Impact of Recognition on Employee Satisfaction: A Literature Review

This literature review sheds light on the impact of recognition in achieving employee satisfaction. The problem statement is divided into independent and dependent variable so that the effect of one variable can be analyzed on another variable. The review concludes that recognition is an important factor in achieving employee satisfaction and should be considered as a human resource strategy.

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Literature Review 1
Table of Contents
Problem Identification..................................................................................................................2
Independent Variable.......................................................................................................................2
Maslow’s Theory.........................................................................................................................4
Dependent Variable.........................................................................................................................5
Two-factor theory (motivator-hygiene theory)............................................................................6
Correlation between two variables..................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

Literature Review 2
Introduction
The present literature review sheds light on the impact of recognition in achieving employee
satisfaction. The literature review is focused on providing in-depth analysis of different variables
required in the research and establishing a relation between them. The problem statement is
divided into independent and dependent variable so that the effect of one variable can be
analyzed on another variable. Various research articles and books have been studied and
analyzed to understand the impact of recognition on employee satisfaction. The employee
satisfaction is considered as a dependent variable whereas the recognition is considered as an
independent variable in the research.
In the present competitive times, the employee satisfaction is considered as a significant element
in the employee retention and productivity. However, in the hospitality industry, the employee
retention is a big concern. Therefore, the research has examined the impact of recognition on the
employee satisfaction. In the hospitality industry, the employees play a major role in the
experience and the employee satisfaction. It is essential that the employees remain satisfied and
motivated with their jobs so that the consumer experience with the organization remains
satisfactory. The recognition also entails several other benefits such as increase in wages and
higher responsibilities. The literature review is focused on the recognition and its impact on
employee satisfaction.
Problem Identification
Currently, several studies have been conducted, which analyzes the employee satisfaction.
However, there are only a few studies, which analyzed the impact of recognition on the
employee satisfaction. There are several factors, which affect the morale and satisfaction of the
employees at the workplace. There are other secondary factors, including pay scale,
management, working hours, and the work-life balance, which influences the employee
motivation at the workplace. In the present literature review, the impact of recognition on the
employee satisfaction will be evaluated.
Literature Review
Independent Variable
The current literature on the employee recognition is limited and there is no actual
conceptualization or the theoretical integration of the employee recognition as a human resource
strategy. In the views of Ventrice (2009) in the present times, the competitiveness in the industry
has increased immensely and it requires that the employees work with high motivation. It can be
critiqued that employee recognition is important in employee motivation. The performance of the
organization can be enhanced by intrinsic and extrinsic rewards. The employee recognition is the
trajectory of motivation and results in high productivity. It is a personal development agent and
important for the mental health of employees. The lack of recognition is one of the highest risk

Literature Review 3
factors for anguish during the work (Nelson, 2015). It is important for the managers as it can be
used to handle difficult professional situations. The employee recognition is also important for
on-the-job learning. It is important in complex workplace situations. Today, most of the
organizations yearn to become learning organization, which can be achieved by giving employee
motivation (Banya, 2017). The employee job satisfaction can enhance employee productivity and
performance.
A discussed by Brun & Dugas (2008), it can be stated that most of the employees expects to be
recognized by their supervisors, and peers regarding their performance and productivity. The
need of recognition is omnipresent, irrespective of the job hierarchy or job status. The
recognition of the employee efforts can be considered as an important organization practice for
the employee performance. Different organizations take different approaches to the employee
recognition. There are four different approaches to the employee recognition, ethical perspective,
humanistic view, behavioral outlook and work psychodynamics school (Bradler, Dur,
Neckermann & Non, 2016). These approaches can be used to express the employee recognition
in four ways, namely, personal recognition, recognition of the workplace ethics, recognition of
results and recognition of job dedication. These recognition practices satisfy the needs of most of
the staff regarding the need to be recognized in the organization. The employees should be
recognized as an individuals, as well as they should be appreciated for the commitment that they
bring to the job (Daniel & Metcalf, 2005). They should be appreciated for the commitment,
investment of time and energy and competent performance of the job duties.
In the views of Harrison (2013) the recognition at the workplace is important as it is important
for the human dignity and social justice issue. It states that the recognition is not merely an issue
of organization performance or the psychological wellbeing of the employees. The notion of
equality among all the people also demand that the employees are recognized for their
achievements. Therefore, it becomes the duty of a company in a demanding environment to give
recognition to all the employees (Saunderson, 2004). The organization works as a shared
collective responsibility, and therefore, it implies the concern for others, consideration given to
the outcomes and the impact of the actions. The organization justice can be achieved in an
organization by following different practices. The senior management should develop standards
and polices regarding the delivery of the rewards and treating workers justly in the organization.
The company should monitor the psychological wellbeing of all the employees and they should
help the employees when they feel bad or threatened by challenging decisions. The organization
management should also consider the past mistakes in making the future decisions in the
organization. The recognition is also important in righting the wrong decisions of the
organization and supporting the employees, who have suffered because of wrong organization
decisions. The humanistic or the existential view is associated with ethics and is focused on
identifying different people, their unique characteristics, distinct character and existence.
According to this theory, if the employees or the workers are provided with proper working
conditions, it will assist them in approaching their work positively and understand and work

