Employee Recognition Pays Off: Here’s How

Think about the best job that you’ve ever had and reflect on that company for a moment. What made that company so great to work for? Sure, you probably appreciated a generous salary, and yes, a nice benefits package is usually a high priority (Wellhub’s latest State of Work-Life Wellness report shows that 77% of US employees are engaged with their employers wellbeing offerings,); but, we’d be willing to bet your most enjoyable and rewarding jobs have been with organizations that recognize your value and hard work. 

The worst jobs? Probably those that made you feel like another cog in the wheel rather than a person of worth and importance. According to Gallup, employees who don’t receive recognition are twice as likely to say they’ll quit in the next year.

That’s why modern businesses are creating better employee recognition programs to show their support and appreciation for their staff. Recognizing employees is a core principle of creating an excellent company culture, which people are prioritizing more and more when looking for employment. To retain employees, encourage better performance, and improve your workplace environment, your company needs to focus on showing your workforce that they are respected, needed, and seen.

The best part is, recognition can take many forms. For companies that know how to be sincere and are willing to put in a little effort, an effective employee recognition program is completely attainable. This article will guide you through important definitions, best practices, and some of the most successful solutions for your recognition endeavors.

What Is Employee Recognition?

Employee recognition is the act of acknowledging employees for their contributions, especially in social settings. Employee recognition goes beyond casually thanking or complimenting someone; recognizing an employee should be intentioned, pre-planned, and often public. It can be more meaningful when peers have the opportunity to connect and appreciate that employee as well, making the workplace more inclusive and gratitude-driven.

Acknowledging employees doesn’t have to be for big one-time contributions, either—though those moments are still celebration-worthy. Along with high-performance contributions, employees deserve to have their consistent but impactful efforts appreciated, too, such as upholding company values, completing day-to-day tasks, making extra efforts to be a team player, or any other notable or individual initiatives.

Though it can make all kinds of positive impacts, recognition serves three primary purposes:

1. Highlights achievements. When accomplishing something difficult or meeting an objective, it’s more meaningful when someone notices and rewards that achievement. Meeting goals, no matter how small, matter to individuals, and should matter to the organization, too. 
2. Applauds employee efforts. For people making special efforts or sacrifices for a company, some form of acknowledgment should be a high priority for leadership for selfless and ambitious work.
3. Reinforces company values. When others are rewarded for exceptional work or consistent effort, it sets a standard of excellence and reminds all in an organization to live both company and personal values.

These driving points of employee recognition are just the tip of the iceberg for benefiting both employees and businesses. 

Employee Recognition vs. Employee Appreciation

Now, we’ve thrown around the word “appreciation” quite a bit in this article so far, but while recognition is part of appreciation, there is a difference between a company practicing employee recognition and employee appreciation.

• Employee recognition is about what someone does; recognition and appreciation for an employee’s contribution.
• Employee appreciation is about who someone is; appreciation for an employee.

Both are an important part of company culture, but recognition is more centered around specific actions or efforts and rewarding employees for what they do while appreciation focuses on connection and support.

Types of Employee Recognition

There are dozens of creative ways that employees can be recognized for their work, but some of the most common types of recognition in the workplace are related to one of these categories.

Peer recognition

Calling out someone’s great work in a team setting, in a chat, or on social media gives fellow employees and peers the opportunity to congratulate and be inspired by others. We often trust our peers more than those in authority, so enjoying recognition from multiple perspectives and from people who “know” us best is extra rewarding.

Part of peer-based appreciation starts with creating a culture that encourages employees to notice the work of others; or in other words, a great work environment has employees that proactively support and congratulate their team members unprompted. 

Recognition from superior

Now, did we just talk about the importance of peer opinions? Yes. But, that doesn’t diminish how meaningful employee recognition from leaders and other superiors can be. Did you know that 52.5% of employees want more recognition from their immediate manager? Especially when good managers have created relationships with their employees, a sincere compliment or reward can mean a lot to an employee. This kind of employee recognition, also called top-down recognition, shows employees that the work they are doing is appreciated and gives them more confidence and security in the workplace.

Anonymous recognition

Certain forms of recognition don’t necessarily need a named “complimenter” to make an impact. For example, you can have anonymous peer-to-peer recognition where employees can submit a name they believe should be highlighted or rewarded. 

