Employee Recognition Strategies, Best Practices, Impacts, and Types

Work is a privilege. It allows people to live with dignity, offers purpose, and helps individuals grow professionally and personally. However, challenges can arise when the workplace doesn’t meet employee expectations. Low engagement and motivation, high turnover and absenteeism, and insufficient productivity are all examples you may be familiar with. 

Yet there is one thing that can alleviate many of these concerns: employee recognition.

Effective employee recognition and rewards solve the foundational issues that cause these challenges to arise by making work more rewarding, supportive, and engaging for everyone.

Why Recognition Is Important

Being recognized taps into the fundamental human need for validation and appreciation—helping with motivation, wellbeing, job satisfaction, and much more. In fact, employee recognition can increase employee engagement by 4x. Other impacts of employee recognition include:

• 31% reduction in voluntary turnover
• 14% increase in productivity
• 3X greater loyalty from employees
• 56% reduction in employees looking for a new job

Recognition alone isn’t a silver bullet, but when done properly, it can convey frequent, recurring, and specific values to employees that may otherwise feel unseen.

It’s important to note that employee recognition isn't just a one-size-fits-all concept; we’ve moved past limited gift card selection and plaques. Modern employee recognition is a multifaceted approach that caters to a variety of preferences, cultural backgrounds, and work styles. 

From traditional methods to cutting-edge tech-driven solutions, there's a wide array of recognition approaches that can boost productivity, build culture, and even reduce your overall spend on rewards and recognition initiatives.

The Psychological Impact of Recognition

Acknowledging an employee's hard work, skills, and dedication can have a significant positive impact on motivation, well-being, and job satisfaction. Feeling recognized lowers stress levels, increases feelings of safety, security, and happiness, strengthens trust and relationships, and can actually boost productivity, too.

When employees feel valued, supported, and noticed, they are more likely to remain engaged, perform at their best, and contribute to a positive work environment.

Types of Employee Recognition

Employee recognition is the act of noticing employees’ efforts and recognizing them for what they bring to the table. Recognition can be as simple as a handwritten note or as involved as a promotion or raise. Recognition should be foundational for your business—here are some simple ways to make that a reality.

1. Offer Various Recognition Programs and Avenues

A vital part of recognition is recognizing that all of your employees are different—not only does this mean that DEI initiatives are important, it also means employees all have different preferences when it comes to being recognized. According to Deloitte, most employees want recognition that is delivered privately, not shared with others. However, others appreciate social shoutouts and more public praise.

Another consideration is cash. Cash isn’t always the best way to recognize. Many employees want things like more growth opportunities, more responsibility, or more trust.

Try to introduce different ways to show recognition to employees. Here are just some of the program ideas you can implement:

• Peer-to-peer programs
• Manager-to-peer programs
• Social shoutout programs
• Employee development programs
• Employee-of-the-month or wall-of-fame programs
• Care package programs (especially for remote workers)

Reach your employees in the way that means the most to them with varied recognition.

2. Make Recognition Much More Frequent

People spend 40 hours a week doing tasks at work, and they want to know they’re helping the team and the company succeed. In fact, nowadays, employees want constant feedback to know what they’re doing matters.

Constant feedback may sound intimidating, but recognition doesn’t have to be a big resource pit—it only has to be genuine, based on things like attitude or performance, to really mean something to your employees.

The key to remember here is that recognition should be given for both the small stuff and the big stuff. Birthdays, holidays, end-of-quarter accomplishments, etc., should all be recognized—but so should a good idea during brainstorming, a positive attitude, and a willingness to help. Use your varied recognition programs to make gratitude and appreciation more frequent for all.

3. Recognize and Celebrate Milestones

When you think of milestones in the workplace, your first thought is probably employee service awards for work anniversaries. And you’re right, celebrating each year with your employees is a big deal! However, one of the main priorities for many employees is greater work-life balance, so why not contribute to that by recognizing milestones in your employees’ personal lives?

Birthdays are the logical next step; don’t ignore them! Make sure employees get something for their birthdays, whether it’s points on the recognition platform, a favorite snack, or a day of PTO. On top of that, celebrate things like getting married, buying a home, or having a baby. These life events are a big deal to your employees, and if you celebrate with the employees, they’ll appreciate you even more.

4. Promote and Recognize Employee Wellness

Employee levels of stress and burnout are higher than ever before. A great way to combat that trend is through employee wellness programs, including:

• Career wellness (stability, development, upward trajectory)
• Physical wellness (gym membership reimbursement, exercise breaks)
• Mental wellness (mental health resources, stress management programs)
• Financial wellness (financial education classes, investment opportunities)

These types of programs are great at helping employees improve their all-around wellness, which helps them stay focused and happy at work and in life. When you recognize employees who participate in these wellness programs, you encourage these healthy behaviors, as well.

Developed, effective wellness programs aren’t a simple luxury—they improve retention and engagement, and they make your workplace more attractive to potential talent, too.

5. Mix Digital and Physical Recognition

Digital tools are phenomenal ways to reach all of your employees, especially if you have remote, hybrid, or dispersed people. And employee recognition platforms make it easier than ever to manage, automate, and budget digitally.

However, don’t forget about physical expressions of gratitude. A genuine in-person compliment, a handwritten note in the mailbox, or even just a snack can be the most meaningful recognition of all. For example, Awardco uses AwardCodes, physical recognition cards that allow leaders to print and hand out personalized messages and reward points.