Literature Review 4
towards the organization objectives. These working conditions include several factors, which
mean the financial and material factors, as well as the relationships, communication, power and
independence. If the organization recognizes its employees, they will work more closely towards
achieving their objectives (Harrison, 2013). The recognition is important for the employees as it
is important for the intelligence, emotions and expertise. The existential recognition is essential
to influence the decision-making of the employees. The existential recognition refers to the
acknowledgement of the existence of another person and taking their needs into account. The
employees feel that they are being treated and valued as an indivdual, as they have unique
physical, psychological, emotional and cognitive characteristics. The work psychodynamics
refers to the experience of the individuals at the workplace and the group strategies which are
used to maintain the psychological well-being at the difficult work situations. According to this
theory, recognition is a symbolic reward, which is expected by the people. The employee
recognition has two components, recognition as the sense of acknowledgment or as an
understanding of the employee contribution towards the organization. It refers to the actual work
done by the employee; however, such recognition is often resisted by the employees as it
identifies the deficiency in the work environment (Garr, 2012). The recognition of the
performance at the work refers to the manner in which employees handle their duties and
produce different results. The work performance encompasses the behavior, skills and the
professional qualification of the employees.
Maslow’s Theory
In the views of Koltko-Rivera (2006) the Maslow’s theory states that there are specific human
needs, which increases the human motivation. All the human needs can be divided into five
categories, namely, physiological, safety, social, self-esteem and self-actualization. It means that
the basic needs of the humans, which encompass survival, safety, love and esteem should be
fulfilled before a person seek a need of high level. All the humans are motivated to satisfy these
needs or requirements. On the basis of the Maslow’s theory, it can be stated that once a need is
fulfilled, it no longer motivates the person and the higher level need is required for the
motivation. The recognition comes in the category of self-esteem and it can be achieved through
formal and informal recognition programs. Maslow identified that the needs of an individual can
be categorized in three hierarchal levels. These categories are physiological, safety, social,
esteem, and self-actualization. The physiological and safety needs are low order needs, whereas
the esteem and self-actualization are higher order needs. It means that the lower order needs
should be satisfied first, so that the user can move to higher order needs.
Dependent Variable
In the perspective of Harter, Schmidt & Hayes (2002), the employee satisfaction is of utmost
value for efficiency and high productivity. The satisfied employees are focused towards their
work and extremely loyal towards the organization. They are motivated towards work and
support the objectives of the business enterprise. They do not work out of any compulsion and

