Recognition alone motivates most employees, despite rewards gap

Nearly four in five employees say recognition is most motivating when combined with financial rewards, yet fewer than four in 10 have recently received recognition that made them feel genuinely valued, according to new research from Perkbox. 

The Science of Reward Report, based on responses from 4,000 UK employees and 1,000 UK HR leaders, found 78 per cent of employees are most motivated when recognition is paired with financial rewards. A further 80 per cent said recognition increases their motivation, while 79 per cent said financial rewards alone also have a positive impact. 

Despite this, meaningful recognition remains uncommon. Just 37 per cent of employees said they had received reward or recognition in the past month that made them feel valued, while one in four reported they are rarely recognised for their work. More than one-third said they never receive rewards beyond their salary. 

The findings suggest many organisations understand the importance of recognition but are struggling to deliver it consistently. 

The research also uncovered a significant perception gap between employers and employees. Three-quarters (75 per cent) of HR leaders believe employees feel valued through their reward and recognition programmes, while the same proportion believe recognition feels meaningful rather than a formality. 

However, only 53 per cent of employees said reward and recognition makes them feel valued, and 58 per cent described it as meaningful rather than a box-ticking exercise, highlighting perception gaps of as much as 35 percentage points across key measures. 

For workplace health and wellbeing leaders, the findings reinforce the growing evidence that recognition extends beyond engagement and performance, influencing employees’ sense of belonging, wellbeing and retention. 

The report found 66 per cent of employees said reward and recognition strengthens their loyalty to their employer, while 59 per cent said it improves their sense of belonging. More than half (57 per cent) reported a positive impact on their wellbeing, and 56 per cent said recognition makes them more productive. 

Budget pressures remain the biggest challenge for employers seeking to improve recognition programmes. More than one-third (38 per cent) of HR leaders cited financial constraints as the biggest barrier, followed by inconsistent recognition from managers (30 per cent) and lack of time or organisational focus (26 per cent). 

However, the research suggests organisations do not necessarily need bigger budgets to improve employee experience. Nearly three-quarters (72 per cent) of employees said verbal or written recognition alone increases their motivation, indicating that authentic and timely appreciation can have a significant impact without additional financial investment. 

Tracey Paxton, Clinical Director at Perkbox, said: “Financial rewards matter, but people also want to feel seen, appreciated and valued for their contribution. The most effective reward strategies recognise both the economic and emotional sides of work. Frequency and authenticity matter far more than the value. A strategy which is well timed and meaningful will always outperform something bigger but impersonal.” 

She added: “Reward and recognition need to be understood not simply as systems or strategies, but as lived experiences that can make or break how valued people feel at work – and how much they are willing to deliver in terms of effort, loyalty and engagement. When someone’s effort is acknowledged, the brain tags that behaviour as worth repeating. Over time, that shapes habits, individual performance and the culture of an organisation.” 

The findings are echoed by Vetnique, the company behind YuMOVE, which uses Perkbox as part of its employee recognition strategy. 

Jenifer Westwood, People Advisor at Vetnique Home of YuMOVE, said: “One of the biggest lessons for us is that recognition cannot feel like a formality. It has to be frequent, meaningful and connected to something people genuinely value. 

“Our programme through Perkbox helps bring those two things together by making recognition visible across the business, while also giving colleagues access to savings and rewards that can make a genuine difference.” 

The company reported a 99 per cent activation rate for its programme, with 97 per cent of employees engaging with the platform. Colleagues sent more than 1,600 recognition messages during the past year, including 855 linked to company values, while employees collectively saved more than £41,500 through Perkbox.