A Comprehensive Guide to Employee Recognition [2024 Updated]

This is the ultimate guide to employee recognition for HR professionals and business leaders.

Employee recognition is crucial to retaining and motivating your people. But how to recognize employees? How do you build an effective employee recognition program? How to avoid challenges like low participation or program burnout? 

Use this guide to create a successful recognition culture. Here, you’ll learn:

• What recognition is and why it matters.
• When and how to recognize employees.
• How to build an effective recognition program..

Let’s get started:

What Is Employee Recognition?

In simple terms, employee recognition is the open acknowledgment and appreciation expressed for employees’ contributions to their organization.

By ‘contributions,’ we don’t mean big milestones and high performances. It can be for day-to-day tasks, efforts, ideal behaviors, or a small help. Of course, everyone likes to be appreciated for their efforts. 

Employee recognition is a way to let them know that you notice and appreciate their efforts. This act will boost employee morale and reinforce behaviors that align with company values.

When you implement an employee recognition program, you give employees a way to celebrate each other’s achievements.

Top-down recognition: In this recognition model, the employee’s supervisor, manager, or leadership team notices and appreciates their contributions.

Peer recognition: In a peer recognition model, managers and co-workers are all empowered to recognize and reward the contributions of their peers. You see a teammate do something valuable, then praise them for it. Simple!

Read More: The Future of Employee Recognition: Insights, Trends and Recommendations from the 2024 Report

Why Is Employee Recognition Important?

We have an expanding millennial workforce, a competitive war-for-talent, and a Global crisis like the ongoing pandemic – it is more critical now than ever to focus on employee recognition.

Let’s have a look at some benefits of employee recognition in the workplace.

Higher employee retention

All employees appreciate and respond to recognition actively. As a result, it helps in reducing turnover. A study by Bersin & Associates found that organizations with recognition programs that were highly effective at improving employee engagement had 31% lower voluntary turnover than those with ineffective recognition programs.

Increase productivity

Recognition boosts employee engagement, which, in turn, increases productivity. Studies have shown that a simple expression of gratitude by someone in authority led people to be 50% more productive!

Strengthens company values

Recognition helps employees understand how their work ties to the company values and how their efforts are valued. 83% of HR Leaders say employee recognition strengthens their organizational values.

Improves employee morale

Recognition keeps employees motivated, happy, and they feel good about their work. It reduces stress and can decrease absenteeism. SHRM found that 65% of employees feel the respectful treatment of employees at all levels is a very important contributor to their job satisfaction.

Employer branding

Positive Recognition promotes employee advocacy. Happy employees become active ambassadors of your organization thus helping you attract great talent to your company.

Read More: The Importance of Employee Recognition In improving Employee Engagement

Types of Employee Recognition and Rewards

Looking for ways to recognize employees? To help you launch your employee recognition efforts, we collected some employee recognition ideas that are easily doable in the workplace.

• Shout Out on Social Media
• Handwrite a Letter
• Surprise Day Off
• Take Your Team Out For a Lunch
• Give Positive Feedback In Meetings
• Home Delivery
• Showcase Your Employees Success Stories
• Create personalisable media press kit templates so your employees can share there achievement without spending hours writing about it
• Gamify the Workspace
• ‘A Day In the Life of Employee’ Interview
• Offer Learning Opportunities
• Provide Work From Home Option
• Encourage Your Employees to Work on Special Projects
• Celebrate Work Anniversaries
• Take Your Team on a Trip
• Ask for Feedback
• Create Your Company’s Wall of Fame
• Recognize Employees’ Other Talents
• Run a Press Release
• Start a Mentoring Program
• Recognize the Value of Helping Others
• Make a Personalized Employee Award Certificate
• Cheers From Peers
• Recognize Non-Work Achievements
• Launch Wellness Programs
• Team Trophy

Read More: Peer-to-Peer Recognition at the Workplace [2024 Updated Guide]

Recognize Employees’ Behaviors Based on Company Values

Every company has its unique core values. Rewarding and recognizing your employees for these behaviors is an excellent way for your company to set an example.

Here are Springworks’ core values and how we align them with specific behaviors.

