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Many companies think they are doing a good job of recognizing their employees. However, a recent HBR study found that employees reported not feeling recognized for an average of 50 days. Employees who are not recognized or are disengaged, decrease their productivity and retention dramatically. In fact, only 19 percent of employees consider themselves “very engaged.”
An Employee Recognition Program is a requirement for business success. Frequent, in-the-moment recognition lets employees know their efforts are appreciated — and, employees produce better work when they are recognized for it. Increasing recognition from twice a month to twice a week yielded a five percent increase in customer satisfaction scores. In addition, organizations with highly engaged workplaces outperform their peers by 147 percent in earnings per share.
Companies need to tailor their employee recognition program to their environment to ensure its success. This piece provides everything from the types of recognition to incorporate, to the program’s design, to building a business case for recognition.
What is an Employee Recognition Program?
An employee recognition program is a system through which the achievements and actions of employees are recognized within a company. Recognition is often given on a platform that is shared with internal employees, with points redeemable for rewards accompanying each recognition. The purpose of an employee recognition program is to boost employee morale, improve performance and retain talent.
Types of recognition
Every employee recognition program should include both social, monetary, and peer-to-peer recognition.
Social recognition allows companies to validate and recognize behaviors that align with company culture. This kind of recognition can come in the form of a shout-out or simply a digital badge, recognizing employees. By building a community similar to a personal network, social recognition makes people feel more involved and curious about fellow employees’ work.
Harvard Business Review states that 40 percent of employees would put more energy into their work if they received social recognition more often. In fact, when business units had higher engagement, they outperformed less engaged units and experienced a decrease in absenteeism and turnover. Besides increasing engagement and establishing a culture of gratitude, social recognition is non-monetary, directly translating to reduced costs.
In points-based reward structures, employers distribute points to employees, who can give them to colleagues alongside recognition. Points are redeemable for rewards of their choice, making them more significant than pre-selected gifts. Organizations with these reward systems see substantial increases in sales and customer satisfaction. Other forms of monetary recognition include: gift cards (by far the most common), cash rewards, trips or events.
Recognition helps managers grow as leaders by practicing giving direct, positive feedback. But recognition doesn’t always have to come from the top. In fact, recognition should come from both peers and supervisors to promote the good work of every employee. Recognition platforms that allow any employee to publicly recognize a team or individual can make everyone feel like their work is acknowledged and appreciated. Ensure your program is inclusive and supports peer-to-peer recognition.
How to create an engaging employee recognition program
It takes a significant amount of planning to create an employee recognition program that people believe in and want to use. Below, we share key steps to get started.
1) Design the program
When designing an employee recognition program, be sure it is adaptable so that you can try out new ways to recognize employees. Perhaps most importantly, your program needs to be so easy to use that it fits into every employee’s workflow.
Setting objectives is a crucial first step in designing your recognition program. Eighty-eight percent of companies create a recognition program with the hope of increasing employee engagement and 86 percent start a recognition program with the intent of building a culture of recognition. Ask yourself if these are the same objectives you want for your employee recognition program.
When setting goals, be sure to develop recognition methods that align with your company’s values. Overall, your recognition program should encourage employees to uphold and grow your company’s culture. Remember, employees act according to what their managers actively reinforce through praise and promotion, or passively reinforce by allowance.
Align with the culture
Dr. Natalie Baumgartner, Chief Workforce Scientist at Achievers, states that “culture is one of the most powerful business performance drivers…[but] can’t be viewed simply as perks and social activities.” Instead, she encourages leaders to view culture as “the foundation that informs employee engagement.” One way to align your employee recognition program with your company culture is to tie recognition to company values. Companies looking to implement a recognition platform need to be ready to measure, manage, and invest in cultural alignment.
Plan to spend money on your recognition program. You will need to allocate budget for effective recognition software and for monetary rewards. In addition, find tools that will help you track and modify your program spending. Many tools will allow for flexible pricing options depending on the features that meet your company needs.
Outlining the policies governing your recognition program will help employees understand the hows and whens of recognition. Show employees examples of “good recognition” and how points can correspond to different tiers of rewards. Review these policies during company-wide training sessions pre-deployment so that everyone is on the same page.
Determine global scale
While one-third of organizations describe their programs as global, very few organizations actually offer global solutions. Fifty percent of large organizations have offices in Europe or Asia, but less than 10 percent say their recognition program is available in those locations. If deploying a global platform is truly on your roadmap, select a recognition platform that is built to scale, simplifies administration and spend control, and provides a consistent recognition experience for a global workforce.
2) Introduce the new program
Be prepared to allocate people hours to training and communication. Everyone, from executives, to managers, to individual contributors needs to learn how to use the program and understand why recognition is an important piece of your culture. Typically, companies use company-wide meetings to announce the program and introduce the concept of recognition within the company culture.
Only one-third of companies are training employees in how, when, and why to recognize peers. Managers need access to metrics to assess their team’s participation. Try incorporating recognition training into leadership summits to demonstrate its importance and their key role in building a culture of recognition. Manager training is more common — 61 percent of organizations offer it. However, one-third of organizations fail to train their people leaders in how to recognize their direct reports.
