30 October, 2020

Performance-based Recognition: The New Normal

There is no doubt that the pandemic has left an indelible mark on the workplace. In 2020 only 53% employees globally are feeling engaged with their organizations. This is a particularly alarming statistic considering how employee engagement directly impacts not only an individual’s performance but also the organization’s bottom line. Engaged employees are more productive, bringing in 2.5x more revenues than their disengaged counterparts. Moreover, since most organizations now have distributed or downsized teams, old methods of employee motivation have been rendered obsolete.

However, even before 2020, the trends were showing an undeniable need for change.

Long before the crisis hit, yearly performance reviews had been known to contribute to negative employee perception. Even long service awards were missing the bus, given how millennial and gen z workers opt for shorter job tenures than their older counterparts. Manual recognition programs are ridden with human biases and unavailable to all, while focusing on superficial achievements rather than quantifiable performance. As Laszlo Bock, ex-SVP at Google pointed out- “Performance management had become a rigid, bureaucratic process which had little or no impact on performance and existed mostly as an end in itself.”

In an ever-changing world, employees need quick, efficient feedback systems and meaningful recognition that focuses on individual KPIs in addition to an organization’s value system. In fact, performance-based recognition is quickly replacing annual appraisals in some of the top organizations of the world.  These dynamic recognition programs share the following characteristics:

1. Open to all:

Recognition is open and encouraged in all departments, grades, and job function. Manager-to-peer recognition is supplemented by peer-to-peer recognition, which gives a 360-degree view of an employee’s contribution to a workplace.

2. Timely and frequent:

Small wins are acknowledged and appreciated along with breakthrough achievements, which is essential to inspire disengaged, inexperienced or young talent to aspire for continual improvement. Moreover, continuous feedback helps minimize the impact of frequency bias while determining a fair financial appraisal for an individual at the end of a year.

3. Gamified:

Automated rewards systems trigger the disbursement of digital rewards like badges and points, on acts of exemplary performance. These are known to greatly boost employees’ self-esteem and enhance favorable behaviors. A gamified incentive platform is thus the best tool to motivate and enhance performance, especially in virtual workplaces.

4. Data-driven:

Prescriptive analytics are essential to accurately capture recognition trends, while scientifically comparing performance against organizational KPIs. A 365 day assessment system helps managers account for year-long performance, avoiding human bias and the post-appraisal performance slack.


Performance-based recognition can greatly improve employee engagement and thereby performance, by taking a humane, individualized approach to performance assessment. Careful employee listening, along with behavioral nudges and relevant, positive feedback can go a long way in making employees stay and work towards a better, more profitable future.