What Your Boss and Your Parents Have in Common (And Why It's Costing You Your Best People)
In a recent organisational review, I presented a set of findings to an executive team. The data covered engagement, productivity and performance. The discussion was rigorous and constructive, until we reached one theme … recognition.
The CEO’s response was immediate: “We’re already above market on salary. What more do people want!?” This reaction is frustratingly common and it reflects a persistent misunderstanding. Many organisations conflate reward with recognition, assuming that competitive pay satisfies both. It does not.
Understanding the difference is critical, particularly in certain labour markets (for example, check out the labour-wars in Perth-based companies right now!) where attracting people is difficult, but retaining them is much harder.
Most organisations are relatively sophisticated about reward. They benchmark it, calibrate it, and govern it. They understand that competitive pay attracts talent. What they consistently underestimate is that recognition is what determines whether that talent stays, grows, and contributes at full capacity. Beyond a threshold of perceived fairness, pay becomes a hygiene factor. It matters, but it rarely motivates. At that point, a different set of drivers takes over. Recognition sits at the heart of that experience, and it is often one of the clearest signals of the employee value proposition in action.
Recognition operates on a different axis. It is about the individual and their sense of value within a micro team. It communicates that effort has been noticed, that contribution has meaning, and that the individual matters within the system. This distinction helps to explain a common organisational paradox - companies can pay well but still experience disengagement and attrition. Or worse still, companies experience disengagement, retention and a tumbling productivity because the pay is good and people stick it out, but deliver little.
A Pattern Across Organisations and a Case in Point
We’ve undertaken over a hundred organisational reviews at Interchange over the past decade, and one theme appears with remarkable consistency - employees do not feel recognised. In one of Australia’s largest retailers, we were asked to look specifically at recognition culture. On the surface, recognition was happening. Managers cared and made an effort, but the experience on the ground told a different story.
In the supermarkets division, managers who valued recognition would give team members chocolates as a thank you. The intent was genuine but team members weren’t experiencing it that way. Some of the recipients shared that they were dairy intolerant. Others simply didn’t like chocolate. In the liquor division, a similar pattern emerged. Managers would give bottles of wine to recognise effort. Again, well-intended, but some employees shared that they were Muslim or Hindu and did not drink alcohol. The issue wasn’t a lack of care, it was a lack of capability.
Recognition had been translated into tokens, rather than expressed as understanding and as a result, what was meant as a gesture to acknowledge often reinforced distance.
Recognition Is Psychological Oxygen
Recognition is often treated as a soft lever, however it has been widely studied as a human developmental need. Organisations are asking people to continuously adapt, driven by technological change, AI, and shifting market conditions. In this context, performance depends less on compliance and more on willingness. A willingness to try, to stretch, to let go of what once worked to make way for the new. That willingness is generated by felt safety and value. Recognition is one of the primary signals that creates both.
Decades of developmental research show that early caregiver dynamics i.e. how attention, approval, and boundaries were given or withheld, shape enduring internal templates for safety, worth, and belonging. It is important to understand that;
These templates do not disappear in adulthood. They are carried, largely unconsciously, into organisational life
Workplaces, with their hierarchies, feedback systems, and dependency structures, activate these templates with surprising precision. Recognition is not simply feedback, it is experienced as a signal of self-worth.
The Compulsion to Repair
Systems psychodynamics describes the compulsion to repeat as our tendency to recreate familiar relational patterns throughout life. But repetition alone doesn’t fully explain what we see in organisations. A more useful question is: why would we seek out dynamics from our childhood that didn’t always serve us? Because, often unconsciously, we are trying to repair them.
In adulthood, the workplace becomes the most accessible environment for this to play out. It offers hierarchy, dependency, feedback loops, and critically, authority figures. We are drawn, often without realising it, to people who carry echoes of earlier relationships and we “use” those interactions in an attempt to resolve unfinished internal dynamics.
For example, the high performer who never feels “enough” may be responding to earlier experiences of conditional recognition and are looking to their manager for reassurance. The team member who disrupts may have learned that visibility required provocation and will be seeking alternative signals to change this pattern. And the leader who over-functions, who carries a disproportionate load, often does so from a deeply embedded role of needing to stabilise the system. These may seem like isolated behaviours, but they are patterned responses.
Organisations are systems and much like the families we come from, these dynamics don’t sit neatly within any one individual. They move through teams. Entire functions can become ‘carriers’ of what family systems theory calls the identified patient: the part of the system that expresses what the whole system cannot yet resolve.
This is what I describe as the Compulsion to Repair: the attempt to resolve unfinished relational patterns through present-day organisational life. It leads to a confronting, but ultimately useful, insight. Everyone at work, including leaders, is participating in it. Understanding that forms the foundation an effective recognition practise which is a primary organisational lever for productivity and performance.
From Insight to Practice: What This Requires of Leaders
If we accept that the Compulsion to Repair is at play in every team and every organisation, then recognition is no longer a simple act of acknowledgment, it becomes a form of interpretation. The implication is subtle but significant. Leaders can’t rely on the same, comfortable cues they’ve always used. What worked as “recognition” in the past such as generic praise, a values pin, the 10-years of service plaque (that somewhat resemble a tombstone), just won’t cut it. What’s required instead is a different kind of attention.
Think of it as tuning a radio to a different frequency.
On one frequency, you see the situation: what was delivered, what was achieved, what needs to be done next. On another, you begin to sense the person and the micro team dynamic. What motivates them, what might they be seeking, what sits just beneath the behaviour? Effective recognition sits at the intersection. That is the art of recognition. To understand the individual. To be clear on the direction. And to deliberately bring the two together.
Recognition as a Leadership Capability
If recognition is as deeply rooted as the Compulsion to Repair suggests, then it cannot be treated as a program, a platform or an initiative alone. It is a fundamental leadership capability. It requires leaders to operate on two levels at once; to see the work and to sense the person behind it. In practice, this comes down to three disciplines:
Notice - pay attention to effort and behaviour in real time
Interpret - understand why it matters, both to the work and to the individual
Articulate - connect those two things clearly and specifically
Done well, recognition is simple. It goes a bit like this. “I noticed how you handled that customer escalation yesterday. You stayed calm, you didn’t rush the solution, you got their buy-in and brought them with you. That protected the relationship and the brand. I was super impressed.”
Specific, clear and connected to an action that is aligned to the organsiational direction.
The Implication for Organisations
Most organisations continue to anchor their Employee Value Proposition in reward. It is a necessary consideration. Reward compensates people for their time. It signals fairness.
It positions the organisation competitively in the market. However, it cannot carry the weight that many organisations place on it. Once someone has joined, the question subtly shifts from “Is this worth it?” to “Am I seen here?” That question is not answered through salary.
It is answered, day by day, in the micro-interactions between leaders and their teams Recognition is what sustains commitment. It is what unlocks discretionary effort. It is what creates the conditions for people to adapt, stretch, and grow. It shapes how people experience themselves within the system.
Leaders often look to strategy, structure, and incentives to shift performance. Those levers matter and they are weighted heavily in all boardrooms because they are tangible. But underneath them sits something more fundamental. People perform differently when they feel seen.
When you understand that recognition is a response to something much deeper in human behaviour and your strategic advantage, then you begin to approach it differently. That is when recognition stops being an add-on and starts becoming the mechanism through which your EVP is delivered. Reward may define your offer but recognition is what makes top talent stay and help you deliver on your strategy. And if any of this sounds familiar, I’d love to hear your story.
References
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Recognition had been translated into tokens, rather than expressed as understanding and as a result, what was meant as a gesture to acknowledge often reinforced distance.
