Why Gratitude in the Workplace Is Crucial—And Part of Compensation

Kristin Schinella
Fri, 15 Aug 2025 17:01:29 +0000
Achievement, Belonging, Compensation, Engagement, Feedback, Gratitude-in-business, Gratitude-in-the-workplace, Purpose, Recognition, Talent-retention, Gratitude

Gratitude is not just transactional reinforcement, it’s a connection between people. It affirms belonging, value, and shared purpose. Gratitude also humanizes work, affirming not just what someone did, but who they are and where they belong. It affirms alignment, partnership, and dignity. That is the intersection of strategy and psychology—a space too often overlooked in leadership writing.

"Sara,” an early-career client, recently described to me her growing disenchantment with the PR firm where she’s employed. At her job, she always goes the extra mile. She doesn’t clock out just because the day ends. She manages high-profile accounts (think companies at the level of Fortune 500), and handles work both above and below her pay grade. Clients trust her. Colleagues rely on her. She doesn’t broadcast her efforts—she just gets the job done.

At her recent job review, she received abundant praise: “You’re incredible,” “We want everyone at the company to do things 'Sara’s way,'" and “What would we do without you?” But there was no raise. No bonus. No roadmap. So when I asked her what came next, she said she’s finally taking those recruiter calls.

This is a prime example of how talent walks away. Not because of some big event, but because they are unacknowledged. The door has been opened for feelings of resentment and “why do I bother?”

Yes, Recognition Is a Strategy, But It's Also Deeply Human

Research confirms that being recognized drives measurable outcomes. A study conducted by the John Templeton Foundation found that 70% of employees would feel better about themselves if their boss was more grateful, and according to a Glassdoor survey, 81% of employees say they'd work harder for a grateful boss.

Neuroscience further deepens our understanding of recognition and behavior. When someone receives genuine recognition, the brain releases dopamine, the neurotransmitter tied to reward and motivation. This chemical feedback loop doesn't just feel good—it conditions us to repeat the behaviors that earned it.

This dopamine response creates what researchers call behavioral reinforcement. Each time an employee receives specific, timely recognition, their brain essentially says "do that again." Recognition thus becomes part of one's self-identity—not because people crave praise, but because it signals you matter.

Studies have also linked the lack of recognition with significantly lower levels of engagement. According to research by Zenger Folkman, “leaders rated in the bottom 10% for providing recognition had employees at the 27th percentile on engagement.” In contrast, leaders who were rated in the top 10% for providing recognition had employees who ranked at the 69th percentile in engagement.

In this light, gratitude isn’t optional. It’s part of the total compensation package—especially for employees at the lower end of the pay scale. Still, those making a high salary are more engaged when their contributions are being noticed.

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What Recognition Is—And What It Isn't

Recognition is not:

A generic "great job" on Slack or email

A banal shout-out without detail

A perfunctory token at annual reviews

Always about outcomes—remember that outcomes are not always in the sphere of control

Recognition is:

Specific: The behavior, the impact, the outcome

Timely: Close in time to the contribution

Personalized: Naming what the effort enabled

Rooted in seeing the person, not just their outputs

Authentic in the acknowledgement of effort, process, and the intention behind the work.

Practicing Gratitude in the Workplace

Here are practical practices designed to embed gratitude as both operational and meaningful:

1. Immediate, Specific and Personalized Acknowledgment

Share appreciation within hours or days. I cannot emphasize this enough—a timely, personalized email sent within the first 24 hours of the contribution goes a very long way. For instance: "Your analysis uncovered a strategic gap—without it we might have lost the account. I appreciate your work very much."

This is a specific dopamine-triggering moment that is highly specific to the recipient and this kind of communication makes recognition stick.

2. Contextual Public Recognition

At team meetings—when you know someone values public acknowledgment—name the person, the effort, and the effect. "Sara's attention to detail elevated our delivery and strengthened client relations. I deeply appreciate her efforts on that and all her accounts."

This broadcasts what excellence looks like—and validates individual contribution.

3. Peer-to-Peer Recognition Systems

Platforms or casual channels where colleagues appreciate each other help normalize gratitude beyond hierarchical structures. Peer recognition can often feel more authentic and inclusive.

4. Feedback Loops That Model Gratitude

Asking questions like: "Who helped you succeed this week?" or "What recognition felt meaningful?" helps managers tune their practice and signals that appreciation is culturally expected.

From Transaction to Transformation

Gratitude, when practiced intentionally and regularly, shifts from being a leadership tactic to being the tone of the workplace. It cultivates trust, engagement, and retention through genuine human connection.

In Sara's case, acknowledgment would have changed her relationship to her workplace. Instead, silence made her path clear: she felt unseen, unappreciated, and started wondering why she was working so hard to pick up the slack for others. And now she's looking for another job.

Recognition says: I see you. You're part of something. You matter. And guess what? Demonstrating gratitude is reciprocal—giving it makes you feel good too.

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The Manager's Brain on Gratitude

Here's where the neuroscience gets interesting for leaders: when you practice gratitude—when you actively look for and acknowledge what your team members do well—you're rewiring your own brain for positivity.

UCLA neuroscientist Alex Korb explains that practicing gratitude alters the activity in your anterior cingulate cortex, enhancing your attention to positive aspects of your reality and increasing your ability to benefit from the good things in your life that are often overlooked.

But there's an immediate benefit too: giving recognition triggers the same dopamine release in managers that receiving it does for employees. When you acknowledge someone's good work, your brain rewards you for the prosocial behavior. This creates a reinforcing cycle where recognizing others literally makes you want to do it more.

For managers, this creates an upward spiral. The more you notice and appreciate your team's contributions, the more your brain becomes wired to see those contributions. You become a leader who naturally spots excellence rather than one who only notices problems. According to Korb, this is essentially rewiring the brain for repeat behavior—your brain becomes conditioned to recognize and reward positive actions in others.

The result? Recognition stops feeling like another management task and becomes your natural way of seeing and leading. Your team gets the appreciation they crave, and you get a brain that's literally optimized to see the best in people.

That's the kind of reciprocal benefit that transforms workplace culture from the inside out.