Literature Review 5
aims towards achieving the objectives of the organization. The employee satisfaction results in
positive work climate and people concentrate more on their work rather than cribbing or
complaining. The business organizations focus on employee satisfaction as it is the easiest way
of employee retention (Edmans, 2011). The business organizations need to retain talented
employees for long-term growth and success of the organization. The biggest concern of
business organizations is that employees leave the organization just after being trained. Although
the company can hire new professionals; however, the experienced professionals are more
important for the organization as they are familiar with the organization as well the as the work
skills. According to Madlock (2008), there are several factors, which contribute to the employee
satisfaction, which are good treatment at the workplace, opportunities to grow, appreciation, and
remuneration, which contributes to the employee satisfaction. The retention of talented and
skilled employees is essential in developing the competitive advantage of the organization.
Moreover, high attrition rate of the organization negatively impacts the image of the
organization. In the views of Fu & Deshpande (2014) the employee retention rate is also
important in assuring high revenues for the organization. It can be stated that the feeling of
attachment or loyalty towards the organization is essential in high productivity and revenue for
the organization. It is more important than training or motivation. The employees’ waste their
time is sorting out different issues and addressing different challenges. The employees satisfied
with their job profile try to meet their targets rather than wasting their time in other tasks. The
satisfied employees are happy employees, who help the fellow employees to cooperate with the
organization. These employees do not avoid their job responsibilities because of the job
challenges; however, work harder to overcome the workplace challenges (McCann, Graves &
Cox, 2014). Their only source of motivation is not the money; however, feelings towards the
organization. The employees satisfied with the organization spread positive word of mouth and
invite their friends and family members to work in the organization.
According to Atmojo (2015) the employees satisfied with their job profile tend to be more
flexible and can easily handle pressure in comparison to their employees. The frustrated
employees will find problem with everything in the infrastructure and will not be able to
compromise or cope with the changes in time. The employees happy with their jobs, are more
eager to engage in the training programs and work for the betterment of the organization. The
employee satisfaction describes whether the employees are happy and contented with their needs
and desires at the workplace. The employee satisfaction is important in the employee motivation,
achieving goals and establishing positive morale at the workplace. There are several factors,
which contribute to the employee satisfaction, which encompasses treating the employees with
respect, doing regular employee recognition, empowering employees and giving them high
responsibilities. The companies can use anonymous employee satisfaction survey to measure the
employee satisfaction. There are several factors such as management, understanding the mission
and vision statement, teamwork, communication, empowerment and coworker interaction.

Literature Review 6
The employee satisfaction is also known as job satisfaction and refers to the extent to which the
employee is satisfied with his job responsibilities and job profile. There is a huge impact of the
employee satisfaction on the employee performance. The satisfied employees contribute
positively to the organization and they are able to perform and communicate better with the
employees. The dissatisfaction of the employee has negative impact on the organization. The
employees can react in different manner, if they are not satisfied with their work. They may
withdraw, react in passive or uninterested manner or respond in assertiveness or aggression.
In the views of Ahmad, Iqbal, Javed, & Hamad (2014), there are several dimensions to the
employee dissatisfaction, including colleagues, remuneration, and working conditions. An
employee can realize a different level of satisfaction in each of these dimensions. An employee
can judge a certain dimension negatively and he may judge other dimensions positively. It is
possible that the employee is dissatisfied with his salary; however, he is satisfied with his
working conditions and colleagues. The job satisfaction can be in affective satisfaction and
cognitive job satisfaction. The affective job satisfaction encompasses all the emotions associated
with the job. It indicates the place of the job in an individual’s life. On the other hand, cognitive
satisfaction refers to the rational satisfaction regarding the day to day responsibilities. There are
several theories, which try to describe the job satisfaction. The disposition theory states that the
individuals are predisposed to achieve a certain level of job satisfaction in any job or industry.
The range of affect theory states that the satisfaction of an employee is dependent upon his
expectations and whatever he receives from the job. There are several factors such as
environmental, individual and psychological factors, which impacts on the job satisfaction of an
individual. The communication between the employees and the management is an important
factor in the employee satisfaction. The communication management is important in the job
satisfaction of the employees. The employees derive satisfaction form the companies, which
have effective human resource management practices.
Two-factor theory (motivator-hygiene theory)
Accordin to Harter, Schmidt, & Hayes (2002), Herzberg’s two factors theory, also referred as the
motivator-hygiene theory explains the job satisfaction experienced at the workplace. The
satisfaction and the dissatisfaction of the employees emerge from the motivation and hygiene
factors, respectively. The motivation of the employee at a workplace is related to the job duties
and work environment. The motivation can be considered as a force, which drives the individuals
to achieve personal and organizational goals. As per the theory, the motivation refers to those
aspects of the job, which helps the people to perform better. There are several factors which
impart satisfaction to the employees, such as promotion, recognition, and achievements in the
work. These are intrinsic motivation factors, which are wedged with the job duties. The hygiene
factors include the changes in the work environment, such as pay, company’s policies, workplace
condition, and supervisory practices. This theory states that the job satisfaction and the
dissatisfaction are related; however, different concepts which are not the opposite end of a
continuum. There are certain motivating factors such as pay and benefits, recognition, and

