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"Rewards" typically refers to the "total rewards" an employee receives at work. This includes compensation, benefits, bonus, incentives, and other financial gains.
"Recognition" refers to expressed appreciation by one person to another for that individual's behavior, activities, or impact. Recognition may or may not be accompanied by a physical or financial reward. Also see "employee recognition."
Our research shows that the two are very different. "Total Rewards" contributes to a person's sense of "safety" and "well-being" at work. In most roles, compensation is what we call a "hygiene" factor—not enough compensation has negative effects, but more and more compensation often has no impact on performance.
Recognition, on the other hand, operates differently. Recognition (or "thanks") satisfies people's higher-level need to feel valued, appreciated, and part of a team. Recognition done well is frequent, specific, and peer-based. Our research shows that companies with high recognition cultures have as much as 30 percent lower voluntary attrition rates.
For more information on this topic, we recommend learning about our Employee Recognition Maturity Model.
The Bersin by Deloitte Rewards and Recognition Framework describes all of the elements of rewards and recognition.
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