EMPLOYEE RECOGNITION: Ultimate Guide To Employee Recognition Programs

You are well aware that your staff is extraordinary. After all, you see them every day putting in long hours for your firm. However, when you’re managing employees or operating a business, you have a lot on your plate. As a result, employee recognition initiatives may occasionally be neglected.
No matter how deliberate you are, a simple thank you isn’t always enough to show your staff how much you value them.
Employee recognition can take many different forms. Making recognition a part of your corporate culture can boost employee satisfaction. As a result, your company’s success may suffer significantly.
However, many managers have no idea where to begin when it comes to making employee recognition a part of their culture.
If you want to thank your employees but don’t know how to keep reading. You’ll learn why an employee recognition program is important, how to do it correctly, and the benefits it can have for your business.

What is Employee Recognition?

Employee recognition is the recognition of a company’s employees for exceptional achievement. In essence, the purpose of employee recognition in the workplace is to encourage specific behaviors, practices, or actions that lead to improved performance and successful business outcomes.

Components of Employee Recognition

Employee awards are frequently related to employee recognition. Both of these phrases are frequently used interchangeably, yet they are distinct.
The following are the fundamental distinctions between recognition and rewards:

Recognition

Simply said, recognition is the acknowledgment of one’s inherent worth, behavior, or contribution. It is an ethereal sort of recognition whose value cannot be quantified definitively. It might be a heartfelt “well done,” a high-five, or a special social media shout-out.

These actions contribute to the establishment of an emotional bond between the company and the employee. Employees feel respected and important. It is a fantastic motivator and plays an important part in employee retention.

Rewards

Rewards are a physical source of recognition. It is frequently accompanied by a monetary value. Rewards, in contrast to employee recognition, which is more emotional and personal, are transactional. You obtain an output in exchange for a specific input.

Free gifts, coupons, discounts, or points-based prizes are all acceptable forms of employee recognition. In exchange, you can expect higher performance returns from them. They are more likely to be content, productive, and engaged. Rewards play a significant influence in attracting top personnel to your firm.

It should be noted that a points-based incentive system allows the donor to award points to the recipient. You can assign a monetary value to these points. A points-based system’s structure may differ from one organization to the next. However, these points are frequently redeemed for items, gift cards, or other incentives.

Employee Recognition: Theoretical Foundation

Employee recognition is based on behavioral science and human psychology theories. These theories can help us understand how employee conduct is influenced by recognition.
Two possibilities stand out in particular:

• Recognition is seen as a fundamental human right, and
• The other sees recognition as a form of reinforcement.

#1. Recognition as a Fundamental Human Need

Maslow’s Hierarchy of Human Needs theory informed this viewpoint. According to it, all humans are motivated by some basic requirements. Maslow categorizes these demands into five categories, which are frequently portrayed in a hierarchical pyramid.

Maslow’s hierarchy of needs theory can be utilized to better understand workplace engagement.
An employee’s needs are listed from the bottom of the pyramid:

• Physiological (nutrition, hydration, sleep, physical and mental well-being),
• Job security (salary and benefits),
• Belonging and love (friends, societal, team, family),
• Esteem (respect from others, recognition, significance, and self-assurance) and
• Self-actualization (creativity, learning, and difficulty).

Employees first attempt to address their basic survival necessities. They must maintain their physical and mental health in order to function. Following that, people consider employment stability, wages, and benefits.

However, once these are in place, they seek to meet the following levels of need: belonging and esteem.
Both are significant drivers of our human identities at work. Employee recognition satisfies these two levels of demand.
Employees seek social approval in order to prove their worth among their peers. They want to feel valued, appreciated and acknowledged. When people recognize their accomplishments, it stimulates them to continue working hard.
They strive for self-actualization once they feel welcomed and recognized. This level promotes creativity and learning.

#2. Reinforcement via Recognition

In psychology, reinforcement refers to anything that increases the likelihood of something happening. It is a sort of communication that motivates others to act in a certain way.
The idea behind using recognition as a kind of reinforcement is as follows:

Employees are more inclined to maintain specific conduct if it is appreciated. It establishes a theoretical foundation for the beneficial influence of recognition on performance.
Positive reinforcement in the form of employee recognition is a sort of positive reinforcement. More of it should be added to the system to improve the possibility of the desired action. Negative reinforcers, on the other hand, are withdrawn from the system in order to encourage action.

