Building Successful and Effective Employee Recognition Programs

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 is employee recognition?
• 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.

What Is Employee Recognition? 

Employee recognition is the act of showing appreciation or gratitude to an employee for what they bring to the table. It can be given for the work they’ve done, for a special event or milestone they’ve achieved, or just to show appreciation for them as human beings.

Don’t get confused about the difference between recognition and compensation. A paycheck and benefits are extremely important and definitely play a part in retention and job satisfaction. However, recognition is important for conveying value and providing positive feedback that creates a culture of gratitude and excellence.

Employee recognition should be simple, not complicated; rewarding, not intimidating. Think about when you were young and you were taught to say “thank you” after someone did something for you. Recognition is the same idea—it’s simply saying “thank you” to your staff for all they do.

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 and 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

Employee Recognition and 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.

The Impact on Overall Satisfaction

Overall, a good employee recognition program elevates your workforce’s satisfaction levels at work. Research shows: 

• Recognition lowers frustration levels by 28.6%.
• Companies spending at least 1% of payroll on recognition see an 85% boost in employee engagement.
• 93% of employees who feel valued are motivated to do their best work.
• Over 80% of employees agree that recognition improves their experience, relationships, engagement, and happiness.
• 94% of employees who receive daily recognition are satisfied or very satisfied with their jobs.

Remember: It All Comes Down to Being a Good, Caring Human Being

Your employees are humans, individuals who all bring unique value to your company, and they deserve to be shown gratitude. They deserve to feel accepted and appreciated. The amazing ROI of recognition is really just a happy consequence of valuing the uniqueness, skills, and personalities that your employees bring.

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 that it is often easy to implement and requires 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

Organizations can implement a few different milestone programs, 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 for 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!

Employee Award Programs

Employee awards are an important part of recognition—many of the recognition programs listed in this post are for wide-reaching appreciation, which is great! But employee awards are meant to honor the achievements of your top performers and keep them engaged and satisfied.

In addition to rewarding top performers, good employee award programs can incentivize and motivate everyone else to put in greater efforts. Here are some examples of employee award programs to help you brainstorm:

• Monthly awards. Whether you set up an employee of the month, mentor of the month, culture champion, or any other program, it's key to set up clear criteria for how to win, offer rewarding awards, and host a small award ceremony each month, announcing the winner to the company.
• Department-specific awards. Every department has different responsiblities and ways of measuring success. Instead of sticking everyone into a broad award program, let each department come up with their own. THat way, everyone from IT and Marketing to Sales, Quality Assurance, and HR will have ways to be recognized for their work.
• Professional development awards. Growth and learning is important for every employee. After you create professional development programs, award those who participate and achieve their goals to show them you appreciate their efforts.

Visionworks has created multiple custom recognition programs, including an annual award program and Gold and Silver Vision awards to recognize the achievements of their employees on a regular basis.

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

An Ineffective vs. Effective Recognition Program

Sometimes, seeing what a bad recognition program looks like is a great way to ensure your program is on the right track. Dive into the ineffective vs. effective attributes of a recognition program below.

What Makes an Ineffective Employee Recognition Program?

An ineffective employee recognition program can be a missed opportunity to boost morale, increase productivity, and retain top talent. 

Here are some common pitfalls to avoid:

• Too manual. Manual recognition takes a lot of time and a lot of work, especially if there is no way to scale up as the business grows. Processes that involve multiple people and require follow-up on manual tasks are rarely as successful as they could be.
• Inconsistent organization. Every organization, HR team, and employee is different, so it makes sense that with recognition, some people are celebrated while others are overlooked. This inconsistency is a hurdle that leaders often don’t want to try and tackle.
• Insincere feelings. The act of recognizing employees through a program or system may feel insincere, especially depending on the rewards offered. If a company assumes that pins, plaques, or mugs are their only options, they may think recognition isn’t worth the investment.
• Lack of direction of purpose. If a program isn’t value- or purpose-driven, employees can see right through it, and, chances are, they won’t participate. In this case, programs quickly become another item on leaders’ to-do lists for them to unenthusiastically check.
• Minimal rewards. Recognition programs that don’t really reward employees (with either actual rewards, cash, points, or just good feelings) won’t last long.

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 are actually 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 Works: 10 Best Practices to Combat Challenges

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. We encourage you to use these as your best practices and remain on track with your goals.

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.

Understanding the program's goals will give you a bedrock of purpose to build off of.

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.

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.

Once leadership believes in your vision, things will go a lot smoother. Learn how to get leadership excited about elevating your recognition and rewards strategy.

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.

If leaders and managers use the program and lead by example, most employees will follow suit. As you start implementing a new program, train your leaders on the program's why, when, and how.

8. Implement Your Recognition Programs

Implementation needs to be an exciting event if you want the program to stick. If the program just slides into the employees’ day-to-day work without any fanfare, they most likely won’t notice the change, let alone buy into it. 

Here are some strategies for implementing your new recognition program:

• Set up a countdown. For the weeks leading up to your official launch, come up with some marketing to spread the word and activities to get your people involved and excited. 
• Build a brand. Design your recognition program with your brand’s colors and themes, and name the program something fun (for example, The Nest Schools calls their rewards “Nest Eggs”)
• Set up an initial event. A custom program that includes everyone with fun prizes or games is a great way to implement your program. For example, one Awardco client, All Access Staging, reached their manufacturing workforce with a St. Patrick’s Day program on the day of their launch—leaders dressed in green and handed out points to their employees.

During the implementation phase, communication is vital. Communicate to the company that you have a new program, that it’s meant to recognize and reward employees, and how employees can participate in it. 

So choose the right channels for communication: 

• Send out information in your company newsletter a few times leading up to the launch and a few times after the launch
• Announce the new program in a company all-hands meeting
• Create a hype video to share in-person and online
• Use your chosen recognition platform’s automation system to send emails out to everyone as often as you like

9. 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.

10. Remind, Revisit, and Revise Regularly

No matter how much preparation you did, your program will probably need to adjust in time to suit shifting needs, new employees, or changed budgets:

• Establish a feedback loop with employees. Make sure employees have a way to give feedback on your recognition program. Do they feel recognized enough? Are the reward options satisfying? Are they comfortable with public recognition? All this feedback can help you refine your programs.
• Use KPIs to measure success. KPIs, such as recognition rate and employee engagement scores, can help you measure the success of your program. Set goals and frequently track your progress toward them.
• Make iterative changes based on the above. Based on feedback and results you see, make changes to your program to increase its effectiveness and better suit your people. 

Keep your new employee recognition program on top of people’s minds by sending out reminders frequently. As you get feedback on the program and see the results, don’t be afraid to revise it 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 not only helps 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.