How to Create a Successful Employee Recognition Program

8 Min Read | Success in today’s corporate world does not come easy, owing to the highly competitive nature of the industry. To be successful, is beginning to depend more and more on the…

8 Min Read |

Success in today’s corporate world does not come easy, owing to the highly competitive nature of the industry. To be successful, is beginning to depend more and more on the quality and capacity of a company’s workforce. It is for this reason that an increasing number of organizations have started paying closer attention to the health, wellbeing, and satisfaction of their employees.

And one of the means to achieve the overall happiness of employees at the workplace is through employee recognition programs.

What are employee recognition programs?

Employee recognition programs are a way the workforce and the management of a company communicate and connect with each other, and this is done through programs that reward the achievement of specific goals or high-quality performance of the employees. The primary aim of such programs is to recognize high performing individuals and reward them. Doing this not only reinforces such positive work ethics in the employee but also encourages other employees to start working harder and better in order to receive recognition. In a recent study from the Harvard Business Review, it can be seen that 72% of respondents cited recognition for hard work as one of the key factors that had a significant impact on employee engagement.

A lack of recognition of the employees can have negative impacts on the company. As shown by a study from Gallup, one of the primary reasons that employees leave their organizations is because they do not feel like their work is appreciated or recognized. In a study by CareerBuilder, 50% of employees said that they would have decided to remain at their jobs if their work had been suitably recognized. Another survey by Gallup found that nearly 65% of employees had received no recognition in the past year.

In general, the overall goal of any employee recognition program is a motivated workforce and high company profits. By identifying and rewarding desired behavior, practices and activities among employees that yield desired outcomes, a continuous circle of high-quality performance and greater profits can be established.

How to create an employee recognition program?

Creating an employee recognition program that is suited to your organization doesn’t have to be complicated. Following are a few key steps that can help you start.

 

1. Establish the reason your company needs an employee recognition program:

 

Before deciding to develop and run a program, make sure you identify and understand the why and how your company can benefit from such a program. Take into account the number of employees you have, their levels of performance, their current levels of job satisfaction and whether or not such a program will boost performance levels.

 

 

2. Determine the criteria for recognition:

 

Once you’ve decided to go ahead and develop an employee recognition program, the first thing to do is to determine what the criteria for receiving any rewards should be. The ‘why’ you recognize their work is just as important as the ‘how’ you recognize their work.

This includes setting a certain standard or bar of performance level which could be in terms of the number of work hours, attendance at the workplace, number of projects completed or other such categories.

 

3. Identify a suitable rewarding and recognition method:

 

One of the most important things to consider while establishing any recognition program is to make sure your rewards and recognition go hand in hand with the needs of your employees. A survey by Gallup has shown that employees feel that the best rewards and recognition are ‘honest, authentic and individualized’. 

Successful and effective rewards and recognition have some key characteristics.

  • Relevant: The rewards and recognition received by an employee should be something he/she wants or needs. Rewards and recognition should also be commensurate with the work that is being rewarded. For example, rewarding a highly skilled surgeon who’s worked for over a decade in your hospital cannot be done with something like a hospital keychain or t-shirt.
  • Timely and frequent: By rewarding and recognising your employees on time, immediately after the completion of the desired work reinforces their willingness to continue working at the same high-quality level. In addition to this, it can also make the employees feel that their work has meaning and purpose. The rewards offered must also be frequent and periodic, to ensure that employees know that they can expect a reward for their hard work. 
  • Visible: It is a good practice to award the recognition bonuses or prizes at a special company event or function. Rewarding and recognising  an excellent employee in the presence of his/her peers not only boosts his/her morale but also makes the employees who are present want to work harder in order to receive the honor the next time. Xoxoday’s Empuls is a great tool to make rewards and recognition visible to the employee community. Empuls’ is social media styled feeds help every effort of reward and recognition to be visible in front of the organisation.
  • Personal: Rewards that have a personal touch have shown to be much more appreciated among employees. Such rewards make an employee feel personally appreciated and fosters a sense of belonging and loyalty towards the organization. Xoxoday’s Plum can help this rewarding process to be highly personalized. Plum allows the employee choose a reward of their from amongst 15000+ options available.
  • All inclusive: One of the best ways to ensure the success of your employee recognition program is through allowing a diverse set of people to be responsible for recognizing the hard work of employees. When praise and rewards come from all levels of authority, it fosters a sense of community and belonging among the workforce and management.