Literature Review 7
achievements, which increases the employee satisfaction with work. According to the theory,
there are certain hygiene factors such as job security, policy and structure which create
dissatisfaction with the job.
Correlation between two variables
Most of the theoretical literature has suggested that the employee recognition has a positive
effect on the employees’ satisfaction. However, there are certain challenges in the employee
recognition as there are only a few managers, who consistently receive employee recognition,
and therefore, they do not know how to give it. Moreover, there is less support in education and
communication for employee recognition. The policies and procedures for employee recognition
are also limited, which prevents the managers in recognizing their employees. Proper recognition
exists in the business organizations, which have supportive culture. There are only a few
organizations, which have written policies to assist the leaders in the recognition initiatives
(Harting, 2010). The business organizations emphasize on the formal award programs; however,
it is clearly insufficient to keep the employees motivated. These business organizations also have
limited set of values; it is they consider that they are not well-known.
Most of the leaders and the managers require training, education courses for giving effective
recognition. There should be high accountability for providing verbal, written, and other forms of
recognition to the employees. However, it is necessary to provide better organization support,
strong organization culture, better policies and budget allocation for recognition to the
employees. With better face-to-face recognition, written and other forms of communication, the
employee recognition can provide high support to the employees. The recognition and the reward
programs enhance the spirit of the employees. It increases the performance and the motivation of
the employees. The aim of the reward program is to establish a link between the performance
and the motivation of the employees (Edmans, 2011). These reward programs ultimately boost
the morale of the employees, which increases their job satisfaction. When the organization
recognizes the employees in terms of their work capacity, then their performance naturally
increases. Therefore, recognition is one of the highest needs of the employees.
The two-factor theory or the hygiene theory states that the satisfaction and the motivation of the
employees are driven by the satisfaction and the motivation of the employees. It focusses on the
factors, which leads to the satisfaction and dissatisfaction of the employees. There are certain
factors in the job, which causes satisfaction, whereas, there is other factor which results in the
dissatisfaction of the employees. As per the theory, the job satisfaction is the product of
motivation of the employees. The employees are motivated through achievement, recognition,
work, responsibility and opportunities. The recognition refers to the honor or attention given to
the employee for performing well in the job. According to the theory, the success of an
individual is not necessary to be monumental for the recognition. The employees should be
acknowledged for doing something well in the organization (Dugguh and Dennis, 2014).

Literature Review 8
Conclusion
The aim of the present literature review is to identify the relationship between the employee
recognition and the employee satisfaction. The employee recognition has a strong correlation
with satisfaction and employee motivation. Recognition helps the employees to feel pride with
their work and enhance their satisfaction level. The results of the research will be beneficial for
the managers and the policy makers. The managers can understand the importance of the
employee recognition and design activities to enhance the employee motivation. The superiors
can motivate the employees to work hard by taking small actions. The employee recognition
affects the workplace performance in several ways. If an employee is not recognized properly,
then it results in low job satisfaction. If the employees are not recognized in a proper manner, it
will develop a negative attitude towards the workplace and the job duties. The employee will
consider the job duties as a burden and eventually, it will impact on his performance. The
employee recognition is an umbrella term, which encompasses several activities and strategies to
make the employee realize his contribution towards the workplace. Most of the employees crave
for recognition from their peers and senior managers. Most of the employees, who do not receive
recognition and appreciation by the management, remain dissatisfied with the job. It can create
several other problems, such as absenteeism, and inability to handle pressure emerging from the
job duties. Different theories discussed in the text have stated that recognition and the self-
esteem are basic human needs. If the organization realizes the valuable contribution made by the
employees, their satisfaction and productivity in the organization will also increase. The
recognition is also important in creating a positive and productive workplace. The
communication has a strong role in employee recognition.

Literature Review 9
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Literature Review 10
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Literature Review 11
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Literature Review 12
Appendix
(Source:583 Park Avenue, 2018)