Some companies use an anonymous employee recognition box where anyone can leave a comment on an act, behavior, or accomplishment of a fellow employee, whether they be a peer or a supervisor. This sets aside any worry of “brown-nosing” and also encourages people to be more genuine in their acknowledgments. Many companies that do this use some kind of event or party to reward those nominated or noticed over the past period.

Social recognition

Social recognition is one of the most effective ways to make others feel seen and appreciated. Social acceptance from others is a powerful tool to remind employees that they are respected and valid in their work, especially peer-to-peer. Leveraging social media or other public versions to celebrate employees drives employee engagement and adds a little extra formality and legitimacy to the recognition program.

Private recognition

On the other hand, private recognition has its place, too. While everyone wants to feel appreciated, not all employees love being put on the spot. In other circumstances, some accomplishments deserve on-the-spot recognition that doesn’t necessarily call for a lot of fanfare. In these situations, private recognition is perfectly appropriate and can be just as meaningful—some people may find this approach more authentic and organic.

Recognition for achievement

When someone does something especially difficult, meets certain objectives, improves their work, learns something new, or completes any type of achievement, those efforts should be rewarded with at least some level of employee recognition. Performance-based recognition is one of the most straightforward ways to reward a relatively measurable and focused achievement.

Recognition for behavior

Not all efforts are as measurable as someone meeting a specific goal; there are endless opportunities for someone to act in a way that exemplifies your company brand or values or serves others. If someone does an exceptionally good job communicating with a client or customer, there may not be a way to check a box, but those moments still deserve employee recognition. Noticing admirable behaviors is a great way to show someone you know them as an individual and respect their character, not just what they provide and produce.

How Employee Recognition Impacts All Aspects of an Organization

Workplace recognition is great for the individual, and even more interesting is the effect it has on an organization. Acknowledging people’s work is great for business, morale, and other types of company success. Let’s get into some examples of how a company benefits from employee recognition.

Employee Retention

People that feel appreciated and seen by their company are far more likely to stick around, which means your company will have less employee turnover. In fact, companies with a formal employee recognition program have 31% less voluntary turnover than other companies without any program. Better employee retention also means your company can continue to invest in top-talent employees instead of starting over and spending money on bringing on new staff.

Employee Engagement

Employee recognition programs directly affect employer engagement; one study found that employees who expect to be recognized for their accomplishments are 2.7 times more likely to be highly engaged. If that standard at your organization is to frequently acknowledge employees for their work, they are going to be more engaged and proactive.

Culture

Your culture is going to be impacted by how appreciated your employees are and feel, and culture impacts business efforts. A strong culture shows employees how their work contributes to the company’s success and competitiveness and then rewards those contributions. Plus, recognition reinforces company values, which helps maintain a healthy brand and organizational culture.

Motivation and Productivity 

92% of workers are more likely to repeat a specific action if it’s acknowledged, which is a great way to motivate employees to continue valuable behaviors and practices. It also motivates other employees to perform at a higher level when people are consistently recognized or rewarded for their efforts.

Purpose

Recognition gives employees greater purpose and direction when it comes to their work. Instead of mindlessly going through the motions at work, employees who are frequently recognized can set better goals for themselves and work harder for personal success. This same mindset can direct the efforts of a team, too.

What Behaviors Deserve Recognition?

So, what should you really be rewarding? There aren’t any strict rules for what warrants attention, but here are some of the standard behaviors and achievements employers should keep an eye out for as they put their recognition program into action.

• Examples of upholding company values/culture
• Innovation and creativity
• Self-motivation
• Teamwork
• Improvement
• Growth mindset
• Client retention
• Breaking milestones

Building an Employee Recognition Program

• Define goals. Discuss the goals of your program; are you wanting to retain more employees? Cultivate a better work culture? Encourage greater engagement on your teams? Let these questions inform your program setup.
• Establish funding. Set aside money in your budget that is dedicated solely to rewarding and recognizing employees regularly.
• Set criteria. What qualifies for employee recognition, specifically in the official program?
• Brainstorm ways to recognize employees. What do your employees want? What do they like and what will they appreciate?
• Spread the word. Have supervisors share and encourage their employees to be engaged with the recognition program, especially peer-to-peer driven programs. Post about employee recognition frequently to keep the momentum going, too.

