May 21, 2024
March 1, 2024

Building Successful and Effective Employee Recognition Programs

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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.

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 44 million Americans resigning in 2023, one of the highest numbers in decades, retaining talent is more important than ever.

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, recognition makes employees 56% less likely to look for a new job and 3X more loyal to the organization.

If you’re looking for the ROI of recognition, you’ll find it in a lower turnover rate and loyal employees

The Impact on Performance

Recognition programs also have a direct impact on employee performance. Good recognition programs increase productivity and performance by 14% because employees know that when they work hard, they’ll be rewarded. 

Also, 37% of employees agree that recognition is the best motivator, and when an organization gives fair recognition, employees are 3X more engaged.

More motivated employees who are engaged more often and more productive? Yes, employee recognition really does it all.

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 recognition 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.

Examples of peer recognition programs include:

  • On-the-spot programs, where employees can instantly send a message of gratitude to their coworkers whenever they feel like it.
  • Shoutout programs, where employees have a small budget each month to send points to their coworkers.
  • MemoryBooks™, where employees write personalized messages for their coworkers’ service anniversary celebrations.

One Awardco client, ClickUp, built a hugely impactful peer recognition program, where they give each employee $100 every month to reward their peers with. This has had a big impact on their culture of engagement and appreciation, leading to a lot of excitement around their recognition programs.

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, 92% of employees are more likely to repeat a specific behavior after they’re recognized for it. Some examples of performance-based programs include:

  • Weekly shoutout on social media. Shoutout an employee who did great work that week on the company’s social media platform. Add a small monetary reward or gift card to really make the program pop.
  • Employee of the month. Pick an employee each month who consistently exceeded expectations and reward them with points, cash, a public shoutout, or some other fitting recognition that shows how much you value their contributions.
  • Wall of fame. Similar to an employee-of-the-month, creating a permanent shrine to the excellence of your employees is a fun, visible way to show your appreciation.

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.

Incentive Programs

Employee incentives are a great way to drive specific behaviors and build a company culture that is based around healthy behaviors and company values. They can also be used to get employees more engaged and excited about your company!

Here are some great incentive program ideas to help you get started:

  • Wellness incentives. Help your people build and maintain healthy habits by setting up programs that reward things like walking more, eating healthy, going to the gym, meditating, or similar wellness activities.
  • Safety incentives. If your employees work on a manufacturing floor or in similar risky environments, incentivize safety and compliance by recognizing and rewarding those who follow all of your safety practices.
  • Sales incentives. Sales is the foundation of any business growth, so getting the most out of your sales team is key. With a rewarding sales incentive, you can motivate your salespeople in a healthy, rewarding, and sustainable way.

Southwest Gas, another Awardco client, built a customized safety program that included the courses and certifications they needed for their workforce. Then they made sure that everyone who participated was recognized and rewarded. This got everyone excited about safety and has helped them improve their culture.

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!)

While service awards are a great starting point, 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 recognition programs that celebrate 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.

Here are some specific ideas of recognition programs for employee milestones:

  • Service awards. Recognize each employee’s work anniversary every year. Not each year has to include an expensive gift, but a program that at least provides genuine messages of gratitude will go a long way.
  • Employee birthday celebrations. Celebrate employee birthdays the right way with a hand-written card, a snack that the employee likes, and some points that they can spend on themselves in whatever way they want.
  • Personal milestone gift boxes. Are employees getting married? Provide a gift box with marriage-centered gifts. Did they buy a new home? Give them a house-warming box with gift cards for furniture. Did they have a baby? Give them a box full of diapers, toys, etc. 

CPS Group utilized Awardco’s automation and reward network to make their service awards more meaningful, personalized, and timely. This has led to a 20% increase in employee engagement scores!

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. This makes it easy for employees to afford a gym membership.
  • Wellness classes. Hold classes where nutritionists, personal trainers, financial professionals, or mental health professionals provide training for employees in overall wellness.
  • Fitness equipment rewards. Recognize employees’ efforts to work out by rewarding them with a catalog of fitness equipment, such as running shoes, workout clothes, or sports equipment.
  • Spa days. Give everyone a gift card and a day to go to the spa for some good old fashioned pampering. You can also send self-care items in a care box to remote employees or those who don’t have a spa in their area.
  • Therapy help. Provide mental health app subscription fees or subsidize therapy costs.
  • Extra PTO. Reward employees with the occasional extra day off. At Awardco, everyone gets one extra day off after each quarter, just as a way to thank employees for their months of hard work.

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.

Seven Bridges has taken advantage of Awardco’s customization options. Not only have they created a wellness program for their employees, they’ve created nearly a dozen others for employees to participate in!

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.
  • Set up Lifestyle Spending Accounts to provide a regular allowance that employees can spend on approved expenses. (Learn more about LSAs here!)

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.

CloudFit Software has a mostly remote workforce, and they were able to bring everyone together in a culture of appreciation with Awardco. With their powerful recognition capabilities, they’ve seen a 350% increase in employee engagement.

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:

  • Timely
  • Specific
  • Genuine
  • Visible
  • Value-drive

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.

Jefferson Hansen
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An avid lover of fantasy books, a proud Hufflepuff, and a strong proponent of escapism, Jeff has a love of good storytelling. He relies on that for both his professional work and his writing hobby (don’t ask about the 10+ novel ideas collecting virtual dust on his computer).