When was the last time you were recognized at work? How did it affect you? Rewards and recognition psychology is a fascinating topic. Let’s dive in.

Personally, when I receive recognition for my work, I feel a deeper connection to my coworkers and more trusting in management. I feel more driven to work hard, give my full effort on the job, and ensure I’m making the most of every workday. It’s safe to say many people feel the same.

One thing most people don’t know about me is that I’m a Digital Marketing Manager by profession, but I also have a passion for psychology in and outside of the workplace. In fact, psychology was my minor in college and I’ve continued to study it after I finished my formal studies in academia.

During my years in college researching prosocial behavior for the American Psychological Association, I found several studies about positive psychology that reinforced my theory that recognition has a profound effect on how employees perceive their jobs, coworkers, and management.

Now that I work in the rewards and recognition space, I know that the data is clear: we all understand the tangible benefits of workplace recognition. But what’s not discussed as often is the psychological effect of recognition and the impact it has on employees.

How do rewards and recognition affect us psychologically?

Recognition has a profound effect on the workplace, encouraging more prosocial behavior. The Positive Psychology Program defines “prosocial” as “promoting others’ wellbeing, usually through altruistic acts.” This attitude in the workplace generates more teamwork, more productivity, and more communication between teams. In fact, a simple “thank you” will help give your organization the advantage to outperform your competition more than you think.

Maslow’s Hierarchy of Needs breaks down the elements humans need to thrive and how they apply to psychology. You’ll see in the figure below that compensation and benefits meet the basic human needs of safety and physiological near the bottom of the pyramid. At the top, you’ll see psychological needs of love and belonging, esteem, and self-actualization. Peer-to-peer recognition meets these needs, and it’s a crucial component to a happy and productive workforce.

The key takeaway here is that every workplace should address and fulfill each level of Maslow’s Hierarchy. By doing so, you encourage prosocial behavior, gain a competitive advantage, and encourage your employees to work harder and smarter.

What happens to our brains when we’re recognized?

Our brains want to be recognized. In fact, they crave it.

Two areas of the brain are affected by recognition: the hypothalamus and dopamine receptors. The hypothalamus controls basic bodily functions like eating and sleeping, while dopamine receptors receive dopamine, the chemical that causes happiness and combats depression. Recognition stimulates the hypothalamus regularly and increases dopamine production, affecting the plasticity of the brain, and improving both quality of work and productivity.

You’ll see a similar event happen in social media: every time you receive notifications (similar to mini-recognitions), your brain creates dopamine. This is one of the scientific reasons people are so attracted to social media; it generates a desirable chemical in the brain that we naturally seek out.

According to Psychology Today, regularly practiced gratitude and increased dopamine can keep you healthier and happier. The hypothalamus has a major influence on your metabolism and stress levels. Recognition and gratitude has been proven to generate higher levels of activity in the hypothalamus, which improves sleep regulation, decreases aches and pains, and increases energy in the body.

So, why does all this matter?

The more we learn about human psychology, the more we can make changes in our lives and our workplaces to take advantage of all the brain has to offer. Understanding rewards and recognition psychology is key to using it to your advantage and building companies that have a competitive advantage. If you have the opportunity to easily and quickly improve your employees’ livelihoods and the productivity of your businesses, why not take advantage?

Rewards and recognition is good for us. It improves the longevity of our careers, health and wellbeing, and drives employees to feel more dedication to their jobs. It transforms our brains on a molecular level, and it’s the best-kept secret to attracting and retaining quality employees.

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Erin Nelson is a Content Writer at Fond with over six years of B2B SaaS marketing experience. Erin has authored dozens of articles on employee rewards and recognition and frequently researches new trends in R&R. In her spare time, you can find her playing music, reading about socioeconomic and gender-based politics, and listening to true crime podcasts.