Why is Employee Recognition?

The workplace is undergoing a shift. We now have:

• A growing millennial workforce,
• Competition for talent,
• Pandemics are examples of global crises.

Because of these changes, it is more important than ever to focus on employee recognition.
Let’s look at some of the advantages of a good employee recognition program.

#1. Increased Employee Retention

The majority of businesses suffer from significant employee turnover rates. A poor recognition culture is one of the primary reasons behind this. 79% of persons who quit their jobs report a ‘lack of appreciation’ as the reason for their departure.
Employee engagement in their jobs increases when they are properly recognized. As a result, they tend to remain longer. This results in lower turnover and increased retention.

#2. Increased Employee Engagement

Employee recognition is a major motivator of employee engagement in a business. Employees feel valued when their contributions are acknowledged on a regular and timely basis. They start putting in extra effort to keep up the good work. It also leads to more productivity and improved customer service.
72% of firms agree that recognition has a good impact on engagement. (From the Harvard Business Review).

#3. Enhances Workplace Relationships and Teamwork

People, it is believed, do not leave their work. They abandon managers. As a result, managers must cultivate strong relationships with team members.

Managers’ frequent recognition can assist build manager-employee relationships. It facilitates communication, fosters trust, and bridges gaps between them. Managers should be instructed on how to effectively acknowledge staff for improved results.

Employee recognition also aids in the improvement of peer connections. A culture in which peers freely support one another is beneficial to team morale and engagement.

#4. Establishes a Culture of Recognition

Recognition spreads and is frequently repaid. Everyone enjoys being recognized. At the same time, people enjoy expressing gratitude, cheering, and supporting others. It gives a sense of accomplishment and aids in the formation of strong bonds with peers.

When employee recognition becomes the norm on a regular basis, it has a significant impact on the corporate culture. It fosters a constructive environment in which people value the efforts, qualities, and strengths of others.

#5. Enhances the Company’s Values

Employee recognition, according to 83% of HR leaders, enhances organizational values. (Globoforce)
Companies may have several basic concepts such as dedication, honesty, timeliness, excellence, and so on. They would like their personnel to work in accordance with these ideals. As a result, they create incentive and recognition programs that are aligned with company values.
When employees display desired actions, they are recognized. This reinforces the organizational principles in their daily behaviors.

#6. Create Employer Branding

A strong recognition culture contributes to the value of the employer brand. Candidates are drawn to companies that value their employees’ contributions. Positive employer branding becomes more important as the war for talent intensifies.

Employee advocacy is also encouraged by recognition. When employees are satisfied with their jobs, they are more likely to tell others about it. As a result, they become ardent advocates for the organization.

#7. Enhances Employee Motivation

Employee morale improves when leaders recognize an employee’s contribution to the company’s success. It keeps employees engaged, happy, and satisfied with their work.
Employee recognition has a physiological effect on performance as well. The body produces ‘oxytocin’ when it is acknowledged or loved. According to studies, persons who are under the effect of this ‘love hormone’ perform better. It relieves tension and may reduce absenteeism.

Which Employee Behavior Should Be Recognized?

Most recognition programs reward employees based on their actions, such as

• Achieving aims or establishing goals,
• Outstanding presentations or novel ideas,
• Achieving a professional milestone, among other things.

These acts, however, are based on specific features that make employees great. Here are some characteristics you may look for in your staff to help you create a positive corporate culture:

#1. Company Values-Based Behaviors

Every business has its own set of core principles. They could be based on punctuality, client-friendliness, integrity, humility, adaptability, transparency, or other characteristics.
These fundamental values established by leadership serve as expectations for employees. Companies can set a good example by rewarding employees for these characteristics.

#2. Creativity and innovation

The roots of creativity are creative and distinctive ideas. An innovative employee will find new ways to solve old problems. They generate innovative and important ideas and should be encouraged to do so. This will motivate people to use their imagination and think outside the box.

#3. Motivation from Within

Some employees are not required to be supervised. They are proactive and internally driven to do a good job. Their inner motivation must be acknowledged.

#4. Team Member

Team players work well together and are valuable assets to have in the business. They are unafraid to encourage and assist others. As a result, you should recognize this trait by publicly praising it or rewarding it.

#5. Willingness to Learn and Develop

The first employee to volunteer for duty should be recognized by their employer. These employees view problems as learning opportunities. Even if they fail, they are eager to learn from their mistakes. Encouraging this attribute helps employees develop skills in a variety of areas.