Value: Do it as a team

Employee Behaviours

• Steps up when needed even if it isn’t in the job description
• Supports all workplace initiatives and shows up for them

Value: Own your work

Employee Behaviours

• Sticks to deadlines and schedules
• Isn’t heard saying, ‘That’s not my job.’
• Ensures the quality of work eliminates the need for double-work

Value: Execution is the metric

Employee Behaviours

• Brings a sense of urgency to both individual and teamwork
• Continues to come up with innovative ideas and formulates a plan of action to execute

Value: Create from the user’s perspective

Employee Behaviours

• ‘Will building/creating this improve the user’s ability to perform better at their work?’
• Seeks constant feedback from the user via different platforms Example: EngageWith Anonymous feedback tool
• Participates in meetups and forums where the users hang out

Value: Empathy begins at home

Employee Behaviours

• Recognizes if/when a coworker is stressed at work and needs patient listening
• Keeps the workplace clean and tidy 
• Celebrates small wins by colleagues

Value: Speak your mind

Employee Behaviours

• ‘Strong opinions, weakly held’ 
• Takes time to respond when opposing someone’s opinion 
• Focuses on the message, not the messenger
• Isn’t rude/sarcastic/belittling in tone/content

Value: Demonstrate with ‘Why’

Employee Behaviours

• Acknowledges if the ‘Why’ is not clear
• Has the ability to differentiate between opinion and reason
• Documents the ‘Why’ in long-form

Value: Err on the side of over-communication

Employee Behaviours

• Works on improving long-form writing and practices it in daily communication
• Documents discussions/decisions, takes notes during meetings
• Updates the team about leaves, WFHs, schedules in advance

Value: Frugal, but not cheap

Employee Behaviours

• Spends on tools that automate (parts of) work 
• Treats workplace assets with the same care as personal assets
• Doesn’t make impulse purchases

Value: Cultivate a growth mindset

Employee Behaviours

• Doesn’t worry about asking questions, even if basic in nature
• Pushes self and the larger group to learn new skills
• ‘I don’t know. Let me read up on this and get back to you.’
• Asks for specific feedback from peers and managers on how to improve at work
• Willing to experiment and fail
• Do some courses to grow their career path.

Read More: How to Create Company Values: the Complete Guide

How to Build a Successful Employee Recognition Program

Want to have a recognition program for your organization that actually works? Here are employee recognition program best practices:

1. Define Your Vision

• First, write down your goals and objectives. Is it to improve the level of employee engagement? Or to build a better company culture?
• Do research about the benefits that a recognition program can bring to your company. Read all the tips, tricks, and best practices and implement them into your program.
• It’s important to have a cost estimation (including hidden costs) of recognition programs.

2. Build a Team

Your next step is to build a team to help you implement the program. Appoint a few people who will be responsible for the implementation, managing, and establishment of a recognition program.

When building your team, look for people with the following characteristics:

• Good knowledge of the program benefits.
• Positioned as a team leader.
• Should have an interest in the program.
• Believes in company values. 

3. Understand the Characteristics of Recognition

The next step is understanding the characteristics of the recognition program:

Timely: It is considered a good practice to recognize someone as soon as the deed is done.

Frequent: Don’t wait for a huge milestone or achievement to give recognition. Celebrate small wins.

Specific: Specific recognition helps employees understand exactly which of their efforts contributed to their company’s goal.

Value-based: Think about how a contribution lines up with your company values.

4. Define Clear Program Criteria

If you’re starting a recognition program, you should be clear about what behaviors or actions you’d like to see from recognition programs and how they impact business objectives.

Answer some of the important questions first:

• What type of behaviors should be rewarded?
• How the said behaviors should be rewarded?
• How often should employees be rewarded and appreciated?
• Who should recognition come from?

5. Hear Employees Voice

Make the process fun! Encourage your employees to better understand the types of rewards they’re most interested in.

Brainstorm ideas with your team. Once you’ve drafted ideas for creative rewards, send a survey to employees and ask everyone to rank the options.

Make employees aware of the program, how to use it, the benefits and encourage them to give their feedback and inputs.

6. Measure Program Effectiveness

Your recognition program impacts many different areas of an organization, including productivity, business results as well as brand value. You must measure the effectiveness of the program.

Use data from your recognition program to inform other business decisions. Research if any team or employee is isolated, review how teams are connected, and facilitate collaboration where needed. Once you’ve collected actionable data, make improvements where possible.

Unique Examples of Employee Recognition In Action

It’s not always easy to come up with creative ways to recognize your peers for their great work. For your reference, we have put together a list of unique examples from some of our favorite companies across the globe.

1. Paypal India | Performance-based Rewards

Paypal India’s performance-based awards recognize all full and part-time employees’ actions, behaviors, accomplishments, and performance. 

Employees nominated for this award should display the highest level of good judgment, innovative thinking, commitment, and passion for their job. 