4. Announce the program- make sure your staff knows the program is in place:

 

 

Once you have developed the basics of your employee recognition program, the next thing is to ensure that your workforce knows it is in place. 

Most common methods of doing this are either through department memos, office wall flyers or direct announcements. Make sure your entire staff knows that a program has been set up, that their hard work will not go unrecognized and that they can expect rewards for high-quality performance.

 

5. Establish a committee to oversee the smooth conduction of the program:

 

The next step in the process is to establish a trusted committee of members who will oversee the program. This committee will be responsible for recording and comparing the quality of the staff’s performance, determining which employees pass the criteria to be eligible for rewards as well as making sure that the rewards are given to the employees in a timely and suitable fashion.

 

6. Execute the program:

 

Now that the program criteria, reward, and committee are in place, the only thing left is to start your program.

Some of the most successful companies have been implementing such programs with excellent business results.

As reported by Tinypulse.com, companies offer a variety of employee recognition programs. Entrepreneur magazine reports, Groupon, the discount coupons giant rewards its employees with customizable Adidas jackets. Disney, an entertainment powerhouse, reportedly runs over 180 employee recognition programs that reinforce the ideas of friendliness and dependability.

What resources are involved?

Creating and deploying an employee recognition program does require resources at the outset.

A study from World at Work has shown that some organizations can spend up to 10% of the employee payroll on recognition, although the budget for employee recognition programs on an average is 2% of payroll, and the median amount is 1%. The key resources involved are the financial requirements as well as the time and expertise required for its successful run.

Financial: 

The financial resources required come under two categories- the dollar cost of the reward itself, and the cost of designing, implementing and sustaining the program.

      1. The dollar cost of the reward itself can vary depending on the type of reward you plan to incorporate into your program as well as the number of employees you plan to reward. For rewards that recognize the number of years of service from an employee (5 years, 10 years, 50 years), the cost is usually calculated in terms of dollars per employee. For example, putting in place such milestone reward plans can cost the company 35-50 dollars per employee.
      2. The cost of designing and implementing the plan depends on whether or not you outsource the program. Companies can either opt to conduct the program on their own or hire the services of external experts who will undertake the responsibility of creating such a plan. SaaS based rewards and recognition platforms prevent these programs to become cost extensive and highly flexible.

Time:

 

 

Creating a successful program requires time and expertise. 

This time is required in order to research and collect data on the number of employees, employee performance, employee requirements and the comparison of this data to industry standards. Based on whether you choose to outsource the recognition project, or plan to conduct it through your own company management department, the time needed to run an employee recognition program can vary greatly.

Many a time, companies can end up ignoring the importance of creating employee recognition programs because of the required resources. This can be despite evidence pointing to the multifold benefits of running such programs at the workplace. 

Roy Saunderson, President of Recognition Management Institute – a consulting and training company in Montreal, Quebec – tells, “many small business owners don’t think they have the money or time to implement a recognition program. Instead, they are trying to get their business going and are focused on the sales side of a company.”

It is important to remember that such programs need not be a burden on the company budget. By understanding the different types of recognitions available, and determining the ones best suited to your employees, you can ensure minimum financial expenditure, while maximizing profits. The rewards and recognition can be monetary, or can be something as simple as an appreciation note or gift.

What are the different Types of Employee Recognition?

