Eye On the Prize: Types of Employee Recognition

One of the most impactful ways to foster loyalty in your organization is to recognize employees for their great work. Without employee recognition, workers can all-too-quickly begin to feel undervalued. This can lead to unnecessary (not to mention expensive) turnover or presenteeism. 

Recognition can be challenging in our dispersed modern work environment. When everyone was in the office every day, it was easy for managers to find a time to provide one-on-one group recognition. Today, companies have to be more intentional about creating these opportunities. 

It’s worth the effort, though. Recognition often leads to greater job satisfaction and employees who are motivated to do amazing work. Unfortunately, only about a third of employees report that their organization has a recognition system in place, according to Gallup research.

Most companies — of course — would also love to highlight and reward employees more often. So there’s no need to delay. These five different types of employee recognition will help you confidently reward your workforce!

What is Employee Recognition 

Employee recognition is how a company acknowledges its staffers’ efforts. Your company might praise an employee’s improvements over a year. Or you might recognize important contributions an employee has made for your company.Taking time to recognize employees shows employees that they matter, thus encouraging the entire workforce to put their best foot forward. It supports an environment where people feel comfortable and appreciated. An employee recognition program should aim to highlight achievements.

Importance of Employee Recognition 

Employee recognition isn’t just a nice thing to do — it’s a strategic move to help foster a positive work environment. That can translate into improved business operations. The most notable benefits of recognizing people in the workplace include:

• Talent acquisition. The culture you create at work has a major impact on the kind of employees you attract to your organization. Especially in this digital age, people talk! Potential employees do their research, and the reputation of your company influences whether or not they submit an application for your opportunity. Recognizing employees frequently and authentically helps build an employer brand that attracts top talent.
• Employee retention. Employee turnover is one of the biggest drains on businesses today, and a lack of recognition is a major contributor. In fact, 79% of people who quit their jobs cite a lack of appreciation as a driving force for the change. Giving out kudos and actual rewards is a great way to increase retention in an organization, decrease turnover costs, and save money and effort for the company.
• Organizational culture. Organizational culture exists whether or not you are actively working on it — and how employees are seen and rewarded does a lot to shape that culture. Recognition contributes to a culture of respect and gratitude, making it a valuable part of an employee experience.

Who Gives Employee Recognition?

Employee recognition is powerful, but who’s responsible for giving it? The exciting fact is that employee recognition can come from any direction, from managers and peers to a company’s CEO. While about 40% of employees consider manager recognition the most impactful, employees get real value from receiving recognition from several directions regularly. That ultimately means there are a lot of people you can tap to boost employee recognition at your company, including within the following relationships.

Top-Down Recognition

Top-down recognition is when the employee recognition comes from whoever is at a higher level than the individual employee. Recognition from the top level of your company can help motivate employees. After all, it feels pretty good to get a shoutout from the people who you’re working for. There are two main types of top-down recognition: manager-to-employee recognition and company-to-employee recognition.  

Manager-to-Employee Recognition

Manager-to-employee recognition is when an employee’s individual manager gives them some form of recognition. Many employees listed their manager’s feedback as the recognition that stuck with them most. In addition, feedback from a manager can promote an employee’s desire to do their work well.  

Manager-to-employee recognition doesn’t have to come directly from your manager, though, to be effective. Any manager can give feedback across departments to boost those they work alongside. For example, a finance manager who gets some numbers on how much a design might cost from an employee in the design department can definitely recognize that employee for their work. 

Company-to-Employee Recognition

There’s also company-to-employee recognition that can come from the top. That might mean an official Employee of the Month award or shoutouts shared with the entire company. Acknowledging work anniversaries is also a form of company-to-employee recognition. The great news for employees is that this type of recognition, such as Salesperson of the Year acknowledgement, can often be added to resumes since they’re a pretty big deal. 

Peer-to-Peer or Social Recognition 

Employee recognition doesn’t have to come from someone in a formal leadership position. In fact, it can come from the people an employee works with day-to-day. Typically, an employee’s peers are the people on the same organizational level as them or in the same department. Social recognition can help boost how someone works with others. 

Often, peer-to-peer recognition happens informally. It might just be a teammate thanking an employee for their work as they walk out of the office, or a shoutout at the beginning of a team meeting. Companies can, however, invest in this kind of social recognition. Formal programs can be a way to get peer-to-peer recognition to the forefront of people’s minds. Your company can also glean great insights from formalized social recognition programs. For example, you can learn how well your employees get along, and what employees think contributes to the organization’s culture. 

Types of Employee Recognition

Let’s now address different recognition types, and ways you can implement these opportunities in your organization.

Formal

Formal recognition opportunities tend to be structured or scheduled rewards. That might be a company holiday party. It could be a work anniversary shoutout or a weekly team highlight. Whatever it looks like, formal recognition is something built into your organizational structure. Some other examples of formal recognition include: 

• Celebrations. Anniversaries, holiday parties, employee appreciation days, etc.
• Performance reviews. When you have regular performance reviews, take time with each person to discuss their general performance and successes and contributions to the business.
• Bonuses. Offering bonuses is a formal way to encourage employees to achieve stretch goals and show them that they are appreciated.
• Raises. Increased compensation can go to employees who consistently deliver, who improved lately, or have stuck with you for years. 