As you develop your training and communication plan, be sure to include an analytics component. Managers should know how to measure employee engagement and participation, on an individual and team level, over time. Set target KPIs every month so that managers are held accountable and reminded to monitor and grow their team’s engagement. Some relevant KPIs might include: recognitions sent, recognitions received, monthly active users, activation rates, recognition index, number of leaders recognizing/participating, and any improvements in engagement scores.
3) Measure the results
Measuring performance in key business areas—like retention, engagement, or customer satisfaction—before and after launching your employee recognition program automatically connects recognition to your organization’s bottom line. This is extremely vital to maintaining buy-in from upper-level leadership.
For example, Meijer tracks specific metrics each month to show their progress toward overall company goals. One surprising result was that people who chose to leave Meijer were receiving statistically identical rates of recognition as those who were asked to leave the organization. These results suggest that recognition is important to retaining valued employees, even if employees don’t call it out as the primary reason for their departure. Meijer also found that after three years of launching their recognition program, they had 10 million recognition moments and became “Great Places to Work” certified for the first time.
One thing to keep in mind is that employees have to want to use the recognition system in order to fully adopt it. Asking for employee feedback on a regular basis can provide invaluable insights for improving your recognition strategy. Hearing straight from the employees themselves via pulse surveys or focus groups is the best way to get a sense of how employees truly perceive the recognition program and get inspiration for new strategic approaches. Furthermore, immediate feedback can alert recognition platform administrators to dissatisfaction with the program or even new ways to engage with employees.
4) Find the right recognition platform
The best recognition platforms make it simple for employees to provide monetary and social recognition across the entire employee network. This shouldn’t be a disruption to their workflow, so take advantage of platforms that have an open API, or easy integrations with intranet portals, instant messaging tools, or learning management systems. Integrating with Workday, for example, gives employees the ability to favorite recognitions so that they can bring them up in conversations with their managers. You want to make sure that your platform is able to deliver on all fronts when it comes to your recognition needs – everything from an easy user experience to real-time data – and has the ability to house all your recognition programs in one place.
Although functionality and user experience are influential factors, post-implementation support services should factor into your decision, as well. Customer Success Managers are a tremendous resource that can help you customize your employee recognition program, build collaborative strategies and campaigns to drive usage, and implement your platform.
The business case for an employee recognition program
While most people think of compensation as a driver of job satisfaction, it doesn’t necessarily encourage long-term engagement or retention. Employee recognition programs have been shown to enhance organizational culture, improve brand recognition, and increase company profits.
Enhance business results
Recognition is highly correlated with improving productivity. Research from Deloitte’s Talent survey showed that employee engagement, productivity, and performance are 14 percent higher in organizations with recognition programs, and a 15 percent improvement in engagement can result in 2 percent increase in margins. Developing employees’ engagement and strengths could increase sales by 19 percent and profits by 29 percent.
Organizations that rate their recognition culture highly are 2.5x more likely to see increased employee engagement, and 90 percent of employees say that recognition motivates them to work harder. Recognized employees perform their best, making them more engaged with their work and their peers. Unsurprisingly, this translates to better customer experiences, as well.
Improve organizational culture
In addition, employee recognition programs demonstrably improve organizational culture:
- Leadership support and recognition are two of the top three most effective non-financial factors for retention.
- Companies whose employees rate their recognition program highly are 79 percent more likely to give their employer brand a higher rating.
- Organizations that give frequent recognition are 41 percent more likely to see increased employee retention, leading to strengthened morale and cost savings.
Get executive buy-in
No matter how much preparation you put into a recognition program, executive buy-in is essential. Start with a comprehensive analysis of recognition use cases, even beyond HR. This will garner the attention of line-of-business stakeholders who likely experience a lack of engagement with their employees. Next, show tangible benefits of a recognition program, such as talent retention, employee engagement, and positive impact to your bottom line. For instance, companies that invest in social recognition are also 4x more likely to see improved stock prices and 2x more likely to see improved NPS scores. Lastly, objectively evaluate the quality and scale of your recognition platform. Picking just any solution is not going to return your investment.
Best practices for employee recognition
It’s tough to know if your employee recognition program is on the right track. A few things to keep in mind are keeping real-time recognition specific, frequent, and fun:
- Make recognition frequent—Frequent recognition builds a strong culture of appreciation and increases the use of the platform. Every time organizations double the number of recognitions in their company, their overall engagement is expected to increase 5 percentage points. Recognizing employees’ achievements on a regular basis shows them that you are continuing to notice their good work.
- Tie recognition to specific behaviors—Whether they are large or small, tying recognition to specific actions reinforces desirable behavior. Plus, 92 percent of employees agree that when they are recognized for a specific action, they are more likely to take that action in the future. This means that employers have the power to direct which key behaviors to emphasize and encourage, particularly those in line with a company’s mission. Any behavior that exemplifies company values should be especially lauded with positive and supportive recognition. Remember to always personalize your recognition and clearly communicate the action you are rewarding.