#6. Adaptable

Employees go through numerous different roles and work styles throughout their professions. They are always confronted with fresh difficulties and catastrophes. Those that are able to adjust to these changes and perform successfully should be recognized. It is a valuable talent in today’s fast-paced and dynamic economy.

#7. Performance-Based Rewards

This is the easiest type of employee behavior to spot. If they have attained the targeted aim, you appreciate and praise them. It is straightforward to measure and focuses on the achievement of their objectives.

#8. Service Years

People are leaving companies for shorter periods of time. Between 25 and 34 years old, the average employee tenure is 3.1 years. (From the Bureau of Labor Statistics)
The expense of replacing these employees might be rather substantial for the company. Recognizing years of service demonstrates that an employee’s tenure is important to the business. This also aids in employee retention.

#9. Individual Worth

Employees want to know that they are respected as people. They want you to acknowledge them for who they are rather than what they do. You can recognize your employees for their distinct qualities, personalities, and capabilities.

Methods of Employee Recognition

Companies are employing multifaceted strategies to ensure that their staff feel valued.
Let’s take a look at how successful firms create a dynamic culture of recognition.
Employee recognition techniques can be categorized into the following categories based on who offers them:

#1. Recognition from the Top

Clint Pulver writes in his book “I Love It Here” about the essential role leaders play in fostering a culture of recognition at work. They are responsible for establishing a company’s basic principles. As a result, they would naturally want staff to adhere to it.
Leaders must commend employees who exhibit behaviors that reflect business values. It has a significant impact on morale and engagement.

#2. Direct-Report Identification

Managers have a critical role in instilling organizational values in personnel. They can accomplish this by providing frequent recognition for employee efforts.
They are the most knowledgeable about what an employee does all day. As a result, it may turn out to be the most genuine admiration. Managers are also more likely to understand what form of recognition will pique the employee’s interest.

#3. Peer-to-Peer Appreciation

Recognition from peers has a special significance and can have the greatest impact on employees. Peers who frequently collaborate closely notice characteristics that supervisors neglect. Recognizing each other’s contributions improves their friendship and fosters trust. This, in turn, enhances levels of engagement and retention.
Peer-to-peer recognition is self-sustaining as well. Leaders rarely need to act to keep things running.

#4. Everyday Recognition

These procedures may be used to recognize daily efforts. They are frequent, inexpensive, and frequently intangible. These may be polite nods, a slap on the back, or an email thanking employees for their efforts.
Everyday recognition can be viewed as a token of gratitude. They can be useful in maintaining daily morale.

#5. Extraordinary Recognition

It emphasizes honoring employees who go above and beyond what is expected of them. You may see remarkable outcomes such as cost savings, innovation, exceeding expectations, and so on. It is typically comprised of formal recognition in front of the entire team.

#6. Career Appreciation

It involves recognition of professional achievements, years of service, and substantial career advancement. Employee recognition is related to several stages of an employee’s lifecycle.

#7. Celebration Activities

Instead of praising performance, these events celebrate accomplishments. Combining these celebrations with team successes strengthens teamwork.
Teams, for example, would want to celebrate the completion of a difficult project. Individual efforts might also be recognized on work anniversaries or birthdays.

Creating an Effective Employee Recognition Program

There are some inherent flaws with existing employee recognition programs:

• Objectives that are not well specified
• Inconsistency with company values
• Uncertainty regarding the significance of recognition

So, how do we address these concerns?

Here are some things that an effective employee recognition program must have/do:

#1. Clear Sight

Before you launch an employee recognition program, you must define its objectives. Do you want to increase engagement or retention? Or maybe you wish to increase your sales. It is preferable to align your program’s objectives with the overarching mission and aims.

#2. Timely and regular

Every accomplishment, no matter how big or small, should be recognized at the appropriate moment. It should also be provided frequently and on a regular basis. Recognizing an employee for something they performed months ago may not be very helpful.

#3. Simple and simple to use

It should be straightforward for individuals to acknowledge one another’s contributions. Employees may easily recognize their peers in an effective employee recognition program. However, the formal recognition process should be simple to utilize as well. Technology-based awards and recognition software can be extremely beneficial in this situation.

