Inadequate reward and recognition

Information for employers and workers about managing the risk of inadequate reward and recognition.

What is inadequate reward and recognition?

If there is an imbalance between worker and team efforts and reward and recognition, it can lead to increased risk of harm. Examples include where:

  • there aren’t reasonable opportunities for skills development and fair career advancement
  • workers do not receive sufficient feedback or recognition
  • reward and recognition is biased or not fair, for example workers are rewarded for the work of others
  • workers skills are not recognised, for example micromanaging simple tasks.

Risks related to inadequate reward and recognition

Impacts on workers and teams can include:

  • emotional and cognitive reactions such as a loss of confidence and difficulty trusting others
  • low morale and motivation amongst teams
  • behavioural changes such as withdrawal, performance issues
  • burnout and depression.

It can also have social and economic costs for the workers, their family and the business. Businesses may experience high staff turnover, poor worker engagement and a negative workplace culture with increased complaints and absenteeism.

How to manage the risks

Employers/PCBUs

Under work, health and safety (WHS) laws, a person conducting a business of undertaking (PCBU) must take proactive steps to prevent risks associates with inadequate reward and recognition, where it is reasonably practicable.

PCBUs must:

  • Eliminate health and safety risks at work, including psychosocial risks. If PCBUs are unable to eliminate risks, they must be minimised so far as is reasonably practicable
  • Manage risks associated with inadequate reward and recognition and consider applying the risk management process (PDF, 556.72 KB) to assist in meeting their duties. This process involves consulting with workers to identify, manage, control, and review risks related to the hazard.
  • Identify and adopt effective control measures.  Find information about how to do this on our psychosocial hazards page.

The Managing psychosocial hazards at work code of practice will help you meet your responsibilities under WHS laws in NSW.

Workers

While at work, workers must:

  • take reasonable care for their own psychological and physical health and safety
  • take reasonable care not to adversely affect the health and safety of other persons
  • comply with reasonable health and safety instructions, as far as they are reasonably able, and
  • cooperate with reasonable health and safety policies or procedures, for example reporting workplace hazards and injuries.

Workers should report concerns to their employer if they experience harm related to inadequate reward and recognition. This will ensure they get support and the PCBU can take action to address the risk.

If you have raised concerns about harmful workplace behaviour internally and no action is being taken, read our ‘Dealing with a psychological health and safety issue at work’ section for further assistance.

Examples of controls and actions

PCBUs must use the hierarchy of controls (PDF, 46.87 KB) and consider all relevant matters within Section 55D of the WHS Regulation 2025 when identifying appropriate control measures to eliminate and minimise the risk of inadequate reward of recognition.

When choosing control measures you must consider all hazards present and how they may interact and combine.

Here are some examples of controls that can help minimise harm.

  • Design fair and transparent performance management processes that include specific performance measures related to the work within a worker’s control, recognition of completed work, and provide relevant resources and support during these processes.
  • Design and implement fair and equitable reward or recognition systems that provide all workers with equal opportunity, recognise their contributions, express appreciation and ensure the right workers receive the recognition for achievements.
  • Implement systems to support performance such as training and mentoring and provide opportunities for development such as allowing workers to take ownership of particular tasks.
  • Provide training to leaders on providing constructive and fair feedback, recognise good performance and matching skilled and capable candidates to career development opportunities.
  • Train supervisors on how to have difficult conversations and manage underperformance in a way that prioritises improvement over blame.
  • Ensure leaders understand and follow reasonable management action principles.
  • Ensure workers are informed and consulted on performance management processes.

Note: These are examples only. You must consult with workers to identify and implement control measures that eliminate or minimise the risks in your workplace, so far as is reasonably practicable.

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