The Effects of Team-Based Recognition on Employee Engagement and Effort : A Field Study

Firms have long used recognition programs to engage and motivate employees. However, minimal research has examined the effectiveness of these programs in actual organizational settings. We predict that the adoption of a team-based recognition program will be associated with significant improvements in employee engagement and effort. We test our predictions using a pre-post research design administered at six fast-food franchise restaurant locations for a 12-week period. Employees at each location were eligible to receive non-monetary recognition (i.e., thank-you card, token gift) as a team every two weeks. The results support our predictions. We also find the benefits of team-based recognition extend to customer satisfaction and financial performance. Our findings should be of interest to compensation system designers in settings where employee motivation is low and individual performance is costly or difficult to measure. We show that team- based recognition can be effective in such settings. In so doing, we also extend the academic literature that has primarily focused on the behavioral effects of individual-level recognition