"Then even though you do not see Him, then He certainly sees you." This part shows worship done whilst fleeing and fearing, and is therefore the second level of ihsaan. So if you do not worship Allaah, the Mighty and Majestic, as if you are seeing Him and seeking Him and your soul is encouraging you towards Him, then worship Him keeping in mind that He sees you. So you will then worship Him as one who fears Him and seeks to flee from His retribution and punishment.

This level is held by those having knowledge of these affairs to be lower than the first level. Worship of Allaah, the Perfect and Most High, is, as Ibn al-Qayyim, rahimahullaah, said: 'Worship of the Most Merciful is utmost love of Him, along with the worshippers submission and humility, they are its two pillars.' So worship is built upon these two matters: utmost love, and utmost humility and submission. Love causes one to desire and seek, and humility causes one to fear and flee. This is ihsaan in the worship of Allaah, the Mighty and Majestic. If a person worships Allaah in this manner, then he will become one who is pure and sincere in his worship of Allaah, the Mighty and Majestic. He will not desire with his worship that he is seen by the people, or heard of, nor will he desire their praise. It will be the same to him whether the people notice him or do not notice him.

He will worship with ihsaan in every condition. Indeed part of the completion of purity and sincerity of worship (al-ikhlaas) is that a person should seek not to be seen by the people when he worships, and that his worship should be a secret between him and his Lord. That is unless there is some benefit for the Muslims or for Islaam in his performing it openly, for example if he is a person who is followed and taken as an example and he wishes to manifest his worship to the people so that they should take it as an example to follow; or that he manifests his worship so that his companions, friends and associates should follow his example, then this is good. This benefit which he takes account of may be more excellent and greater than the benefit of keeping it hidden. Therefore, Allaah, the Mighty and Majestic, has praised those who spend of their wealth in charity secretly and openly. So whenever performing it secretly is better and more beneficial for the heart, and causes one to be more humble and submissive, and to turn to Allaah more attentively, then they give in secret. But when performing it openly produces benefit for Islaam, due to manifestation of its prescribed practices, and will mean that the people follow this persons example, then they do this openly. The Believer looks to what is most appropriate. So whatever is most appropriate and most beneficial in worship, then it will be what is most complete and most excellent.

Taken from:
Explanation of Important Lessons by Abdul-Aziz bin Abdullah bin Baz
Explanation of the Three Fundamental Principles by Shaykh Uthaymeen