As AI adoption accelerates across every industry, executives face mounting pressure to squeeze more out of their organizations — and some are tempted to cut people investments to do it. But new research from Harvard Business Review Analytic Services, sponsored by Achievers, points to a widening blind spot: employee recognition. The study, titled Improving Business Performance Through Appreciation, finds that 66% of organizations say recognition is very important to business performance, yet only 33% describe their own program as very effective.

That gap between belief and execution sits at the heart of the report. Most leaders understand that appreciation matters — the disconnect is in strategy, culture, and technology. Without those three ingredients working together, recognition stays sporadic and its business value never fully materializes.

A Clear Divide Between Leaders, Followers, and Laggards

To understand what separates effective programs from the rest, the report sorts organizations into three tiers based on how respondents rated their own programs: leaders (33%) with very effective programs, followers (37%) with somewhat effective ones, and laggards (31%) whose programs are not very effective. The differences between the groups are stark.

On strategic alignment, 88% of leaders design programs to drive specific employee behaviors, versus 72% of followers and just 28% of laggards. On frequency, 89% of leaders say employees can expect regular, meaningful feedback, compared with 72% and 35%. And on culture, only 21% of leaders cite it as a barrier to frequent recognition — versus 38% of followers and a striking 66% of laggards. Those advantages translate into outcomes: leaders (36%) are far more likely than laggards (8%) to report that recognition drives increased revenue or profit margins.

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Why Recognition Programs Fall Short

The report identifies two practical gaps that keep organizations from realizing recognition's full value. The first is an over-reliance on managers who are already stretched thin. A supportive manager was the most cited internal factor influencing performance (39%), yet 58% named managers being too busy as the leading barrier to employees receiving frequent recognition.

The second gap is technology. Only 28% of organizations use a dedicated platform for reward and recognition. Where such platforms exist, the biggest benefits are supporting peer-to-peer recognition (57%), encouraging more frequent feedback (47%), letting employees choose appealing rewards (41%), and creating organization-wide visibility (40%). Without the right tools, appreciation stays trapped at formal milestones instead of becoming an everyday habit.

Turning Strategy Into Repeatable Behavior

The strongest programs do more than hand out rewards — they make business priorities tangible by celebrating the everyday actions that advance them. Recognition leaders are more than three times as likely as laggards to design recognition around specific behaviors. Workday offers a template, tying its recognition categories directly to strategic priorities like AI adoption and innovation, and requiring every act of recognition to be tagged with a strategically important behavior.

For Achievers CEO Scott Landers, the takeaway is that closing the recognition gap is a business imperative, not a soft perk. When appreciation is frequent, championed from the top, and tied to what matters most, companies are better positioned to advance critical initiatives — because, as he puts it, technology doesn't transform companies, people do. The study surveyed 566 members of the HBR audience between March and April 2026.