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Perkbox research finds perception gaps of up to 35 percentage points between employer and employee views
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Budget constraints remain employers’ biggest issue, but verbal and written recognition alone increases motivation for 72% of employees
1 July 2026, London, UK – Nearly four in five UK employees (78%) say they are more motivated when recognition is combined with financial rewards, according to new research from Perkbox.
Yet, despite widespread agreement on what drives motivation, meaningful recognition remains the exception rather than the norm for many workers.
The Science of Reward Report, which surveyed 4,000 UK employees and 1,000 UK HR leaders, also found that 79% of employees feel more motivated when they are financially rewarded in general, while 80% say recognition for their achievements increases motivation. However, only 37% have received reward or recognition in the past month that made them feel valued, and one in four say they are rarely recognised for their work.
The findings suggest that while organisations understand the value of reward and recognition, many are struggling to deliver it consistently. More than a third of employees say they never receive rewards beyond their salary.
The research highlights a disconnect between employer intention and employee experience. Three-quarters (75%) of employers believe employees feel valued through reward and recognition, and the same proportion say reward and recognition feels meaningful rather than a formality.
HR leaders are clear on what works, however there are perception gaps of up to 35 percentage points between their views and employees’. For instance, 84% of HR leaders believe financial rewards and recognition are most effective when used together, while 88% say the combination increases motivation and 85% believe it strengthens employee loyalty. However, Perkbox’s findings also show 53% of employees say reward and recognition makes them feel valued, while 58% say it feels meaningful rather than a box-ticking exercise.
Despite this, employers continue to face practical challenges. More than a third (38%) cite budget constraints as the biggest barrier to effective reward and recognition, while 30% point to a lack of consistency across managers and 26% cite lack of time or focus.
Tracey Paxton, one of the UK’s leading applied psychotherapists and Clinical Director at Perkbox, said:
“Financial rewards matter, but people also want to feel seen, appreciated and valued for their contribution. The most effective reward strategies recognise both the economic and emotional sides of work. Frequency and authenticity matter far more than the value. A strategy which is well timed and meaningful will always outperform something bigger but impersonal”.
Indeed, the research suggests that organisations do not necessarily need larger budgets to improve outcomes. Verbal and written recognition alone increases motivation for 72% of employees, highlighting the importance of frequency, authenticity and consistency rather than purely financial investment.
Employee consequences extend further. Two-thirds (66%) of employees say reward and recognition strengthen their loyalty to an organisation, and 56% say they are more productive when recognised at work. Almost six in ten (59%) say reward and recognition improve their sense of belonging, and 57% say it positively impacts their wellbeing.
Jenifer Westwood, People Advisor at Vetnique Home of YuMOVE, added her perspective:
“One of the biggest lessons for us is that recognition cannot feel like a formality. It has to be frequent, meaningful and connected to something people genuinely value. We are a fast-growing, vet founded pet health and wellness company and naturally, our people want to feel seen for the work they do. They also value rewards they can use in real life. Our programme through Perkbox helps bring those two things together by making recognition visible across the business, while also giving colleagues access to savings and rewards that can make a genuine difference.
“We have a 99% activation rate, 97% of colleagues have engaged with the platform, and they have sent more than 1,600 recognitions in the past 12 months, including 855 linked to our company values. At a time when many households are thinking carefully about how to make their money go further, our people have also saved more than £41,500 through Perkbox in the last year.”
Tracey Paxton, Clinical Director at Perkbox, summed up:
“Reward and recognition need to be understood not simply as systems or strategies, but as lived experiences that can make or break how valued people feel at work – and how much they are willing to deliver in terms of effort, loyalty and engagement. When someone’s effort is acknowledged, the brain tags that behaviour as worth repeating. Over time, that shapes habits, individual performance and the culture of an organisation”.