Informal

Informal recognition doesn’t have set timeframes, so while it may be less consistent, it has fewer limitations and can reach more individuals. Instead of holding an event, these informal moments tend to be more off-the-cuff and can even seem more genuine. These may include:

• Awards. An award is a great, informal way to recognize employees that have done outstanding work or are consistently bringing valuable qualities to the workplace. Even a small award can make a big impact — something like an “Excellent Brainstormer” award may sound simple, but it shows a teammate their contributions are being noticed. 
• Empowerment. Shoutouts in your weekly team meetings or even a quick direct message online for a job well done can make people feel great, even if there isn’t a specific title or reward attached to that praise.

Non-Monetary

We all appreciate a monetary reward now and then. As already mentioned, this can include formal recognition like bonuses and raises, but you can also go beyond those typical incentives.

• Personalized rewards. Look at what your individual staffers are interested in. Are there specific places you could get a gift card for someone?
• Point systems. Some companies use a point system, where employees receive a set number of points every month or quarter which they can spend on items in a catalog or other platform.

Social

Social recognition is a powerful tool that usually doesn’t take a great deal of time or effort. This type of recognition shows individuals you care about them. It also can act as a motivator for other employees. 

• Peer-to-peer networks. Anytime you can foster a community where peers can complement each other, do it! Managers and company leaders should take the lead and set examples, but encourage it at a peer level, too.
• Group chats. A group chat is a great chanell for employees to give each other shoutouts. They can quickly congratulate someone for a job well done in a casual way. 

Recognition Examples

What do these actions look like in real life? Here are some examples you can use as a model your recognition efforts.

• Verbal affirmation. Small acknowledgements still go a long way, so even occasional praise for doing a great job on a task can be an easy day-to-day way to recognize employees. These verbal boosts of encouragement can also help employees avoid burnout.
• Written affirmation. A thank you note or email is a thoughtful way to appreciate someone’s contribution. This kind of encouragement is a concrete piece of feedback for employees that can remind them of the unique positive impact they have in their role.
• Unstructured recognition. Don’t be afraid to think outside of the box or limit your awards to formal events. Casual compliments, positive feedback, and spontaneous praise are great ways to  acknowledge more people.
• Structured recognition. Offer a reward each month for an employee who goes the extra mile in your department, such as who has the most sales or who had a meaningful impact on a customer.

Employee Recognition Implementation Tips

There isn’t one way to recognize employees or put a program in place — the most important thing is to be sincere and intentional with your employee recognition. These best practices can help you get the ball rolling as you increase recognition in your workplace.

Tailor Praise to the Employee

You are recognizing individuals and reminding someone that the employee knows and appreciates their work. Try to steer clear of generic rewards! Instead, think about what that individual employee would like and get excited about.

Be Specific

When it comes to identifying the work people do, get specific with both their efforts and their praise. Try to avoid saying, “Our employee of the month is awesome!” Instead, look for unique adjectives for your recognition that call out why that person is being recognized now.

Praise on Special Occasions

If someone has a work anniversary or if your company has a yearly holiday party, don’t miss the opportunity to celebrate and highlight your people. 

Employee Participation

Let your employees know about your recognition program! You can get them excited and involved with nomination programs, or typing your initiative to performance goals.

Wellhub Makes Recognition Easy

Your company is constantly striving to be a better place to work, so as you work on acknowledging employees, remember that everything is a work in progress. And keep in mind: employees who are appreciated have a more fulfilling employee experience, which means culture efforts will improve, too.

Recognition is an important way to improve your company culture, but it’s incomplete without a focus on wellness. Including a wellness program in your organization can be an important way to help employees feel recognized and cared for. There’s a reason why 100% of HR leaders say wellness programs are important to employee satisfaction.

If you want to really show that you really care about them, start creating wellness programs that are curated for your unique employees. Talk to a wellbeing specialist for help improving your workforce wellness!

References:

• Achievers. (2021, December 17). 4 Types of Recognition for Employees. Retrieved January 9, 2024 from https://www.achievers.com/blog/4-types-of-recognition-for-employees/.
• Bloznalis, S. (2022, December 16). 18 Employee Recognition Statistics You Need to Know. Retrieved January 9, 2024 from https://www.workhuman.com/blog/employee-recognition-statistics/. 
• Cross, A. (2023, October 13). Types of Employee Recognition: The Who, What, When, Where and Why. Nectar. Retrieved January 9, 2024 from https://nectarhr.com/blog/types-of-employee-recognition. 
• Cross, A. (2023, October 13). 10 Employee Recognition Statistics You Need To Know In 2023. Nectar. Retrieved January 9, 2024from https://nectarhr.com/blog/employee-recognition-statistics.   
• Indeed. (2022, December 9). 8 Types of Employee Recognition (And Why It's Important). Retrieved January 9, 2024 from https://www.indeed.com/career-advice/career-development/types-of-employee-recognition. 
• OC Tanner Learning Group. (n.d.). Performance: Accelerated. Retrieved January 9, 2024 from (https://f.hubspotusercontent10.net/hubfs/8011865/MLS_Group_July2020/PDF/White_Paper_Performance_Accelerated.pdf.