The letters are a unique display of gratitude, Nooyi explains on "The David Rubenstein Show." And they have had quantifiable results.
When Nooyi first became CEO of the now $150 billion company back in 2006, she visited India, where she had grown up, to see her mother.
"When I got home and I sat in the living room, a stream of visitors and random people started to show up," Nooyi tells Rubenstein. "They'd go to my mom and say, 'You did such a good job with your daughter. Compliments to you. She's CEO.' But not a word to me."
Besides a short greeting, the visitors didn't speak to Nooyi at all.
Nooyi realized that it was her mother and her late father who were responsible for much of her success. They deserved to reap the praise.
And yet, Nooyi says, the parents of great leaders and employees rarely get recognition for their work.
"It occurred to me that I had never thanked the parents of my executives for the gift of their child to PepsiCo," she says.
After the trip, Nooyi wrote to the executives that report to her, sharing the story of her upbringing and what happened on her visit. Then she wrote a letter to the parents of those employees, expressing her gratitude.
"I wrote a paragraph about what their child was doing at PepsiCo," she says. "I said, 'Thank you for the gift of your child to our company.'"
Nooyi says the letters opened a "floodgate of emotions."
Parents wrote back to her to say they were honored, Nooyi recalls, and shared the letter with friends and family.
Some of the executives told her, "'My God, this is the best thing that's happened to my parents. And it's the best thing that's happened to me.'"
The letters make her employees feel appreciated and their families feel proud. This likely translates to higher workplace satisfaction, as feeling appreciated is one of the most significant factors contributing to an employee's view of their company.
It also likely contributes to Nooyi's strong in-house approval rating of 75 percent, according to about 1,800 anonymous employee reviews.