Fundamentals of Effective Employee Recognition Program

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All employees like to be recognized and appreciated for their efforts. 

An effective employee recognition program is about acknowledging and rewarding your employees’ actions and behaviors that contribute to your organization’s goals. High performances are obvious actions to recognize, but recognition can also be for behaviors that align with your organization’s values and even day-to-day tasks.

Employee recognition can be very effective in driving employee engagement, productivity, and lowering the turnover rate. 

Which Behavior Should Be Recognized?

A common mistake performed by many companies is to focus their employee recognition programs on performance-based recognition, for example, recognizing actions like achieving targets or career milestones. 

However, an effective employee recognition program should be holistic, and here are some behaviors and actions you can acknowledge to establish a good employee recognition culture:

  1. Tangible Performance

The most obvious and straightforward behavior/action to recognize. You acknowledge and reward employees when they have achieved the desired goal, for example: 

  • Achieving sales targets (or other tangible objectives)
  • Successful execution of projects
  • Achieving a specific milestone
  • Presentation of new ideas

And so on. 

Performance-based recognition is quite straightforward to measure and is results-oriented.

  1. Behaviors Aligned With Organizational Values

Your company should have its own unique values, vision, and mission. For example, if your company’s main focus is to provide excellent customer service, then you should recognize client-friendly behaviors that will contribute to better customer service. 

Rewarding people based on company values is an impressive way for companies to motivate their employees to align better with these values. 

  1. Collaboration and Teamwork

A team that collaborates well is a precious asset for any company, so you should recognize actions and behaviors of employees that represent effective collaboration and teamwork. In turn, employees that collaborate well will also motivate and offer help to their peers, amplifying the effects.

  1. Creativity

Recognizing creative and innovative employees will help establish a culture of innovations in your organization, which will also encourage other employees to think outside the box and be more creative. 

  1. Discipline

Some employees may be proactive and more disciplined and don’t need direct supervision to perform their tasks. This quality needs to be acknowledged and recognized to motivate others to do the same. 

  1. Willingness to Improve

Companies shouldn’t only acknowledge employees that are already doing well and achieving their targets, but also those who are willing to learn and improve. Acknowledge employees that treat challenging tasks as opportunities for learning, encouraging them to become more diverse in their skill sets. 

  1. Adaptability and Versatility

There are employees comfortable with going through many different roles and styles of work in their jobs, and this is a very valuable skill to have in today’s fast-paced, dynamic economy. Companies should recognize adaptability and versatility as positive traits if they align with the organization’s values. 

  1. Tenure

If you want to lower the turnover rate, then you should motivate existing employees to stay longer with your company. Replacing employees can be quite costly on your bottom line, and one of the best ways to improve employee retention is to recognize years of service. Not only will the recognized employee find the recognition award meaningful, but other employees will see that tenure means something to the employer, which may motivate them to stay longer with your company. 

  1. Unique Traits

Your employees are unique individuals with unique traits, so you can personalize recognition awards to acknowledge their unique personalities, abilities, and talents. When you can effectively recognize employees for who they are, it can be very meaningful for the said employee. 

How To Effectively Reward Positive Behaviors/Actions

It’s no secret that employee recognition is only as effective as the reward tied to the recognition: give too little, and the recognized employee may not find it meaningful; give too much, and it may hurt your company’s bottom line. 

To be effective, the reward system for your employee recognition program should follow the following best practices: 

  1. Every employee is unique, and it’s crucial to make sure the type of rewards you are giving fits the person you are rewarding. For example, there are employees that would prefer private recognition, and there are those who’d like public recognition. 
  2. Having an employee recognition solution that fits your organizational needs will make it significantly easier to manage your reward system. Guusto is an easy-to-use employee recognition platform that simplifies employee recognition via a gift card-based reward system. 
  3. When the occasion is appropriate (and depending on the employee’s preference), you should acknowledge and reward publicly. This is to make sure the recipient’s peers are also motivated and may attempt to replicate similar performances. 
  4. Recognition should be both timely and frequent. If possible, recognition reward should be given on the same day the positive behavior/action happens. 
  5. Evaluate and measure the performance of your reward system regularly. One of the best approaches is to collect feedback from your employees, for example via employee surveys. 

Three Major Types of Recognition Rewards

Although employee recognition rewards can come in many different types and forms, we can generally divide them into just three major categories: 

  1. Financial VS non-financial rewards

Employees do expect financial rewards: straight-up bonuses, salary raises, and so on, and this type of reward should be a core part of your employee recognition strategy. 

However, non-financial rewards can be more effective in certain situations because: 

  • Employees may feel more comfortable discussing non-financial rewards (i.e. travel accommodations, gift cards, etc.) with their peers
  • Can produce longer-term impacts than financial rewards. 
  • Financial rewards typically require higher investment for a similar impact
  • More affordable for smaller businesses

Finding the right balance between giving financial and non-financial rewards is key to a successful employee recognition program.

  1. Extrinsic VS intrinsic rewards

Extrinsic rewards are tangible rewards that the recipient receives upon performing good behavior or action. A bonus or salary raise is a good example of extrinsic rewards.

Intrinsic rewards, on the other hand, are non-tangible rewards but may improve the recipient’s job satisfaction levels. Examples of intrinsic rewards are career growth opportunities, job titles, or even simple praises. 

Extrinsic rewards are mainly designed to encourage better performance through acknowledgment, while intrinsic rewards are focused on making employees feel valued by the employer to improve loyalty. 

  1. Performance-based VS membership rewards

A performance-based reward, as the name suggests, is a recognition given based on the performance of an employee. Typically given in the form of commissions, group bonuses, incentives, and so on.

A membership-based reward, on the other hand, is given in the form of benefits provided to the employee and may not be directly tied to performance. This can be in the form of a company retreat (that involves the whole team), bonuses given to the whole team, etc. 

Wrapping Up

It’s crucial to make sure your employee recognition program aligns well with your organizational goals and values. Or else, it may lead to confusion and may be counterproductive. 

It’s also important to embrace the fact that your employees are unique: different individuals may prefer different types of recognition. Personalization and punctuality are keys to a successful employee recognition program.

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