to the
the release of R E WA R D
social platforms we use daily. Mobile-
dopamine in our brain.
centric functionality will transform
In fact, Gallup asks if employees have
micro-recognition into an interactive
received praise within the past seven
experience accessible at all times.
days for precisely this reason. When
Recognition can be passed on as easily
we’re recognized frequently, our brains
as one might “Like” a status on social
create a reward/repeat loop76 where we
media, granting instant validation and
continue to act out favorable behaviors
impact. Digital systems can connect
to receive chemical rewards.
us beyond the network of peers in our
immediate work environment and
allow us to recognize colleagues from
all across an organization.
25
Bonfyre The Future of Employee Recognition
39
However, these effects diminish if the
cycle of positive feedback becomes
less frequent than once a week, and
disappears if praise ceases entirely.
Thus, micro-recognition must be
practiced on a regular basis in order
to create the nourishing feedback loop
of small wins that gives meaning
77
to work and motivates employees to
reach greater levels of performance.
As Partner at The Starr Conspiracy,
Steve Smith leads market research
on the human capital management
technology marketplace along with the
firm’s Intelligence Unit. In an interview
with Bonfyre,78 he summarized the
unique role technology plays in
executing this feedback loop. “We’re
at a point where everyone has mobile
phones. Recognition has to occur in
the moment, as it happens. It’s sort of
like the old parenting adage—you have
to catch your kids when they’re being
good,” Smith says.
“You need to recognize employees
in the moment and tell them their
work matters, and mobile facilitates
that immediacy.”
26
Bonfyre The Future of Employee Recognition
39
Micro-recognition is customizable
Recognition is not one size fits all.
How we want to be recognized,
who we want to recognize
us, and what we want to be
recognized with varies for each
person.79 Variables like age,
generation, gender, and even job
roles all can affect our recognition
preferences. Recognition systems
are already growing to incorporate
customizability, but the looming
integration of big data will enable us to
tailor specificity down to the individual
employee.80
Systems built around micro-
recognition will expand the
scope of what we will recognize.
The service and tenure awards
that have been cornerstones
won’t go away, but will become
but one category in a diverse pool
of recognition. Awards will adapt
Examples of custom recognition badges given
with Bonfyre. Employees recognize peers for
behaviors like Overcoming Beariers, Lead Dog,
and Awww, That’s Sweet (from top down).
to recognize the professional and
the personal—the sales milestone you
achieved on Friday and the marathon
you completed over the weekend.
Micro-recognition will not only incent the
outcomes we desire, but also the pursuit
of knowledge and understanding that
leads us to them.
Today, personalized peer-to-peer
recognition systems do so through
the use of digital badges. Participants
select the person they want to recognize
and award them with a custom badge
to reward a particular behavior. This
customizability speaks to the social
through line of micro-recognition. The
custom badges exchanged aren’t just
a means to model preferred behavior—
they’re tokens of connectedness that
foster trust, goodwill, and ultimately
the long-term relationships that lead
to employee engagement.81
The next degree of customizability will
involve integrating micro-recognition
into our job functions at an individual
level, which will become possible as the
technology behind our systems grows
in intricacy. Eventually, we will be able
to create structures with our recognition
tools that enable us to recognize
remarkable performance within specific
dimensions of job functions.82
Programs that allow recognition to
accrue as spendable, points-based
currency—as many do today—should
have limits. Currency-based recognition
should be oriented around purposeful
outcomes, not personal gain. At Bonfyre,
we’ve designed programs that reward
extrinsic motivators that can only be
used to benefit other Bonfyre team
members and the work community.
For example, we offer a recruitment
bonus that awards $500 to be spent
on team-building and development
opportunities. The extrinsic reward
becomes yet another element of the
social fabric that ties teams together.
The employee rewarded receives
a financial benefit, but also receives the
emotional lift of becoming a benefactor
to the people they care about.
27
Bonfyre The Future of Employee Recognition
39
Micro-recognition tells a story with data visualization
As recognition becomes more nuanced and specified, and experience, but as data collection has become
so too will the data we gather from our programs. more robust, decisions have become directed more
Presently, recognition works by championing behaviors by the tangible information at our disposal.
we perceive as beneficial to our bottom-line outcomes.
As it pertains to micro-recognition, the insights
However, it can still be difficult to draw a line between
we yield from these rewards can reveal the specific
specific behaviors and what has a direct positive impact
behaviors, emotional values, and personality traits
on our organization. The specialized data we collect
that lead to better outcomes.85 To give a rudimentary
from micro-recognition badges can thread that needle.
example, a leader could operate under the gut-based
The story data visualization83 will tell has the potential
assumption that aggressive sales behavior produces
to reveal insights on employee performance that were
the most revenue for the company, but the data
previously unobtainable.
from a future recognition system might show
This is in line with HR’s general shift towards that employees who receive badges for customer
data-based decision making.84 In the past, business service are most likely to influence outcomes.
decisions have been guided by leaders’ gut-feeling The ROI from recognition programs will
only grow as our ability to make decisions
becomes more impactful.
Outstanding
Customer Service

