Six Reasons to Prioritize Employee Recognition Over Rewards in Healthcare

April 1, 2021
April 1, 2021

Effective recognition occurs when an employee receives trusted, authentic feedback from a peer, manager and/or leader as to how their actions impacted their teams objectives or organizations purpose. When employers use rewards to motivate, they are attaching performance to the physical a tangible object. Effective recognition, on the other hand, impacts employees on a psychological level. It connects performance to intrinsic motivators why they perform and sends a message that the behaviors they exhibited are in alignment with how the employee defines success.

Recognition Changes Behavior for a More Sustained Duration.

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, receiving a genuine moment of recognition connects to an employees strengths, purpose, and goals so the impact will linger and affect performance well beyond a predetermined time frame.

Rewards Can Have a Negative Effect on Performance.

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

Recognition Has a Positive Impact on Work Relationships.

Effective recognition strengthens relationships between employees and their 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-workers performance and therefore the organizations - not because they want to help the co-worker obtain points. In healthcare where teamwork, both at a level of care and interdisciplinary, 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 helping improve individual performance and creating positive environments that foster a better employee experience.

Managers Typically Are Restricted in Their Ability to Reward Recognition Is Unlimited.

Authentic recognition is unlimited. With rewards, like money, managers can be limited in how and when they can acknowledge positive behavior. This may not only deter recognition from happening, but also may strain relationships between team members and managers. Instead of a defined pool of resources defining how and when a manager acknowledges employee performance, employee performance determines the how and when.

Recognition Creates Better Outcomes with No Costs Attached.

Effective recognition programs and processes will get the same or most likely better outcomes without the costs of a rewards-based program. In the highly regulated environment that is healthcare, reimbursement and pay structure can change at any time, therefore impacting any budget not tied directly to patient care. When healthcare leaders are thinking about how to motivate employees, they should consider lower-cost alternatives that can be sustainable and not impacted by budget cuts. Taking an employee reward system away from a workforce due to lack of funds will have a more detrimental impact on the employee experience than not implementing one at all.

Rewards Have Value but Shouldn't Be the Foundation of an Effort to Motivate Employees.

Rewards and tangible motivators do not need to be eliminated entirely, they just should not be the foundation of how and why we motivate our employees to deliver high-quality patient care or other job responsibilities that allow the organization to live its purpose. Encouraging positive workforce behaviors through frequent, authentic and public recognition should be at the forefront with rewards being reserved for larger accomplishments such as years of service and/or to encourage activities that change processes vs. behaviors that change engagement and performance.


Gubler, Timothy and Larkin, Ian and Pierce, Lamar, Motivational Spillovers from Awards: Crowding Out in a Multitasking Environment (December 28, 2015). Forthcoming in Organization Science; Harvard Business School NOM Unit Working Paper No. 13-069. Available at SSRN: https://ssrn.com/abstract=2215922 or http://dx.doi.org/10.2139/ssrn.2215922

Sturtm David and Nordstrom, Todd. The Evolution of the Manager and What it Means for You. https://www.forbes.com/sites/davidsturt/2014/09/11/the-evolution-of-the-manage r-and-what-it-means-for-you/?utm_campaign=forbestwitter&utm_source=twitter utm_medium=social#65f55ccb636f

This guest blog post comes from HealthStream partner AMPT, a social recognition platform that allows organizations to easily and effectively recognize employees in their moments of greatness.AMPT enables employees to connect, engage, and grow by allowing them to recognize, share and celebrate moments of greatness. The AMPT platform allows companies to connect their core values to recognition accomplishments, which ultimately drives employee performance. When an employee receives praise for their efforts, their job satisfaction increases, motivation improves, and positive actions are reinforced. Learn more about HealthStream solutions for healthcare employee engagement and retention.