Cash prize awards are Cosmic Kudos (INR 10,000), Blue Moon (INR 15,000), and Shining Star (INR 20,000).

2. FullContact | Paid Vacation

FullContact has a “Paid, Paid Vacation” concept. They offer employees $7500 to go on vacation. 

But there are a few rules: Employees have to go on vacation, or they don’t get the money. They must disconnect as they can’t work while on vacation.

3. Hubspot | Learning Programs

Hubspot believes in employee learning and development, both professionally and personally, to make them better and smarter. Their goal is to enable the employees to always be growing. 

Hubspot provides ongoing learning opportunities like the Free Books Program, the Learn@HubSpot online platform, a mini-MBA Fellows program, HubTalks, workshops, and more.

4. Legal Monkeys | Appreciation Board

Legal Monkey’s Appreciation Board allows every employee to write comments and positive feedback to fellow staff members. 

The use of social media comes to play subsequently when they share the Appreciation Board comments on their Facebook page and Twitter feed.

5. SnackNation | Crush It Call

Each Friday afternoon, the SnackNation team comes together to recognize another team member’s hard work and efforts during that week. Watch SnackNation’s employee recognition hack – “Crush It Call.”

6. Button | Nemonations

“Nemonations” is Button’s large company-wide recognition for going above and beyond expectations. Each Friday at demos, team members can “nemonate” their deserving colleagues who went the extra mile for their organization that week and they pass around a stuffed Nemo (of Disney’s Finding Nemo fame) to the recipients.

7. Typeform | Spontaneous Applause

At Typeform, whenever someone does something noteworthy (however big or small)—anyone can give them a round of applause. And the whole office joins in. Although most people have no idea why they’re applauding, the employee receiving the applause does. It creates a friendly and more human environment.

8. Metis Communications

After you’ve worked for the company for four years, you get the fourth week of vacation every year, and after five years of employment, employees are eligible for Friday vacation days in the summer.

9. Snapchat | Adoption Assistance

Snapchat gives an adoption reimbursement of up to $10,000. Adopting parents are also given 8 weeks of paid leave to bond with the new child.

A Buyer’s Checklist to an Employee Recognition Tool

Not sure what features to look for in the employee recognition tool, how to budget for your program, or evaluate vendor pricing?

This section will provide you a comprehensive overview of how to choose your Recognition and Rewards software.

We know you don’t have time to waste. So, we’ve put together this 5-Step quick Buyer’s Checklist. Let’s get started:

Step 1: Detail Your Objectives

Unless you have clearly described your program objectives, you still have a long way to go on when evaluating potential employee recognition software alternatives. Therefore, document your program objectives and describe the intended benefits you want to achieve.

Common objectives include:

• Improving employee morale
• Increasing employee engagement
• Improving employee communication and collaboration
• Strengthening the company culture
• Meeting the company’s core values
• Increasing productivity
• Improving sales performance
• Improving employee health and wellness

And here are some common benefits:

• Higher productivity
• Higher revenues
• Improved customer service
• Lower turnover
• Improved health and wellbeing
• Higher on-time attendance

Step 2: Make a List of Features You Want

With your objectives outlined, you can begin checking which features align with your recognition program’s target goals. You must consider several important groups of features when choosing your recognition software provider.

Here are some of the most common features and what they’re suited for:

Top-Down Recognition

Facilitates spot recognition specifically by managers when employees demonstrate a target action, attitude, or behavior. 93% of employees who feel valued by their employer are motivated to do their best work.

Peer-to-Peer Recognition

Peer-to-peer recognition is 35.7% more likely to have a positive impact on financial results than manager-only recognition.

Goal-Based Rewards

Allows managers to create goals for the team and to reward them for their progress towards their goals.

Anniversary and Birthday Awards

An employee recognition tool should allow employers to recognize and celebrate employees’ work anniversaries and birthdays.

Point-System

Software that provides a “currency” that your employees earn with each recognition or award. Usually, points can be redeemed for rewards also available through the recognition software.

Bulk Recognition

If you want to recognize more employees at once, are you able to do it in bulk? This feature is a true time-saver! 

Align With Company Values

Provides a way for managers or employees to identify and connect company values with their recognitions.

Custom Branding

The ability to update the software with your company logo and brand colors.

Data and Reporting

Your recognition software should offer to track all the data in one place – earned points, rewards, gift cards, etc.

Integration

Your employee recognition software should provide easy integration with team collaboration tools such as Slack, MS Team, Google Chat, etc.

Some special features include:

Leaderboards

Are there leaderboards your employees and managers can use to check the status of your employee recognition activities?

