Employees want to feel appreciated and valued by their leaders and organizations. Consider this -- when an employee's boss "brags" to his or her boss about something the employee has done to contribute to the success of the organization, it makes the employee feel fabulous. If the compliment is put in writing to upper management, then the employee's feeling of being appreciated is even stronger.
Feeling appreciated for one's hard work and talents is a significant motivator. That terrific feeling results in more confidence, resulting in more self-empowerment, resulting in more creativity and independent problem-solving. What leader wouldn't want all that from his or her employees?
And... this good feeling can have a ripple effect. Not only does the employee feel great about the recognition, but you feel good about complimenting the employee, your boss feels good about the employee's contribution and the excellent leadership being demonstrated by you!
While expressing appreciation to an employee face-to-face is very important, perhaps paramount, this idea of "bragging to upper management" can still contribute significantly to boosting employee spirit and productivity.