Definition: Recognition and reward refers to the degree to which workers receive acknowledgment for their efforts and contributions, including both formal rewards such as pay and promotion, and informal recognition such as appreciation, feedback, and visibility. Low reward and low recognition are named psychosocial hazards. Workers who consistently put in effort without receiving commensurate acknowledgment experience the imbalance as chronically stressful.
Overview
The effort-reward imbalance model, developed by Johannes Siegrist, is one of the most well-supported frameworks in occupational health. It proposes that chronic imbalance between effort and reward creates a state of sustained stress that predicts psychological disorder and cardiovascular disease. Reward in this model is broader than pay: it includes esteem reward (recognition and respect), career reward (promotion and job security), and money reward.
Many organisations focus on the financial component and underestimate the importance of esteem reward. Workers who are well paid but feel invisible to leadership or believe their contributions are taken for granted still experience the effects of low recognition. Conversely, workers in less generously paid roles can have high psychological wellbeing if their effort is consistently acknowledged and they feel valued.
Recognition also operates at the peer level. Teams in which contributions are acknowledged by colleagues, and in which good work is called out rather than assumed, have measurably better wellbeing than those in which recognition is entirely dependent on the manager.
The absence of feedback is itself a form of low recognition. Workers who receive no feedback on their performance, positive or negative, are operating in an information vacuum that is stressful in its own right.
Why it matters
Low reward and recognition is one of the named psychosocial hazards in the Model Code of Practice. The effort-reward imbalance model is supported by decades of research linking reward deficiency to elevated cortisol, burnout, and psychological disorder. Research also shows that recognition is among the top predictors of employee engagement and discretionary effort. WorkSafe NZ's 2024 guidance includes lack of fairness or recognition as a social and relational hazard. Recognition is also a key element of psychological safety in team settings.
Warning signs
Signs this is managed well
- Workers feel their efforts are noticed and appreciated by their manager
- Good work is acknowledged openly and specifically, not just generically
- Career progression opportunities are visible and merit-based
- Pay is perceived as fair relative to effort and market
- Recognition practices are consistent across teams and not dependent on individual manager style
Signs this is a risk
- Workers describe feeling invisible or taken for granted
- Good work is only noticed when something goes wrong
- Recognition is inconsistent, favouring certain personalities or teams
- No structured feedback processes, leaving workers operating without acknowledgment
- Significant imbalance between effort and pay relative to the market
Control measures
- 1Build regular, specific recognition into manager routines, not just annual reviews
- 2Create team-level practices for acknowledging contributions from colleagues
- 3Ensure feedback is given promptly and specifically, not generically or infrequently
- 4Review pay equity and ensure any gaps relative to effort or market are addressed
- 5Train managers to give recognition as a regular practice, not an exceptional event
- 6Make career progression criteria transparent and consistently applied
Legal context (Australia and New Zealand)
Low reward and recognition is named as a psychosocial hazard in the Model Code of Practice: Managing Psychosocial Hazards at Work. WorkSafe NZ's 2024 guidance identifies lack of fairness or recognition as a social and relational psychosocial hazard. Victoria's Compliance Code includes 'recognition of contribution' as a specified assessment factor under the OHS (Psychological Health) Regulations 2025. The regulatory expectation is that organisations assess and address recognition deficits as part of their systematic psychosocial risk management process.
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Regulatory timeline
How this factor has been formalised in Australian and New Zealand workplace health and safety frameworks.
Regulatory timeline
- 2022
Low reward and recognition named as a psychosocial hazard in the Model Code of Practice.
- 2024
WorkSafe NZ guidance identifies lack of fairness or recognition as a social and relational hazard.
- 2025
Victoria's Compliance Code includes recognition of contribution as a required assessment factor.
Related factors
- Organisational Justice →Whether workers experience the organisation as fair and equitable.
- Leadership →The quality and consistency of management behaviour at all levels.
- Learning and Stimulation →Whether work offers enough challenge, variety, and opportunity for growth.