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Mindset Shifts and the Psychology Behind Employee Recognition

Mindset Shifts and the Psychology Behind Employee Recognition

In recognition of World Gratitude Day, organizations around the globe are seizing the opportunity to appreciate and recognize their employees. But how many pause to consider the psychological underpinnings of their recognition strategies? Last year, during a casual conversation with a Perceptyx customer, a revealing question emerged: Are "A" students always the best hires? This inquiry led to a deeper examination of employee recognition methods, and how a growth mindset could reframe the way we approach workplace performance and praise.

I was talking to a Perceptyx customer struggling with staffing issues. The individual, aware that I teach part-time at Purdue Global, asked me to send any top-performing students their way. My response? "You might actually want my 'B' students." It kicked off a discussion around the teachability of 'B' students, who tend to be more open to feedback and adaptive to change — a stark contrast to many 'A' students who exhibit a fixed mindset and may be resistant to constructive criticism. This conversation made me revisit the growth mindset theory, and I began to ponder if it could provide insights into effective employee recognition programs.

Growth Mindset Theory: Verbs Over Attributes

Psychologist Carol Dweck introduced the concept of growth versus fixed mindsets more than 30 years ago. According to Dweck, people with a fixed mindset believe their abilities, such as intelligence and talent, are innate and unchangeable. These individuals avoid challenges and are often unreceptive to constructive feedback. On the other hand, those with a growth mindset believe that they can develop their abilities through effort, training, and resilience. They welcome feedback as a vehicle for improvement and seek "purposeful engagement" to achieve their goals.

Whether or not someone falls on the “fixed” or “growth” mindset side of the continuum, when recognition is framed in terms of efforts — verbs like "striving," "improving," or "persevering" — rather than attributes like "intelligence" or "talent,"  people are more likely to:

  • Embrace challenges because they are rewarded for their effort
  • Focus on problem-solving rather than emotional reactions
  • Resist dishonesty in performance reporting

Based on what was found in academic studies around recognition, the attribution of praise to innate qualities can inadvertently lead to a defensive reaction focused on preserving self-image rather than aiming for greater achievements. When we apply these principles to the workplace, it can shed light on why many employee recognition programs have been ineffective. 

Lessons from Healthcare

Perceptyx research on the healthcare employee experience has found that 3 in 5 employees feel recognized for their contributions to their organization. One group with a notably less favorable experience is Black female clinicians, where only half feel recognized. For one healthcare customer, our people analytics team uncovered that Black employees averaged 12 percentage points lower on employee survey response rates than White employees, and Black employees were also less likely to be highly engaged — a gap that has been widening over the past half-decade. By connecting employee listening data with employee recognition data, we found that receiving electronic recognition (such as e-cards) during the pandemic from one’s manager not only increased the response rate, but also raised overall engagement for Black employees.

For another healthcare customer, we found that receiving an average of five “thank you” e-cards from one’s manager increased the likelihood of being highly engaged by 4% and reduced the likelihood of turnover by 1%. For the average healthcare organization, that saves $270,000 annually in nursing turnover costs alone.

Surprisingly, we found that e-cards that were tied to a monetary reward had a backfire effect: these employees were less likely to be highly engaged and were more likely to voluntarily leave the organization. Digging a bit deeper, we analyzed the content of the thank-you cards using natural language processing and found that monetary e-cards were more likely to have an “I’m sorry” tenor: “I’m sorry you had to work that extra shift. Thanks for going above and beyond — I owe you one.” When e-cards were accompanied with a monetary reward, it was often an indicator of burnout and higher turnover. Research in employee motivation may have predicted this outcome, as positive feedback often enhances intrinsic motivation but tangible rewards can significantly undermine it.

The takeaway? Genuine, behavior-focused recognition can yield benefits, including increased engagement and reduced turnover, without the pitfalls of attribute-based or monetary rewards.

Drawing on our healthcare research, several best practices can enhance organizational recognition:

  • Regular Feedback: Continuous acknowledgment and constructive feedback help employees feel valued.
  • Professional Development: Offer growth opportunities beyond mandatory training to improve retention.
  • Public Acknowledgment: Celebrate achievements openly to provide a learning blueprint for others.
  • Work-Life Balance: Acknowledge the challenges of the job and offer resources for well-being.
  • Resource Provision: Equip employees with the tools they need to manage stress and burnout effectively.

Why It Matters

Inefficient recognition programs aren't merely ineffective; they're detrimental. They may lead to increased stress among high performers and create environments less open to constructive criticism. Moreover, such programs miss an opportunity to serve as learning models.

Always align your recognition to organizational values. Highlighting behaviors that are antithetical to your culture can send mixed messages.

A Call to Recognition

World Gratitude Day is not just an occasion to express thanks — it can be a starting point for a more thoughtful, psychologically-informed approach to employee recognition. Isn't it time we go beyond superficial praises to create cultures that foster purposeful engagement and continuous growth?

If you're looking to understand and enhance the impact of your employee recognition programs, Perceptyx can help tailor strategies that utilize gratitude to combat the increasing challenges of employee burnout and attrition. Reach out to learn more and take the first step in fostering a culture of genuine recognition and sustained growth.

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