Tips for Managing a Successful Employee Recognition Program

• Be inclusive. People that perform better than expected deserve recognition, but so do people who quietly and consistently do excellent work, so it’s important to find ways to recognize all kinds of people and efforts being made. If you notice the same people being rewarded, try to branch out a bit.
• Offer employee recognition promptly. Timing is everything! You don’t want to plan on recognizing an employee months after a specific event—it likely won’t make the same impact.
• Make employee recognition visible. Find a way to share an employee’s excellence, whether you use a newsletter, email update, social media post, etc.
• Recognize employees frequently. One of the goals you set as an employee recognition program should be to find opportunities to reward people often and encourage peer recognition frequently, too.
• Be specific. Try to avoid generalized language and instead put in extra work to talk about why an employee is being recognized. Just like you are trying to reward exceptional performance, leaders who award others need to put in exceptional effort, too. This is also important for making someone feel genuinely appreciated and not just like a bullet point on someone’s to-do list.

11 Ideas for Recognizing Employees

1. Monetary rewards

Who doesn’t love a little extra cash? Everyone could use more spending money, and some efforts that take a lot of time or sacrifice deserve a cash bonus. When in doubt, follow this timeless advice: “Put your money where your mouth is.”

2. Promotions

If you’ve got an employee who is constantly improving the environment and quality of work around them, that kind of above-and-beyond work calls for some kind of advancement at work. Eventually, grateful words need to translate into a more permanent reward like a promotion or possibly a raise.

3. Gifts

Gifts are another quick and easy way to show some appreciation for a job well done. Variety and customization is the best policy for gift-giving, but you can find creative and unique things to reward people with. Try vouchers, discounts, gift cards, swag, merchandise, tickets, office or work-related items, or some form of entertainment.

4. Wellness programs

What better way to thank your employees than to prioritize and support their health? Healthy employees are far happier at their jobs and even do better work, so the advantages of wellness programs are endless. Supporting the wellness of your employees is a show of genuine care for the individual.

5. Activities

You can reward employees (especially teams or company-wide performances) with big events or activities. Fun parties in the office, company-paid events at entertainment centers, and other team-building activities focused on rewarding and celebrating employees can be a big hit.

6. Special vacations

Excellence deserves a little luxury and escape, which makes an all-paid-for vacation a great reward for stand-out employees. Even plane tickets to a get-away vacation spot are a generous and exciting gift most employees appreciate.

7. Shoutouts at company events

Take time at your next end-of-the-year holiday event to highlight some of the best work or individuals who excelled at their job that year. Even better, cut out the time during regular meetings, weekly, monthly, or quarterly, to give a little shout-out to employees, even if it’s for small successes.

8. Birthday parties or anniversaries

A yearly event like a birthday or work anniversary is a great time to pause and reflect on an employee’s contribution to their company. Recognizing their value by celebrating them with a small party will remind employees that their company knows them, appreciates them, and rewards their loyalty. Besides, everyone deserves something special on their birthday!

9. Free lunch

Employers can gift an employee a free lunch or take that employee out to lunch themselves to say thank you. This doesn’t actually take too much time or cost too much money but can make someone feel special and recognized by a respected authority figure. 

10. Social media appreciation posts

A surefire way to make someone feel seen is tagging them on a social media post. This gives others in the company the opportunity to appreciate that employee’s work and also shows others in the industry that this employee is competent and great to work with.

11. Publish in the company newsletter

A great way to check in with your employee recognition efforts is to have a company newsletter with a section dedicated to highlighting employees. Give a brief description of someone’s achievements or behavior and how it positively impacts the team or work they do.

What Can You Do For Your Employee Recognition Program?

Need more guidance on how to help employees feel valued at work? Wellhub specializes in employee wellness and other ways you can engage and support your workforce. Our service provides an easy way to thank your employees, and our wellbeing specialists can help assess what your company may need most.  Get in touch with us to start improving your employee recognition options by speaking to a Wellbeing Specialist today!

References

• Mann, A., & Dvorak, N. (2016, June 28). Employee Recognition: Low Cost, High Impact. Gallup. Retrieved August 3, 2023, from https://www.gallup.com/workplace/236441/employee-recognition-low-cost-high-impact.aspx 
• Wickham, N. (2023, July 6). The Importance of Employee Recognition: Statistics and Research. Quantum Workplace. Retrieved August 3, 2023, from https://www.quantumworkplace.com/future-of-work/importance-of-employee-recognition