A few years ago, when I was teaching Organizational Behaviour to a class of B-school students, I tried an experimental game. I asked for 3 volunteers out of which 2 had to leave the class and wait until they were called one by one and 1 was a timekeeper with a stopwatch. The task was a simple one – to guess who had the secret key in the room, without speaking with anyone. We used my car key & gave it to a student in the class - Ruby. Before calling the 1^st volunteer - Arjun, the instruction given to the class was that if Arjun moves towards in the direction of Ruby, the class should cheer with positive affirmations, claps, showing a thumbs up etc. If he goes in the wrong direction, then they should not react. The stopwatch would start as soon as Arjun walked in. The class remained silent as he moved towards the wrong row of students, but as soon he turned left, the entire class of students started clapping and cheering him “keep going!”, “superb!” “yes! yes!”, “you got this!”. There was an element of fun and fervour that pervaded the classroom. In no time, Arjun found the key with Ruby and the time was noted.

Before calling the 2^nd volunteer – Shruti, the instruction given to the class had changed. If she moved in the direction of Ruby, then the class should not react. However, if she went in the wrong direction, then students had to use negative words, cautions, react with a thumbs down etc. The stopwatch once again was started when Shruti walked in. Almost immediately, the class started booing and continued their banter of phrases such as “Oh no!”, “you can’t make it!”, “what are you doing!?” until she started moving in Ruby’s direction when the class fell silent. Since the class was silent, we didn’t pursue that direction and after some trial and error, she found the key and time was noted. Not everyone enjoyed publicly pulling their friend down and so many remained silent throughout Shruti’s turn.

No points for guessing who was faster at finding the key! You’re right – it was Arjun. What was surprising was that Shruti took over 3X the amount of time to find the key in comparison to Arjun. Not only was the key found faster by Arjun, but also everyone’s mood was uplifted as they joined in with smiles and laughter.

Who is the winner?

Over the years, I have tried this “game” in many groups and while the time taken keeps changing up & down a bit from 3X, but almost every single time the first volunteer finds the key faster than the second one.

When Arjun wins in the experiment, everyone in the class also wins. They feel happy and the job gets done without too much effort. This simple experiment truly reveals the impact of an appreciation culture in an organization. Studies have revealed how recognition improves productivity, boosts morale, and creates a positive work environment, which in turn helps collaboration and retention.

To understand how we can embed appreciation in the DNA of an organization, let’s begin with the basics.

Can you change an organization culture?

An organization’s culture is understood as the foundation of its values, beliefs and behaviours that influences and creates a unique work environment. A company’s culture can certainly be experienced; however, it is difficult to objectively describe and even tougher to change. This is because behavioural change precedes cultural change. Changing behaviour is an uphill task especially in organizations that are multi-generational, geographically spread across boundaries and historically rooted in beliefs that need to be refreshed with time. The change is certainly possible; however, it requires sustained effort at all levels.

Why should we focus on appreciation?

In today’s age of agile business transformation, culture can make or mar an organization’s future. A great culture excels in key elements including Leadership, Purpose, Core Values, Communication, Collaboration, Learning & Growth mindset, and Recognition.

In current post-pandemic world of work, more than ever before, organizations are realizing the value of Employee Recognition as one of the most critical elements of building and enhancing a great organizational culture. A culture of appreciation goes beyond occasional recognition and aims to make appreciation an integral part of an organization's values and practices. It is crucial to understand the significance of creating such a culture and the strategies involved in implementing it effectively. 

What are the benefits of building a Culture of Recognition?

The impact of an appreciation or recognition culture is a combination of tangible and intangible benefits that an organization realizes over a period of time. Some of these benefits are:

• Improved Employee Morale:Employees who feel recognized are more engaged and productive than those who don't. When employees feel valued and appreciated, their morale and job satisfaction soar, leading to higher retention rates and overall organizational success.A Forbes article shared several studies including one by Quantum Workplace that concludes that when employees believe management will recognize them, they are 2.7 times more likely to be highly engaged. Additionally, 37% of those surveyed in a study by O.C Tanner said that more appreciation would motivate them to produce better work more often. (Reference 1)
• Increased Employee Engagement and Customer Satisfaction:A Harvard studyshowed that when employees receive regular recognition for their work, their intrinsic motivation increases, leading to higher levels of engagement. Engaged employees are more committed to their work, resulting in higher productivity and better customer satisfaction. 
• Enhanced Teamwork and Collaboration:When employees feel appreciated for their contributions, they are more likely to collaborate effectively with their peers, share knowledge, and work together to achieve common goals. This creates a positive team dynamic and fosters a culture of cooperation. In fact, studies reveal that companies that promote a culture of appreciation witness a 41% increase in peer-to-peer recognition.
• Increased Innovation and Creativity:A culture of appreciation fosters an environment where individuals feel safe to express their ideas and take risks. When people know that their contributions are valued, they become more willing to share innovative ideas, think outside the box, and contribute to the organization's or community's growth and development. 
• Improved Retention and Sense of belonging: Recognizing and appreciating employees or members fosters a sense of loyalty and attachment. When people feel valued and acknowledged, they are more likely to stay committed to the organization. This helps with employee retention and reduces turnover rates.  Organizations with formal recognition programs have 31% less voluntary turnover than organizations that don’t have any programs at all. (Reference 2)
• Harmonious Work-life integration: Recognizing and appreciating the efforts of individuals demonstrates that their well-being is valued. This contributes to a better work-life integration as people feel supported and respected, leading to reduced stress levels and increased overall happiness. 

How can we foster a Culture of Appreciation?