#4. Specific and adaptable

A thriving recognition culture describes the type of behavior that is expected of employees. Employees are more likely to perform the recognition when they are aware of it.
For employees to identify each other on the go, programs should also be agile and adaptive. Through appreciation, it also makes it simpler for distant teams to stay connected.

#5. Inclusive

A strong employee recognition campaign necessitates cross-company cooperation. Top management should always promote and participate in gratitude. Employees won’t take it seriously unless they do. Employees must play an equal role in honoring other employees.

#6. Impact Evaluation

Your recognition program may already be operational. However, you must also assess its influence on engagement and well-being. The best approach to finding out is to ask the personnel.
Do they feel sufficiently appreciated? Are they inspired to do more for the team? Employee surveys are quite inexpensive.

#7. Changing and adaptable

Business expectations evolve as the time’s change. Employee requirements change along with it. The finest employee recognition programs are those that adapt and improve over time.

Technology’s Role in Employee Recognition

Employees want regular, prompt, and immediate recognition.
It may be impossible for you to approach each employee and express your appreciation for their efforts.
This is where technology enters the picture.
Employers can use a digital solution to easily reward and thank their personnel. It can improve the smoothness, speed, consistency, and frequency of recognition.
Let’s have a look at how:

#1. Recognition in an Instant

It’s an instant gratification world. Employees see receiving recognition for something they did months ago as meaningless.
It should also be emphasized that the current employment is dominated by millennials. They prefer on-the-spot recognition over annual evaluations. They require recognition as soon as they achieve a goal or thrive at work.
You may rapidly acknowledge employees for their efforts with a digital employee recognition solution. You may post an appreciation post in seconds, and they will get it in real-time.

#2. Adaptable Rewarding

Employees can choose their incentives with the help of digital recognition technology. You can award them with redeemable points using a points-based system. They will be able to select from a variety of incentive options, such as gift cards.

#3. Peer-to-Peer Recognition

Employees can also participate by recognizing peers using a digital solution. It contributes to the development of a culture of recognition, motivation, and enjoyment. Peer-to-peer recognition can be made enjoyable by using employee recognition systems. Employees can engage and interact with one another through a real-time social feed.

#4. Recognition that is both automated and personalized

Employees appreciate being wished on significant occasions such as work anniversaries and birthdays, as well as Employee Appreciation Day. At the proper time, a digital employee recognition system can recognize them automatically.

#5. Mobile Recognition

Employees do not simply work on computers and laptops in the modern world. They also communicate using other technologies such as tablets and mobile phones.

#6. Include Leadership

When senior executives and stakeholders participate in employee recognition programs, they are more successful. Panel Awards are one approach to incorporating leadership into the program. It is a multi-level approver award system that gives employees an equal and fair chance of winning.

#7. Management Made Simple

It might be tough to manage an employee recognition program for a large workforce. This is especially true in the case of a reward system that was created by hand.

#8. Showcase Your Brand

White-label solutions for digital employee recognition systems may be available to match your brand. You can personalize these tools to fit your company’s logo.

#9. Insights Based on Big Data

A recognition approach based on technology aids in measuring the impact of recognition using valid data. You can choose who the key players are on your teams. It is also simpler to spot gaps in your program.

#10. Integrations

Companies employ several team collaboration solutions such as Microsoft Teams, Slack, and others. Every business also has its own set of HRMS software.

#11. Recognize Your International Workforce

Most businesses have gone worldwide these days. Employees from all across the world work together to coordinate. Such employees are nearly impossible to recognize through an in-house recognition program.

Digital technology makes recognizing worldwide personnel easier and faster. It is also critical in instilling corporate values in the worldwide workforce. Companies may now communicate the importance they place on their entire team more effectively.

#12. Budgeting Made Simple

A manually administered employee recognition program has numerous hidden expenses. Time, documentation, collaborating with a worldwide staff, assuring visibility, and so on are all costs.
Budget allocation is simplified using digital recognition technology. You may exercise great control over how your budget is spent and even follow it in real-time.

Conclusion

There are numerous ways to implement employee recognition in the workplace; however, it all starts with company culture. A successful employee recognition program begins with a company culture that values top achievers. This can serve as the cornerstone for future excellent staff engagement, continual employee development, and retention strategies.

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• Revenue Recognition Principle (GAAP) and The New Revised Principle
• Revenue Recognition: How GAAP & ASC 606 Works

References

• BetterUp
• SnackNation
• GreatPlaceToWork