Coming up with, implementing, and improving existing employee recognition programs can be daunting. However, because employee recognition improves turnover and increases engagement and productivity, having programs that streamline the recognition process while maximizing the amazing benefits of recognition is important.
Here’s a hint: giving out birthday cards with a handful of signatures on them isn’t an impactful program.
To help you implement and enjoy more effective recognition programs, we’re going to break down everything you need to know about them, including:
- What types of employee recognition programs are best?
- What makes an effective employee recognition program?
- How to overcome common challenges when implementing a program?
- How can technology help run a recognition program?
- What employee rewards are best to offer?
By the end of this post, we hope you’ll feel confident in your ability to start, manage, and improve recognition programs so that your employees feel valued and the company really sees the ROI of recognition.
Understanding the ROI of Employee Recognition Programs
As you consider implementing different types of employee recognition programs, it's important to understand the return on investment (ROI) these programs can offer. Employee rewards and recognition are a growing trend that can combat employee turnover and help you retain your talent. But what sort of returns do you get from investing valuable time and money into these programs?
Employee Recognition's Effect on Turnover
Employee turnover is a significant concern in today's work environment. With over 47 million Americans resigning in 2021, the highest number in the past 20 years, the cost of replacing an employee can range from half to 2X that employee’s annual salary. For instance, if an employee making $50,000 a year quits, replacing them will cost anywhere from $25,000 to $100,000.
However, companies with effective recognition programs have a 31% lower voluntary turnover rate than those without. This means you could expect to spend significantly less in turnover costs. Moreover, 63% of employees who are recognized are very unlikely to look for a new job. If you’re looking for the ROI of recognition, you’ll find it in a lower turnover rate and more money in your pocket.
The Impact on Performance
Recognition programs also have a direct impact on employee performance. Good recognition programs increase engagement, productivity, and performance by 14% because employees know that when they work hard, they’ll be rewarded. This not only motivates your employees but also contributes to the overall success of your business.
Different Types of Employee Recognition Programs
Employees do a lot for a company, and that means there are many different types of recognition programs that you can implement to show those employees appreciation. See some of the most common recognition program types below.
Peer-to-Peer Recognition Program
A peer-to-peer program is one that allows an employee’s coworkers and peers to recognize them for their efforts. Because this recognition comes from peers and friends who often know the employee better than leadership, this recognition is often seen as more genuine and truthful.
Peer recognition can boost performance and feelings of belonging—and the best part is, these are often easy to implement and require little-to-no oversight. Simply encourage all employees to pay attention to their peers and empower them to recognize each other.
Performance-Based Recognition Program
While it’s vital to recognize employees for everything they bring to the table, recognizing employees who work hard and perform at a high standard is also important. When leaders recognize employees who go above and beyond, they reinforce those productive behaviors.
In fact, good recognition programs increase engagement, productivity, and performance by 14% because employees know that when they work hard, they’ll be rewarded. Some examples of performance-based programs include:
- Weekly shoutout on social media
- Employee of the month
- Wall of fame
- Team-specific programs such as sales incentives or customer service awards
The purpose of performance-based employee recognition is to recognize the people in your organization who work hard. They deserve to be thanked for their efforts, and by doing so, they’re more likely to stay at the company and continue to work hard.
Employee Milestone Programs
There are a few different milestone programs organizations can implement, the most common of which is service awards. For every year an employee stays at the company, they get recognized and potentially rewarded with a gift. (Check out our guide for creating an effective service award catalog!)
Service awards are great, and every company should over them. However, employees go through many milestones in both their professional and personal lives. Promotions, graduations, marriages, having a child, buying a home, and retirement are just a few examples.
Creating a recognition program that celebrates these milestones will show employees that the company cares about their happiness and their lives outside of work. And when employees feel valued, they’re more motivated and engaged.
Wellness-Focused Recognition Programs
Burnout, stress, and a lack of work-life balance are running rampant in the workforce today. Stress makes turnover 3X more likely and burnout costs the U.S. $300 billion each year in lost productivity. Because of how common these feelings are, 87% of employees expect their organizations to support their work-life balance.
The good news is that you can create wellness programs that help employees stay mentally and physically healthy. Some good examples of these programs include:
- Gym membership reimbursement
- Access to a personal trainer or nutritionist
- Fitness equipment rewards such as running shoes or yoga mats
- Spa days
- Therapy reimbursement
- Extra PTO
Incentivize healthy behaviors by empowering employees to get the help and support they need. By recognizing your people with cash that can be spent on wellness costs, fitness apparel, or mental health support, employees will be able to combat stress and burnout much more effectively.
Remote Employee Recognition Programs
Nearly 50% of employees are working fully remote or on a hybrid schedule. Companies can implement a few different remote recognition programs to help these employees feel supported and cared for, even if they don’t go into the office. Here are some ideas:
- Offer each employee a budget to buy home office equipment they may need, such as ergonomic equipment, a computer monitor, or nice headphones.
- Create a “care package” program that sends boxes full of goodies to remote employees for holidays, service anniversaries, or just to show gratitude.
- Let remote employees choose some personalized swag so that they can feel like a part of the company.
Remote workers may have a harder time participating in your work culture, but these remote recognition programs will help them get involved and feel supported.
These are just a few ideas of employee recognition programs to help your brain start churning. The best plan is to talk with your employees and customize your programs to fit your culture and your needs.
Award-Based Recognition Programs
Another excellent way to recognize employees' dedication, effort, and excellence is through award-based recognition programs. These awards can be scheduled on a regular cadence, such as monthly, quarterly, or yearly, to maintain a continuous culture of appreciation within the organization. They provide a platform for acknowledging employees' contributions, aligning them with the company's values, and fostering a sense of camaraderie among the workforce.