As elaborated earlier, changing culture needs sustained efforts over a significant period of time i.e. 1.5 to 3 years. However, you will start seeing small changes within 6 months. To begin with, one must have a people-centric approach with a vision of what the organization is seeking to transform into. Once the vision of the to-be state is drawn out, the recognition strategy must include the below components to ensure that it is successful and permanent. Without some key elements, it will die a natural death similar to many other initiatives that do not garner the required momentum.

• Brand your Recognition Program:Formal recognition programs with a specific branding provide a structured approach to appreciating employee contributions with a high recall value. The programs can include awards, appreciation notes, certificates, or monetary rewards for outstanding performance and behaviours aligned with the organization's values. Branding also allows employees to socially share their achievements, which in turn increases the pride associated with the award.
• Leaders first:The organization’s leaders play a pivotal role in establishing and nurturing a culture of appreciation. Their words and behaviours set the tone for the entire workforce. When leaders consistently and frequently show appreciation, it sends a powerful message to the entire organization. They need to actively express gratitude and recognize achievements, inspiring others to do the same. The leaders can provide a solid foundation by setting expectations regarding what behaviours they value and appreciate. By articulating these expectations, not just the managers, but also all the employees have a better understanding and are more likely to align their efforts accordingly. 
• Part of Everyday work culture: Studies reveal that employees rate recognition from managers as the most impactful on their performance and employee experience. Employees believe that motivation and morale would improve if managers recognized their efforts more frequently. Leaders should provide timely feedback and recognition, both informally and through structured recognition programs. This cultivates a culture where appreciation becomes a natural part of everyday interactions. The consistency of the recognition program with small meaningful gestures is a powerful way to influence the organizational culture.
• Peer-to-Peer Recognition:Peer recognition is a powerful way to foster a culture of appreciation. Encouraging employees to recognize and appreciate their colleagues' efforts creates a supportive and collaborative work environment. Companies with peer-to-peer recognition programs have a positive impact on employee engagement and retention rates.
• Recognition Training:Providing training on effective feedback and recognition is vital to equip employees and leaders with the necessary skills. Organizations can conduct workshops or provide online resources to enhance interpersonal skills and communication techniques. This empowers employees to express appreciation in meaningful and authentic ways. 
• Communication and Transparency: Effective communication is essential for propagating a culture of appreciation. Organizations should provide channels for open and honest communication, allowing employees to express their thoughts and ideas. Sharing success stories and examples of appreciation through internal communications platforms or team meetings inspires and motivates others to engage in similar practices. 
• Celebrating Small achievements to Big milestones: Celebrating small achievements reinforces the culture of appreciation throughout the year. Whether it's a small team success or a significant organizational milestone, acknowledging and celebrating these accomplishments boosts employee morale and creates a sense of belonging. It can be done through public announcements, team events, or company-wide celebrations. 
• Individual and Team Contributions:Appreciation should extend beyond the fence of individual achievements. It is crucial to recognize and appreciate various types of contributions, such as teamwork and collaboration. By acknowledging collective efforts, organizations reinforce the value of collaboration, creating a culture where all forms of contribution are valued and appreciated. 
• Beyond Work:For recognition to be holistic, appreciation can be given for achievements beyond work-related performance goals. For example – contribution towards corporate social responsibility initiatives, health & fitness, innovations & ideas, participation in special events, cross-functional collaboration etc. When employees get appreciated for activities beyond their day-to-day work, they realize that the organization cares of their overall commitment and well-being.
• Catch them Early: Recognition should be weaved into the culture right from the beginning of an employee’s experience with the organization starting with induction or onboarding. When employees are recognized for learning the ropes and peer recognition is encouraged right from the beginning, it is easier for them to live that culture for the rest of their tenure.
• Appreciation for special groups:While we focus on the employees, many times we forget that managers, leaders, HR teams and other enabling function members are employees as well. Craft dedicated awards and appreciations for groups that tend to get ignored in the pursuit of driving recognition for the rest of the organization.
• Personalized Recognition: Wherever possible, the recognition should be personalized as per the preferences of the individuals, employee groups or identified personas as per the organization size. Lending a personal touch goes a long way in making the employees feel valued. Research indicates that personalized recognition has the highest recall value even after long periods of time.
• Use of Technology & Analytics: Having the right tools and analytics to run the recognition program supports the recognition vision to continuously level up vis-à-vis the previous achievements. It underlines the organization’s commitment to creating an appreciation culture for the long run. There are many players in the market that exclusively handle employee recognition and while cost is one factor, one must also evaluate the right cultural fit for the organization before finalizing the outsourcing vendor. Vendors provide economies of scale and pre-curated mix of options to get started on the program almost immediately. Analytics helps in making data-driven decisions at a much faster pace so that the recognition program can remain relevant with changing needs.
• Measure the impact:To ensure the effectiveness of the recognition initiatives, organizations should measure its impact basis the initial expectations. Conducting regular employee surveys, collecting feedback, and tracking key performance indicators related to employee satisfaction and retention provide insights into the success of appreciation initiatives. Such measurements help in further refining the strategies and inputs from employees fosters continuous improvement.

Will there be challenges?

Implementing a culture of appreciation may encounter challenges including resistance to change, budget constraints, or lack of awareness about the benefits of appreciation. Organizations should address these challenges proactively by communicating the value of appreciation, involving employees as change champions and by showcasing initial returns via employee satisfaction.

Creating a culture of appreciation within an organization is a powerful way to enhance employee morale, engagement, and overall organizational success. By recognizing and valuing employee contributions, organizations foster a positive work environment where appreciation becomes an intrinsic part of the company's DNA. Effective leadership, strategic implementation of recognition programs, and open communication are key drivers in nurturing a culture of appreciation. As Dale Carnegie rightly said, “People work for money, but go the extra mile for recognition, praise and rewards.”