Appreciation Is The New Compensation

Why seeing, hearing, and valuing your people matters more than ever

With rising inflation and soaring costs having an increasing impact on households, employees are looking to their employers for pay rises to offset financial pressure. But in a challenging global climate, many businesses are unable to meet those expectations. So, how can organizations continue to make their teams feel recognized and valued even if they cannot increase salaries?
 
While financial incentives matter across the board, age-diverse workforces prioritize different things. For example, for older workers, opportunities to share knowledge and develop others are often as important as pay. Mid-career professionals tend to place greater importance on work-life balance and flexibility, particularly as they juggle work with caregiving or family responsibilities. Younger employees—just starting their careers for a way in, and now struggling to enter the housing market—are highly motivated by salary, but also by transparency, fast-paced career progression, and purpose-driven culture.

What is universal across all age groups, however, is the need to feel appreciated and valued for their contributions. Appreciation is the most fundamental human need and is closely linked to performance-enhancing states such as belonging, trust, and psychological safety. When employees feel safe and appreciated by both bosses and colleagues, they are more likely to be productive, creative, engaged, and willing to go the extra mile. In fact, genuine appreciation, not just for the work done, but for the person doing it, can inspire greater innovation and commitment than money alone.
 
WorkingWell's survey data shows that nearly 40% of employees say they don’t feel recognized. But when asked what recognition looks like to them, people consistently point to personal appreciation over financial rewards, although many note that financial recognition is always good too, if it were available, but they accept that it often is not.
 
Upskilling opportunities and workplace perks are valuable as tangible ways to recognize employee contributions, supporting career development, lifelong learning, development of trust, and employee well-being. But they lack the personal connection that empathy and genuine curiosity provide. It is these human interactions that make people feel truly seen and valued.
 
What’s needed is a complete shift in communication and HR/employee relationships, and in a sense, this shift is already underway. The psychological contract between employer and employee has changed, with straight financial reward for services no longer enough. Today, employees expect more. It is a buyer’s market, and the line between personal and organizational purpose is often emotionally and practically intertwined, though not without tension. When money incentives are limited, an employer’s genuine interest in an employee as a whole person, acknowledging their hopes, fears, and challenges that will accompany them to work every day, can go a long way in building trust and engagement.

Recognition might not provide financial relief, but when it is specific and sincere, it can do a lot to help employees navigate work and life demands. When people feel that their employer truly understands and values their role on the team, they are more likely to feel secure inside a mutually beneficial partnership, rather than trapped within an unfulfilling and underpaid job.
 
At its core, making employees feel valued starts with noticing their efforts. As employers discover new ways to reward their teams, they will see that fostering a culture of recognition and appreciation creates a foundation for a thriving and motivated team that can drive organizational success even in times of financial constraint.

Lesley Cooper is a management consultant with over 25 years of experience in the design and delivery of all elements of employee well-being management programmes. In 1997, Lesley founded WorkingWell, an award-winning specialist consultancy that helps companies manage workplace pressure in a way that facilitates growth and development. She is also the co-author of Brave New Leader: How to Transform Workplace Pressure into Sustainable Performance and Growth.