Businesses depend on their employees. Whether it’s creating culture or dealing with adversity, employees drive it all. That’s why it is so important to make sure your employees feel valued and recognised for their work and contributions.
But what is employee recognition? What are the different types of employee recognition that can help you build a workplace where employees thrive? Maybe most importantly, how can you build an effective recognition program?
In this guide, we’ll explore all that and more as you create or grow your employee recognition programs in 2023.
Employee recognition is the act of acknowledging and rewarding an employee for their contribution, effort, or innovation. It doesn’t just have to come from leaders of the company either. Some of the best recognition can come from peers, partners, or even customers.
Employee recognition is typically given as verbal or written praise, posts on internal or external social media, or through tangible rewards like bonuses, points that can be redeemed for gifts or gift cards, awards, or trophies.
Organisations use employee recognition to:
The two concepts are closely related but different in one key way—the degree of formality.
While employee appreciation is important and can be a good starting point (especially on Employee Appreciation Day), employee recognition helps an organisation create sustainable change over the long-term so that employees can perform their best.
With a well-structured employee recognition program such as Culture Cloud from O.C. Tanner, organisations improve their ability to recognise the achievements of people who work there. An employee recognition program attaches goals that align with recognising the actions that are important for success.
As entrepreneur Richard Branson once said, “Take care of your employees and they will take care of your business.” Our research backs him up. Organisations with strong employee recognition programs report an increase in great work by 1,181%, high engagement by 784%, and thriving culture by 648%.
Employee recognition is an essential part of any organisation’s talent strategy. That’s for good reason. When employees are asked, “what is the most important thing your company could do to cause you to produce great work,” their most common response is recognition.
When employees feel valued and appreciated, they not only become more engaged and less likely to leave, but they are also motivated to perform at their very best. For organisations, that means better performance in customer-facing roles, fewer safety incidents, more innovation and invention, and overall higher performance across all aspects of work.
We’ve covered some of the benefits of an employee recognition program. Now let’s go into more detail.
Recognition is one of the most important places to start for organisations that want to improve employee engagement. That’s because it works. Creating a culture of consistent recognition and appreciation—an environment where employees feel valued and appreciated—is key to improving employee engagement.
Employee recognition can lead to marked improvements in productivity. When employees feel valued and that their contributions make a difference, they are more likely to go above and beyond.
The most productive organisations don’t have enormous turnover. Employees who feel valued and appreciated at work are far less likely to leave. So that’s why the best organisations rely on recognition to sustainably reduce turnover rates.
Dissatisfied and disengaged employees won’t provide a great customer experience. When organisations appreciate and recognise workers, those employees are more likely to go the extra mile for customers. These interactions improve the customer experience, leading to improved customer satisfaction and loyalty.
Everyone is different. That’s why the best employee recognition is tailored to each individual.
Some of your employees might welcome a quiet note and thank you more than an announcement at a big meeting. Others prefer more public shows of recognition. Here are some options for you to provide the right kind of recognition:
Words are the simplest way to recognise and appreciate people. That can be as simple as saying “thank you.” But the more specific the praise is, the more likely it will be to make a difference. Explain exactly what you are recognising them for and why.
While some employees like verbal praise, others prefer something written. These notes can be shared privately or publicly—and personalised notes work best.
Many employees love tangible rewards, especially when coupled with written or verbal praise. These can include monetary rewards or points that can be redeemed for gifts or experiences. The more you connect the reward to the work, the more impactful it will be.
Some people love the spotlight. While not all organisations hold formal award ceremonies, that doesn’t mean there aren’t ways to share employee recognition widely. Try a public announcement during a meeting or a post on social media.
You’ll find many examples of great recognition programs that you may want to try. Most organisations use a combination of recognition, knowing that the goals they are hoping to achieve can’t be driven by a single type of recognition.
For example, Capital One worked with O.C. Tanner to synthesise data, technology, and humanity in their company’s recognition efforts. This resulted in their ONEderful recognition program, through which 75% of associates in 145 different business units have been recognised. According to feedback on an associate survey, recognition at Capital One “motivates people and puts the organisation at the same level as some of the other well-known technology companies that reward associates.”