2,031

89% 97% 112

76%

28
Bonfyre The Future of Employee Recognition
39
 4 How can you prepare for the future of recognition?

The most valuable insights

about your workforce
will come directly from
your employees.

29
Bonfyre The Future of Employee Recognition
39
 Change isn’t just inevitable. It’s our new normal.
HR has never been an “easy” profession, but it’s only them as is, nor can we expect our job functions
getting harder as we work through the transition and management styles to remain static while
to the knowledge economy. We’ve seen significant the world shifts around us.
disruptions to the way we experience the world in just
As we look to overhaul our recognition programs,
the past decade, and are only beginning to grasp how
we can use these five takeaways to prepare
dramatically AI and automation will shift job roles. The
and adapt to this ever-evolving work climate:
pace of change is such that we can no longer simply
deploy new systems and manage

1 Build listening 2 Leverage your 3 Communicate, 4 Create employee 5 Adopt an agile

capabilities leadership teams communicate, personas approach
communicate

30
Bonfyre The Future of Employee Recognition
39
1 Build listening capabilities
Communication is important, but it shouldn’t be one-
sided. Ultimately, the most valuable insights you can
obtain about your workforce and how they’re responding
to the changing work environment will come directly
from the employees themselves. Build out your listening
capabilities so that employees have multiple channels
to provide feedback with leadership.
When Stevens Sainte-Rose first took
over as the Chief Human Resources
Officer of Walgreens in 2015, he initiated
a series of projects that reoriented the
company culture from top-down to employee-centric.
Sainte-Rose built out a listening system that involved
15 touchpoints for employees to communicate with
leadership, including pulse survey tools, focus groups,
86
social media, in-store listening sessions, and more.
The feedback loop from these channels provided insight
into how employees felt about the programs in place
at Walgreens, and actionable information on how to
improve them.
Your organization might not be large enough to warrant
a listening system of that magnitude, but use the
resources at your disposal to make your listening as
comprehensive as possible.
While preferences vary from person
to person, recognition is most memorable
when it involves managers, high-level
leaders, and CEOs.
2 Leverage your leadership teams
No organizational culture shift can be successful
without leadership buy-in. While micro-recognition can
be practiced by anyone in an organization, a culture of
recognition will never take hold if leaders choose not to
participate. Encourage leaders to set an example of what
this spontaneous and contagious form of recognition
looks like. This is as simple as dedicating a brief moment
in company gatherings to acknowledge some employees’
small wins. A shout out or thanks is all it takes to get the
ball rolling, but leaders must do it frequently and with
sincerity. To reiterate, we cannot underestimate the value
of leadership participation in micro-recognition. As stated
before, while preferences vary from
person to person, recognition is most
memorable when it involves managers,
high-level leaders, and CEOs.87 That
stickiness is what allows a culture of
appreciation to permeate and promote
recognition among peers.
31
Bonfyre The Future of Employee Recognition
39
3 Communicate, communicate,
communicate
So you’ve developed or acquired a new recognition
system that will meet the needs of your workforce.
Problem solved, right? Not quite. We have a tendency
to believe that obtaining a solution equates to success.
In reality, communication and delivery will make or break
the implementation of your new program.
Develop a communication plan to
introduce the changes you’re bringing
to recognition and educate your
employees on how to interact with the
system. Communication requires a concerted
effort and multiple points of contact. Just sending out
an email isn’t enough. Use every channel available—
meetings, social tools, newsletters, fliers—to keep your
employees in the loop of what you’re changing, how,
why, and when.
4 Create employee personas
We’re still far from the point where
recognition can become truly customized to
individual workers, but with the data we can collect