- Recognize employees in real time for maximum impact—It would feel disingenuous if your manager recognized you today for something you did months ago. Recognizing someone in real time shows that you are consciously paying attention to their everyday efforts and acknowledging their contributions. Achievers’ President and CEO, Jeff Cates, considers recognizing employees in real time to be one of the main ways he became a recognition champion. “When your team notices you’re recognizing their performance, they will want to keep repeating that behavior.”
- Run regular, fun campaigns to encourage participation—Employees will not opt-in to boring recognition programs. Organizations should think of fun ways to incorporate the company’s style and design in their recognition campaigns and pair their launch with certain events. Some companies go live with their recognition programs during the holidays to get people in positive spirits. Others leverage their program during a global gathering, such as their yearly sales kickoff. Some let their employees participate in a Pay It Forward campaign.
Examples of successful employee recognition programs
Successful employee recognition programs can have an immense impact on a company’s culture and profit.
Bayhealth’s recognition program, Driven, positively impacted employee engagement across the organization. Since launch, 97 percent of leaders are active in the program at least once a month, and 84 percent of employees use the program on a monthly basis. When employees were asked if they were satisfied with the type of recognition they receive for doing a good job, they responded with 3.79 on a scale of 1 to 5. That score is 0.10 above the national healthcare average, raising Bayhealth’s engagement from the 16th percentile to the 34th among healthcare providers.
General Motors (GM) had four objectives when it came to their GM Recognition Program: establish one global program and platform, build strategic alignment to accelerate culture change, drive employee engagement, and provide consistency and simplicity. Since launch, the program has seen huge success. Within 30 days of launch, 87 percent of the entire global population was active in the platform sending over 80,000 unique recognitions. People leaders at GM send an average of four recognitions per month and 8 out of 10 managers send recognitions monthly.
Quest Diagnostics is yet another example of a flourishing employee recognition program. Quest Diagnostics uses their recognition program, powered by Achievers, to acknowledge their employees’ amazing daily accomplishments. The company has 100 percent of its managers and supervisors sending recognitions on an almost daily basis.
“1.2 million recognitions in the last six years of this program. That is a very impressive stat – very convincing on why Achievers is a fabulous program for us at Quest.” – Cecilia McKenney, Chief Human Resources Officer
Quest + Achievers: Employee Engagement Partners
Set your program up for success with an employee recognition platform
Selecting the right platform makes an enormous difference in how your recognition program will be received and utilized. Your platform needs to get employees excited about participating and provide employees with rewards they like. Advanced recognition platforms may have additional features where colleagues can easily boost recognitions and redeem points for rewards of their choosing. Your recognition program must be so easy to use that it fits into your employees’ everyday workflow. And your platform should measure return on investment in a way that instills trust in executive and management teams.
Achievers is an award-winning employee recognition software, and has helped countless organizations establish a culture of recognition. Within built-in APIs, a fun and easy user experience, and mobile capabilities, Achievers is easily accessible to anyone, anywhere. In fact, Achievers Recognize partnered with companies like Kellogg’s, McDonald’s, and Discover, driving positive performance and prioritizing people at each organization.
- 107 percent more likely to give their culture of recognition a high rating than organizations that don’t use recognition technology
- 54 percent more likely to give a high rating of their recognition culture than customers of other technology providers
- 3.6x more likely than customers of other providers to give recognition multiple times each month
- 36 percent more likely to see an increase in employee engagement
- 36 percent more likely to rate their employer brand highly compared to non-tech users
- 2.5x more likely to see increased employee retention
Start reaping the benefits of having an employee recognition program at your company by requesting a live demo of Achievers Recognize.
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Employee recognition program FAQ
Are employee recognition programs effective?
Employee recognition programs can be effective when they align with company goals, are consistent, timely, and transparent, and offer customized rewards. They boost morale, improve engagement, and reduce turnover when implemented well, creating a positive company culture. Regular feedback and evaluation are crucial for long-term success.
How do you run an employee recognition program?
To run an effective employee recognition program, start by defining clear objectives and recognition criteria that align with your company’s values. Next, carefully select appropriate rewards and ensure open communication while training both employees and managers. Implement recognition consistently, making sure it’s timely and fair. Encourage peer involvement through nominations and gather feedback for continuous improvement. Monitor program results and adapt as necessary, all while promoting a culture of appreciation throughout the organization. Remember to allocate resources, consider legal aspects, and plan for long-term sustainability to ensure the program’s ongoing success.
What should be included in an employee recognition program?
An effective employee recognition program should encompass several vital components. To begin, clear program objectives and transparent criteria must be defined to guide the recognition process. Meaningful rewards tailored to individual preferences should be offered to motivate and engage employees. Frequent and timely recognition is essential to ensure that efforts are acknowledged consistently. Fostering a culture of appreciation and recognition throughout the organization is crucial for program success. Additionally, effective communication and training should be in place to educate employees and managers about the program’s specifics. Transparency and fairness in the recognition process are paramount, and continuous feedback collection and program evaluation help gauge its impact and make necessary improvements. These elements collectively create a robust and motivating employee recognition program that contributes to a positive workplace environment and employee satisfaction.