Pulse surveys

Pulse surveys can gauge employee sentiment on a regular basis.

Intuitive and user-friendly interface

The better UI is, the more your employees will feel motivated to recognize others. Look for a solution that provides an easy, seamless user experience.

Single sign-on (SSO)

Check if the vendor supports single sign-on options to provide a seamless employee experience.

Step 3: Understand Vendor Pricing Models

It’s a good idea to understand how software providers may charge for their products and services before starting discussions.

Setup fees

Not all vendors charge set-up fees. This covers any expected efforts required to be made by the vendor to set up your software/program:

• Software setup
• Onboarding
• Brand customization
• Training

Subscription fees

Most software vendors charge a subscription fee for the use of their platform. Here are some standard pricing models:

• Flat fee per month
• Flat fee per year
• Cost per employee per month

Customization fees

As with all software, if you require customization beyond the basic configurations provided, expect to pay a little extra.

Step 4: Take Demo

It’s time to book demos with the vendor’s sales team and get an idea of how the software performs. We have created a set of questions you can ask all your potential vendors:

• How do you ensure a positive employee experience?
• How can you help us announce and promote an employee recognition program within the company?
• In what ways have you helped your customers?
• How long is your implementation period?
• What is your solution’s competitive advantage over others?
• How does your solution provide a variety of purposeful, meaningful recognition experiences?
• What is the total cost for the entire software?
• How do I measure Return On Investment (ROI)?
• How do you keep the employee recognition software fresh and new?

That way, you will ensure that you are talking with vendors having expertise and experience and can deliver great recognition to your employees too.

Step 5: Making a Decision

How to make a decision about your future recognition partner?

The common mistake buyers make is purchasing solely based on features and budget that currently match their needs. Instead, think of the product as a solution, not software. What you must look for in your potential vendor is a partner that will provide you a solution for new needs arising in the future.

See if these vendors listen to their customers, deliver the functionalities based on their needs, and proactively innovate.

BONUS: Employee Recognition Software Evaluation

The success of your employee recognition program hinges on the support and expertise your vendor provides. We’ve put together a list of all the features you need to build a successful employee recognition program. This checklist will come in handy when you evaluate your employee recognition software:

Many companies are still missing out on the benefits of having a strong employee recognition program, which means you have the chance to gain a significant competitive advantage. The time is now to invest in the future of your organization.

Take a Tour: Learn how EngageWith can create a culture of recognition at your workplace

Role of Technology In Employee Recognition

Employees want frequent, quick, and real-time recognition. It may be hard for you to reach out to each employee and thank them for their efforts. Here is where the role of technology comes into play.

A solution like EngageWith can make it very easy for employers to recognize their employees. In addition, it can make recognition faster, regular, and more frequent. It builds stronger working relationships and a greater sense of belonging. 

It can also be used to celebrate and reward/gift employees on their birthdays and milestones like work anniversaries. Pick EngageWith for your team to create a recognition-rich culture. Try our free demo. 🎉

Here’s how this employee engagement tool makes the act of recognizing your workforce easier:

Instant recognition

EngageWith provides an environment where appreciation can occur for a job well done, potentially within moments of completing it, rather than waiting a month to receive a “thank you” note on their desk.

Send pulse surveys

Send personalized or group pulse for your team to involve, respond, and let their opinion be known. Get deeper insights on what employees think and identify areas for improvement. You can also make survey responses anonymous and empower transparency.

Data-driven analytics

You can easily track how many points you have received, how many points you can give, and have previously given to your teammate and redeem gift cards against your points.

Align with company values

You can add your organization’s core values to EngageWith and keep track of how many ‘kudos’ and ‘shoutouts’ have been given with an organizational value you set up. This will help you understand which values your team upholds while appreciating their teammates.

Deeper engagement

You can build a deeper engagement by empowering everyone to recognize their peers, direct reports, and managers.

Redeemable points

EngageWith is integrated with platforms like Amazon, Flipkart, Ola, Uber. The Kudos and Shoutouts you receive get converted into points for you to redeem on platforms you prefer.

Integration

Its easy integration with team collaboration tools (such as Slack, Microsoft Teams, Google Chat) has made remote peer recognition easy and convenient.

Why EngageWith among so many other Employee Recognition tools? Here’s a comparison chart to find the answer: Comparing Bonusly Pricing and Features: Here are the Top 4 Alternatives

Learn More: The Business Case for Employee Recognition: What HR Needs to Know in 2024

FAQs

Originally published on July 20, 2021 12:58 PM, updated Feb 01 2024