At Awardco we've named ours The A-Team. The A-Team winners are announced quarterly at our company meeting to three employees who have been nominated by their peers, managers, and other company leaders for their exemplary work. The nominations are not just about performance or meeting targets; they are intrinsically tied to our company's values. The employees who win are those who have not only excelled in their roles but also embodied and championed the company's culture and values.
The A-Team award is a potent recognition tool because it highlights and rewards those who are walking embodiments of the company's values.
To further enhance the value of such awards, consider offering a tangible reward along with the recognition. It could be a gift card, a trophy, a day off, or you match what we do here at Awardco, offering points on our rewards and recognition platform where winners can choose a reward that they want. This tangible aspect of the award serves to make the recognition more memorable, amplifying its positive effects on employee morale, motivation, and retention.
In essence, award-based recognition programs, like The A-Team, help to foster a culture of appreciation, highlight the importance of company values, and encourage employees to strive for excellence. It's a win-win for both the employees and the organization.
Employee Recognition Program Best Practices
What Makes an Effective Employee Recognition Program?
Creating a bunch of recognition programs isn’t enough to help your employees or to see the benefits of recognition—you need to follow these best practices to make your programs effective:
- Engage your leaders. Management needs to know why recognition matters, how best to use each program, and how to lead by example. When everyone from executives downward supports and uses each recognition program, it creates a culture of recognition that spreads to everyone.
- Connect programs to your company values. A value-driven company is built on sustainable growth and innovativeness and often enjoys higher productivity and better quality services. Recognition programs built around company values will drive behaviors that contribute and personify those values, strengthening them in the eyes of employees.
- Make recognition genuine. Employees can smell disingenuous recognition from a mile away. So make sure recognition is timely, specific, and personalized to each recipient. Programs that provide this kind of recognition will be infinitely more effective than those that give out generic “good job” compliments.
- Ensure rewards and rewarding. For recognition programs that offer rewards, they have to feel rewarding for everyone. That’s why we believe giving employees the power to choose their own reward is so important. That way, when employees are recognized, they get a reward they’re actually excited about.
- Get everyone excited. Recognition programs are only effective if they’re being used. To that end, make sure to introduce it to employees, train them on how to get involved, and remind them frequently to recognize. And as mentioned above, leadership should lead by example.
These are the foundational principles of a good employee recognition program. Engage leaders, reinforce values, make recognition genuine, and offer the best rewards—with these best practices, your recognition programs will be a success.
Build and Implement an Employee Recognition Programs that Work
Knowing what makes the best employee recognition programs isn’t enough to implement one effectively at your own company. That’s why we’re going to go over seven steps to follow to create and implement an effective program tailored to your organization.
1. Understand the “Why” Behind Your Program
What is the reason you want to implement a new recognition program? Do you want more engaged employees? Do you want to offer more frequent rewards? Do you want to help remote employees feel more supported? Understanding the “why” gives you a goal to work toward and a direction to go.
2. Define Program Objectives and Focus
Figure out which types of behaviors you want to reward, how you want to reward them, and which rewards you’ll offer. Also consider the medium of recognition you want (physical or digital) and whether the recognition will be public or private. These logistics will ensure that the program has a clear goal and direction.
3. Develop a Case and Get Leadership Buy-In
Create a business case for the program that shows the projected desired outcomes. Familiarize yourself with the benefits of recognition and show your leadership team why the new program will be effective and impactful. (Use our handy-dandy employee recognition ROI calculator to help with this!) Once leadership believes in your vision, things will go a lot smoother.
4. Create a Team of Recognition Heroes
Choose a few leaders and employees to champion the new recognition program. These employees will spread the good word and provide helpful insights. Also, ensure that they know the characteristics of effective employee recognition:
A recognition program built on a team of knowledgeable leaders will find success much easier than one without.
5. Train Managers in the Program
As mentioned above, leaders play a huge role in how effective a recognition program is. If leaders and managers use the program and lead by example, most employees will follow suit. As you start to implement a new program, train your leaders on the why, when, and how of the program.
6. Make It Easy and Visible for Everyone
Make recognizing and rewarding a breeze for everyone. Digital tools, such as Awardco, make it easy to send genuine messages and points to peers and coworkers. Making it easy to participate in the new program is vital for getting everyone involved.
In fact, one of our clients, Paramount, used employee recognition to strengthen and reinforce their culture during a tumultuous merger. By making recognition easy to access for everyone, Paramount succeeded in bringing their global workforce together.
7. Remind, Revisit, and Revise Regularly
Keep your new employee recognition program on top of people’s minds by sending out reminders frequently. And as you get feedback on the program and see the results, don’t be afraid to revise the program or the rewards to make things more effective.
The Role of Technology in Employee Recognition Programs
Technology can help your recognition programs be more effective and reach more people, especially remote employees. Technology doesn’t only help you scale your program, but it can also amplify the positive impacts of your program by spreading the good word and making recognition more visible.
Technology can also help remind employees about recognition, nudge managers to use their recognition budget, or elongate the good feelings associated with recognition by posting it to a social feed.
Do some research into which employee recognition platform is best for you so that you can utilize technology to make your program as effective as possible.
Maximize Employee Recognition Programs Today
Implementing a new employee recognition program doesn’t have to be daunting—we hope that this post has helped you learn how to choose a program, implement it, and improve it so that you can enjoy the increased productivity, engagement, and retention of a recognition-centric company culture.