4 Employee Reward Strategies

Rewards are an integral part of employee recognition—not that every recognition needs a reward, but when you recognize behavior and give rewards, employees are much more likely to repeat that behavior. Here are some ideas to offer meaningful employee rewards.

1. Personalize Rewards to Maximize Meaningfulness

Everyone has different tastes, personalities, motivations, and goals. So why would you give everyone the exact same reward or gift? While you may assume that a one-size-fits-all approach saves time, cookie-cutter gifts and rewards can actually have the opposite of the desired effect: employees will feel unimportant or uncared for.

Make the rewards you offer mean something for your employees. Give gifts that your people actually want. Only then will the rewards you invest in provide the desired outcome: feelings of gratitude and loyalty in your employees. Talk to your employees to figure out what means the most to them, and customize your rewards to match that.

Pro tip: Learn more about employee gifting preferences—download our Employee Gifting Guide fillable PDF.

Recognition platforms like Awardco make it easy to offer varied gifts and rewards, and they even let you automate the processes so you can save time. The key here is, make sure the rewards you offer are things your employees want.

2. Create Rewarding Incentives

Incentives are great ways to drive behavior, and when you combine incentives with employee recognition and rewards, you can incentivize many different behaviors and reward those who excel. Some examples of incentives you can consider include:

• Wellness incentives. As mentioned above, improving employee wellness should be a priority. Create a way to reward those who participate in your wellness programs, and watch your organization’s overall well-being rise.
• Performance incentives. Incentivize awesome work by rewarding those who do it. Create rewards that reach everyone to foster collaboration, not competition. Customize your incentives for each team or department, such as sales, engineering, or customer service. Make sure to include frontline, warehouse, or production floor employees, too.
• Participation incentives. Need employees to participate in surveys, training, or security compliance? Incentivize people to participate by offering some sweet rewards! They don’t have to be big—a couple points or a small snack would be perfect.

Rewards for incentives can range from physical rewards, gift cards, away-from-work activities (such as hobby classes or event tickets), or even PTO. Find rewards that really motivate people, and make sure that you recognize anyone who makes an effort.

3. Gift More Career Advancement

Professional development is a huge part of why employees stay at a company. 50% of employees want to develop their skills, but they often don’t know where to begin. So instead of rewarding a job well done with physical rewards, give out opportunities to learn and develop.

Employees will love the fact that their employers are invested in their success, and they’ll know that their position is a long-term solution for their needs. This can cut back on turnover and cut down on the skill gaps at your organization.

4. Give the Gift of Team Building

Teamwork, friendships, and communication need to be a focus, especially for remote employees. What better way to build bonds and improve relationships than fun, team building opportunities as rewards?

Team building can be as simple as taking a team out to lunch, or it can be a full night of festivities by hosting a company party or planning team activities, such as an escape room or team cooking class.

The key is, rewards don’t have to only be for one person—offer rewards for teams and then base those rewards around creating fun experiences and helping them get to know each other better.

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Exploring the Evolution of Employee Recognition

While traditional employee recognition strategies still hold value, the workplace's changing dynamics have paved the way for more modern approaches. Traditional methods include annual awards, while modern ones incorporate real-time and continuous recognition that resonates with the fast-paced nature of work today. Striking a balance between these approaches ensures that recognition remains meaningful and relevant.

Structured vs. Unstructured Recognition

Structured recognition programs, such as years of service awards, follow a predetermined pattern. In contrast, unstructured recognition thrives on spontaneous gestures that highlight immediate accomplishments. Both approaches have unique benefits and contribute to a well-rounded recognition strategy.

The Art of Personalized Recognition

Personalized recognition is the secret ingredient that transforms a simple acknowledgment into a powerful motivator. Tailoring recognition to individual preferences and cultural nuances makes employees feel truly valued and understood.

Different Avenues of Recognition

Exploring the vast avenues of recognition, including top-down recognition from leadership, peer-to-peer acknowledgment, performance-based rewards, effort-based recognition, milestone celebrations, and values-based accolades, offers a comprehensive approach to boosting employee morale.

Employee Rewards and Incentives

From tangible rewards like gift cards, personalized gifts, and experiential rewards to intangible rewards like flexible work arrangements and extended breaks, the right mix of rewards and incentives can significantly impact employee motivation and engagement.

The Role of Technology in Modern Recognition

Leveraging digital platforms and technology streamlines the recognition process, making it more accessible and engaging for employees across diverse locations. From e-cards to online recognition platforms, technology enhances the reach and impact of recognition efforts.

The Difference Between Appreciation and Recognition

Appreciation and recognition are intertwined but distinct concepts. While appreciation focuses on valuing employees for who they are, recognition acknowledges their specific contributions and efforts. Balancing both in the workplace is crucial for a holistic employee engagement strategy.

The Global Perspective on Recognition

Different cultures and regions approach recognition in diverse ways. Adapting recognition strategies to cater to a culturally diverse workforce enhances its impact and resonates more deeply with employees.

The Future of Employee Recognition

In a world transformed by remote work and evolving workplace dynamics, employee recognition is evolving as well. The integration of technology, gamification, and remote recognition practices is set to shape the future of recognition efforts for years to come. 

Now is the time to address your rewards and recognition efforts as a part of your holistic total rewards strategy. Considering the benefits that rewards and recognition provide in the workplace, even with minimal financial investment, you can’t afford to ignore this facet of total rewards as your organization continues forward into the future.