Knowing the types of employee recognition available can help you create a program that will best benefit your employees. There are four main types of recognition rewards:

  1. Public Recognition:

This type of recognition is visible and can be seen by everyone in the company. It can be in the form of a special event conducted for the employee, a certificate or prize, or a public press release in appreciation and praise of the employee’s work. Internal communication tools like Xoxoday Empuls help in this process, through recognition announcements that can be seen by all employees of an organisation.

2. Private Recognition:

Private recognition is not seen by everyone else in the company and is usually rewarded directly from manager to employee. This can be a personal meeting conducted or a gift delivered to show appreciation and gratitude.

3. Promotion:

Promotions can be rewarded by giving the employee a higher job title. The new job comes with more responsibilities and opportunities for the employee.

4. Monetary Recognition:

Monetary recognition involves giving a raise, bonus or other types of compensation such as gift cards or paid holidays.

While it is a common misconception that monetary recognition is the best type of reward, research shows otherwise. A recent survey by Officevibe has shown that when asked, around 82% of employees will prefer verbal praise and appreciation rather than a gift. A survey from SurveyMonkey that involved nearly 1500 employees showed that 32% of employees prefer words of appreciation as a reward, while 25% prefer acts of service. 

Recent studies have shown a rising trend in the popularity of certain employee recognition rewards over others:

  1. Tenure and Service Rewards: These types of rewards help increase employee retention numbers, by recognizing the work of employees who have stayed with the company for a long time.
  2. Spot Rewards: These are special rewards that can be awarded to employees for a specific goal or project that they have successfully completed. Such rewards boost the confidence and morale of the employee who has put in hard work, while also motivating the rest of the staff. 
  3. Social Recognition Rewards: Social recognition serves to build on the overall company culture and workforce environment. A recent study from SHRM has shown that 35% of the financial results of a company are affected by a positive peer to peer relations as compared to only manager recognition. 
  4. Performance Recognition Rewards: Performance recognition is most helpful when you want to replicate previous successes of your staff. Recognizing and awarding high performing employees helps increase employee engagement in the company.

Dr. Ashley Whillians, a specialist in behavioral science from Harvard Business School says, “What really matters in the workplace is helping employees feel appreciated.” Her study, Winning the War for Talent: Modern Motivational Methods for Attracting and Retaining Employees”, has pointed out evidence that employees prefer recognition to cash rewards.

It is clear then, that employee recognition programs profit the company. A small investment today, in order to create and run such a program, can in the long run, have multifold benefits in terms of company growth and development. 

Sources:

  • Harvard Business Review-

https://hbr.org/sponsored/2016/04/the-impact-of-employee-engagement-on-performance

https://www.achievers.com/press/achievers-and-harvard-business-review-analytic-services-identify-link-between/

  • Gallup-Talent Walks:

https://www.gallup.com/workplace/231641/talent-walks-why-best-employees-leaving.aspx

  • CareerBuilder:

https://www.careerbuilder.com/share/aboutus/pressreleasesdetail.aspx?ed=12%2F31%2F2014&id=pr797&sd=1%2F9%2F2014

  • Gallup:

https://www.gallup.com/workplace/236441/employee-recognition-low-cost-high-impact.aspx

  • TinyPluse:

https://www.tinypulse.com/blog/these-4-companies-totally-get-employee-recognition

  • World at Work:

https://www.worldatwork.org/dA/d0815e4c41/trends-in-employee-recognition-2017.pdf

  • American Express Company:

https://www.americanexpress.com/en-us/business/trends-and-insights/articles/6-steps-to-creating-an-employee-recognition-program/

  • OfficeVibe:

https://www.officevibe.com/employee-engagement-solution/employee-recognition

  • Survey Monkey:

https://www.surveymonkey.com/curiosity/employee-recognition-and-retention/

  • Dr. Ashley Whillians:

https://www.hbs.edu/faculty/Pages/item.aspx?num=55066