Happy employees and enterprise profits go hand in hand. In fact, the financial divide between companies that have happy employees and those that do not can be the difference between sustained success and future failure. Think that’s exaggerated? Think again. One study measured the happiness gap at 22% noting that happier workers can be 12% more productive while unhappy workers stifle progress by 10%.

There is no denying that happy employees drive the organization forward. The question is what can you do to ensure that your business has more and not less of them?

The first is to examine happiness from an employee’s perspective. Too many businesses look at their pay structures and their work cultures; they examine flexibility within the workplace and the opportunities employees have for advancement. While all of those things are important contributors to an employee’s outlook, they pale in comparison to the impact encouragement and support has. Employees who are acknowledged for what they contribute are going to be happier than those who don’t.

Here are just a few ways that social recognition can raise employee happiness:

1. It helps to recognize them more

Employees often complain that they don’t get noticed enough for their good work. Not only does this dampen their interest for what they are working on, it dims their enthusiasm for doing anything more than what’s absolutely necessary. Consider this: 82% percent of all employees don’t feel they get recognize enough for their contributions; 40% go on to say they’d put more time and energy into their work if they were recognized more often.

Social recognition can change that. It can help turn up the volume of recognition an employee receives by encouraging the voices of others to chime in. With it, managers and co-workers alike can acknowledge an employee’s efforts and do so at any time, for any reason and from anywhere. With social recognition, employees are less likely to feel that no one is noticing. Instead, as they consistently get acknowledged for the work they do, (including praise for those sometime hidden day-to-day contributions they make on behalf of co-workers) they are more likely to be happy at work.

2. It connects them to their co-workers

Getting recognized is what sustains happiness, but so does strong co-worker relationships. Ask any employee who is unhappy and chances are they will complain that they just don’t belong.

Social recognition can change that too. When an employee is acknowledged for something they have done and when that praise comes from someone they work with, they tend to feel like they fit in better. Why? Peer-to-peer appreciation has more meaning. It’s timelier, it’s authentic and it comes from the same people they are in the trenches with. Workers are happiest when they pursue and share achievements with each other and social recognition keeps the people who work for you connected.

3. It elevates their sense of self

When blueprinting how to make employees happier, don’t underestimate the power of small and meaningful progress in the workplace. The aggregate effect of incremental recognition breeds confidence. It contributes to an employee’s sense of achievement and to their personal growth. It reaffirms that they are in the right place, doing the right things with the right people. In other words, it reinforces that they are indeed a big part of something worthwhile.

All of that makes them feel good about themselves, which translates into happiness. The feeling that they are contributing — even if it is in small steps — not only helps an employee stay engaged, it elevates their sense of self, which in turn, raises their happiness.