today, we can begin to assemble personas that articulate
recognition preferences. It bears reminding that no form
of broad categorization will directly align with the needs
of a specific employee, but the data you collect will tell
a story about the personalities of your workforce. Group
this information into as many significant categories
as there are in your population, and detail preferences
with specificity down to type of recognition, delivery
mechanism, and environment.
32
Bonfyre The Future of Employee Recognition
39
 5 Adopt an agile approach
The world, the marketplace, and even our needs
are changing at a rate where long cycles of
discovery, development, and implementation
no longer get us to where we need to be. Traditional
approaches to workflow follow a Waterfall model,88
where information and progress flow in a linear,
sequential fashion from one stage of development to
the next. This model worked in times where things were
slower, but today lengthy development processes can
deliver results misaligned with your future needs.
Instead of investing your energy into a static solution
for recognition, understand needs will continue to evolve.
The tools you implement may satisfy your recognition
needs today, but that could change in a matter of months.
Adopt an Agile methodology89 to conform to this cycle
of evolution. Agile models are modular cycles of develop-
ment that involve short “sprints” of progress, punctuated
by periods of reassessment and reprioritization.
Use the insights from your listening feedback loops
to guide your approach on maximizing recognition’s
effectiveness. Assess the state of your current
recognition tools. Are they still working to achieve the
intended goals of your program? Have your goals for
recognition shifted since you first adopted your program?
Pinpoint the weakest elements of your program and
target those areas for change first.
Never stop collecting
information from your
employees, and never quit
evaluating the effectiveness
of your recognition tools.
33
Bonfyre The Future of Employee Recognition
39
 Make basic The world is changing, and it’s time for our recognition
programs to finally catch up. As the scope of the

demonstrations
marketplace becomes more globalized and connected,
the war for talent will only grow more intense. With more
options available,90 the criteria employees use to select

of sincere praise
employers will become more stringent. Employees
will look for work that provides meaning and value,
and the organizations that endure will be those that
communicate these qualities in authentic practice.

a core part of your

Recognition can no longer stay entrenched in practices
that perpetuate a transactional ideology of goods earned
for services performed. Although the changes we need

company culture,
to make to recognition are sweeping, and in some cases
distant until technology renders them possible, you can
set the first, foundational change in motion today.

then seek out the

Micro-recognition isn’t just praise or a celebration
of our “small wins,” and it’s certainly not a trend.
It’s woven into the fabric of human social interaction
to satisfy our universal needs to belong and achieve.

systems to support it. Micro-recognition is the future

of workplace recognition.

34
Bonfyre The Future of Employee Recognition
39
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35
Bonfyre The Future of Employee Recognition
39
Contributors
Learn more about the contributing team who helped
write, design, and produce this piece.
Around the office, I’m known for...
I prefer to be recognized...
Chris Dornfeld Author, Thought Leader, Project Director
As a 27-year-old architect I designed the Jack Daniels
visitor center in Tennessee.
Informally and personally, from people I care about.
Matthew Stolpe Researcher, Writer, Editor
Having an ever-expanding collection of geeky
enamel pins.
In written form, and as specific as humanly possible.
Susanne LeBlanc Creative Director, Designer
Always having a collection of markers with me.
Directly and right away, in written or spoken forms
of appreciation.
Emma Randolph Designer, Illustrator, Layout
Only forgetting to pack my lunch 4% of the time.
Organically! It’s charming to see real-time
reactions to my work.
5257 Shaw Avenue #304 | St. Louis, MO 63110
hey@bonfyreapp.com
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39
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