Recognition Vs. Rewards: Why Effective Recognition Wins for Healthcare Employees

April 1, 2021
April 1, 2021

This blog post excerpts the HealthStream article, Effective Recognition: The Right Way to Influence Behavior, by Craig Spilker, Head of Product + Engagement, AMPT, and Brad Weeks, Director, Performance Assessment ; and Development, HealthStream.

Effective recognition occurs when employees receive trusted, authentic feedback from a peer, manager, and/ or leader about how their actions impacted their team’s objectives or the organization’s purpose.

When employers use rewards to motivate, they are attaching performance to a tangible object. Effective recognition, on the other hand, has a psychological impact. It connects employee performance to intrinsic motivators, such as why they perform, and sends the message that the behaviors they exhibited are in alignment with how the employee defines success.

As a result, effective recognition will have a longer lasting impact ; as it better connects to ongoing performance. Where a reward has a target or a milestone in place that once achieved causes an employee to start over. On the other hand, receiving a genuine moment of recognition connects to an employee’s strengths, purpose, and goals so the impact will linger and affect performance well beyond a predetermined time frame.

Rewards, while set-up with good intentions, may even have a negative impact on employees’ performance. ; People that do not expect a reward perform better than those that do; introducing rewards can discourage and result in poorer performance from top performers as the reward crowds out these individuals’ intrinsic motivators. Using authentic recognition as a motivator will not only continue to engage top performers, but it will help managers and leaders impact the performance of the less engaged workforce by exemplifying how the employee is contributing to the organization’s goals and vision.

Effective Recognition Strengthens Relationships Between Employees, Teams, and Managers

Unlike reward systems that can be manipulated or create a competitive environment among team members, acknowledgment of employee performance by a peer or manager creates an environment of camaraderie. Employees share positive accolades because they know it impacts their co-worker’s performance and therefore the organization, not because they want to help the co-worker obtain points. In healthcare where teamwork is directly tied to quality, motivating employees to work towards collective rather than individual gain is important to the organization and the patients served.

When done correctly, authentic recognition between teammates will also lead to stronger relationships between employees and managers, as it gives managers insight and the ability to coach employees on their strengths. As healthcare is making the shift from retroactively looking at errors and mistakes to proactively understanding and replicating what is working well, authentic recognition is playing a vital role in improving individual performance and creating positive environments that foster a better employee experience.

This article also includes:

  • “Reward” and “Recognition” Are Not Synonyms
  • 83% of Employees Prefer Authentic Recognition over Rewards
  • Authentic Recognition Is Unlimited
  • Effective Recognition Programs Have More Impact than a Rewards-Based Program

Compensation & Rewards Exclusively for Healthcare

HealthStream Compensation & Rewards Solutions optimize your workforce’s compensation by automating inefficient error-prone processes and promoting a pay-for-performance culture to help retain staff. Interoperable with HRIS, performance, and financial systems, HealthStream Compensation brings your organization a secure, auditable healthcare compensation workflow that results in more accurate compensation decisions, and better allocation of merit and bonus dollars.


When employers use rewards to motivate, they are attaching performance to a tangible object. Effective recognition, on the other hand, has a psychological impact. It sends the message to employees that the behaviors they exhibit are in alignment with how the employer defines success.