As AI adoption accelerates across every industry, executives face mounting pressure to deliver more from their organizations. But organizations that respond by reducing their people investments may be overlooking one of the most practical links between employee behavior and business performance: employee recognition. New research from Harvard Business Review Analytic Services, sponsored by Achievers, the world’s most utilized recognition and reward software, examines how the most effective programs turn appreciation into measurable business results.

The Improving Business Performance Through Appreciation report finds that most organizations understand recognition matters but lack the strategy, culture, and technology needed to make it consistently effective:

  • Two-thirds (66%) of respondents say their organization’s reward and recognition program is very important for influencing business performance.

  • Only one-third (33%) describe their program as very effective.

“Nothing is more important than appreciation in shaping organizational culture and delivering on strategy,” said Amy Edmondson, the Novartis Professor of Leadership and Management at Harvard Business School. “As humans, we need to know we matter. Finding ways to build frequent, concrete appreciation and recognition for things done well is vital. It reenergizes and reconnects people with the importance of what they’re doing.”

A clear divide between leaders, followers, and laggards

To examine what separates effective programs from the rest, the report groups organizations according to respondents’ ratings of their reward and recognition program: leaders are the 33% of organizations that respondents report having very effective programs, followers are the 37% of organizations that respondents report having somewhat effective programs, and laggards are the 31% of organizations that respondents report having not very effective programs.

  • Strategic alignment: 88% of leaders design their programs to drive specific employee behaviors, compared with 72% of followers and 28% of laggards.

  • Frequency: 89% of leaders say employees can expect frequent and meaningful feedback for a job well done, versus 72% of followers and 35% of laggards.

  • A culture of everyday recognition: Leaders are more likely to foster a culture where recognition happens consistently, not only at formal milestones. Only 21% cite culture as a barrier to frequent recognition, versus 38% of followers and 66% of laggards.

Leaders’ advantages in recognition extend to specific business outcomes. Leaders (36%) are more likely than followers (18%) and laggards (8%) to report that recognition drives increased revenue or profit margins. They’re also more likely to see recognition fuel stronger collaboration, increased productivity, and improved customer experience.

“We set out with this project to explore how a well-designed reward and recognition program can provide a consistent approach to recognizing and rewarding employee performance,” said Beth Tracton-Bishop, Ph.D., Director of Research, Harvard Business Review Analytic Services. “And the research shows that this strategic approach to employee appreciation can support company performance.”

Why recognition programs fall short

The report identifies two practical gaps that can keep organizations from realizing the full business value of recognition:

  • Managers become the bottleneck: A supportive manager is the most frequently cited internal factor influencing employee performance, selected by 39% of respondents. At the same time, 58% say managers being too busy (e.g., focused on other priorities) is the leading barrier to employees receiving frequent recognition.

  • Platform adoption lags: Only 28% of respondents say their organization uses a dedicated technology platform for reward and recognition. Among organizations that do, the leading benefits are supporting peer-to-peer recognition (57%), encouraging more frequent feedback and appreciation (47%), enabling employees to select appealing rewards (41%), and creating organization-wide visibility (40%).

The findings suggest that recognition pitfalls are rooted in both organizational culture and infrastructure. If recognition relies on managers to act without technology that encourages and simplifies moments of praise, or if appreciation is reserved only for formal milestones, organizations will struggle to achieve the consistency and resulting benefits realized by recognition leaders. Technology can help democratize appreciation, but the platform must offer seamless ways to share recognition connected to clear business priorities and authentic and frequent human feedback.

Turning strategy into repeatable behavior

The report shows that the strongest programs do more than distribute rewards: they make business priorities tangible by celebrating the everyday actions that advance them. Recognition leaders are more than three times as likely as laggards to design recognition around specific employee behaviors. Workday illustrates this approach by connecting recognition categories directly to strategic priorities such as AI adoption and innovation.

“We have an ongoing ‘everyday AI’ initiative where we encourage and incentivize our people to use AI tools to become more productive at work,” said Ben Carter, Workday’s senior vice president of total rewards. “We introduced an ‘everyday AI’ category in our reward and recognition platform to recognize the people driving us forward with AI. We also have a category for innovation. Every recognition people give within our platform needs to be tagged with a behavior we’ve identified as strategically important.”

“When recognition is frequent, championed from the top and tied to the priorities that matter most, businesses are better positioned to flourish,” said Scott Landers, CEO of Achievers. “Yet too few organizations are following the example set by Workday and the leaders in this research. Closing that gap by praising people for their hard work can build great employee behaviors that help companies advance critical initiatives such as AI adoption, because technology doesn’t transform companies — people do.”

Access the full Improving Business Performance Through Appreciation report.

About the Study

Harvard Business Review Analytic Services surveyed 566 members of the Harvard Business Review audience through an online survey fielded between March and April 2026. Respondents qualified to participate if they have knowledge of their organization’s reward and recognition program and how it influences business performance.

About Achievers

Achievers recognition and reward software provides powerful tools to help business leaders shape employee behaviors and drive real business results. Achievers recognition and rewards software.

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