Here are the most common types of employee recognition organisations integrate into their recognition programs today:
Peer recognition is often the most effective way to show appreciation. That’s because it comes from colleagues who have first-hand experience with the impact that the honouree has made. Peer-to-peer recognition also helps organisations create a consistent and sustainable culture of recognition.
Leader-to-employee recognition is also common. And that’s for a good reason. Leaders who recognise employees see better performance and more longevity. On the other hand, when employees leave an organisation, they often point to a lack of recognition as one of the motivations driving them away.
Achievement awards can be given at the end of a project or at a critical milestone as recognition for contributions that go into achieving those goals. Leaders can give them to everyone who helped on a project team, especially as part of a broader organisational initiative.
Service awards for significant work anniversaries honour an employee’s achievements over time, serving as recognitions for loyalty, longevity, and sustained performance.
Performance-based recognition is often focused on sales performance, but in reality, it can be given to anyone who demonstrates exceptional performance or overcomes adversity. These rewards often involve tangible rewards like bonuses or gifts.
It can be challenging to measure the ROI of employee recognition, but it’s not impossible. For example, Navy Federal Credit Union measures employee experience every 18 months through an enterprise engagement survey, as well as more frequently with pulse surveys.
Here are some ways to measure the ROI of employee recognition:
A culture of recognition, supported by effective recognition program, should generate hundreds, if not thousands, of positive employee experiences every day. Organisations can measure the impact on employee experience by tracking how many people are being recognised, participation trends, program satisfaction, and inclusivity.
While experience is focused on the individual employee, culture is focused on the organisation as a whole. Connecting an individual to the broader purpose and success of an organisation is one measurable way that recognition can make a difference for the organisation. Six elements that organisations should track are:
While some people may look at employee recognition simply as a cost, that would be a mistake. A well-designed recognition program can affect many business outcomes. For example, absenteeism and turnover are often tied to lack of recognition. Recognition can also effect things like engagement, satisfaction, productivity, and development growth.
When it’s time to build an effective employee recognition program, prepare for some careful planning and execution. Here are some key steps to get started:
What do you want your program to recognise? The first step? Align your organisation’s purpose and values with employee accomplishments.
After that, you can think about how everyone in your organisation can contribute to that and get recognised. It’s important to be as clear as possible about this and to be inclusive of employees across demographic categories, locations, levels, and so on.
You figured out the why. Now figure out the how. You can take several approaches. One is to build recognition into the tools employees already use or to offer an experience unconstrained by those tools.
It’s very important to find a recognition program that isn’t one-size-fits-all. Every employee has different preferences—not everyone wants a gift card.
It’s easy to overlook how important it is to communicate about a program and training people how to take advantage of it. Employees should know exactly how the program works and be excited to be part of it.
Give them tangible and practical advice on how to give awards. Share support and reminders. And don’t forget to train your leaders. Leaders need to model the recognition practices they want to see from every employee.
An employee recognition program can’t succeed without executive support. How do you keep leaders engaged? By highlighting the impact of employee recognition programs on internal culture and employee experience, as well as critical business metrics like retention, customer satisfaction, product quality, and sales effectiveness.
You want an employee recognition partner familiar with companies like yours and the challenges you might face. A partner should provide best practices in program design, awards, communication, training, and measurement, as well as be able to act as a broader consultant if needed.
Because it’s much easier to start a recognition program by choosing an industry-leading solution, look for top-tier partners that have maintained long-term relationships with their clients.
Successful organisations need employee recognition programs with the features and capabilities that can truly impact their employees' lives at work.
The right program can improve employee engagement, increase productivity, and reduce turnover—evergreen issues that any organisation may face.
By choosing the right partner to build an effective employee recognition solution, organisations create a culture of recognition that has a meaningful impact on employee experience and business results.
If you’d like to talk to the employee recognition experts at O.C. Tanner about how we can help craft a solution for you, please reach out to us.
Your browser is out of date and may not be able to properly display our website. A list of modern browsers is below; simply click an icon to go to the browser's download page.