Your Comprehensive Guide to Employee Rewards and Recognition

Employee rewards and recognition is the secret sauce in your recipe for success—rewards and recognition influence culture, engagement, motivation, turnover, and productivity because employees will always perform better when they feel valued and supported.

Employee engagement levels are dropping for the first time in a decade, burnout is rising, and employees expect more from their employers and workplaces. (According to one study, employees think company culture is 10X more important than their salaries!)

Times are changing, and the combination of meaningful rewards and impactful recognition is your key to staying relevant in 2025 and beyond. With this guide, you’ll learn everything you need to get buy-in, effectively implement, and steadily increase your company's employee recognition and improve your reward offerings.

The Importance of Rewards and Recognition in the Workplace

Employees in today’s workforce aren’t satisfied with a decent salary for a stressful, uncaring job. No, people want to work in a place that truly supports them, both professionally and personally, and supports their well-being and work-life balance. Recognition and rewards can help build a culture that meets those expectations.

Check out these employee rewards and recognition stats:

• 94% of employees who feel highly appreciated love their workplace.
• Employee recognition lowers turnover by 31%.
• Employee recognition increases engagement and productivity by 14%. 
• Incentives and rewards lead to a 22% boost in productivity.
• Employees are 3X more likely to be loyal to an organization with a culture of recognition,
• High performing companies are 10X more likely to put a central focus on recognition.
• Recognition decreases the chance of employee burnout by 48%.

All these benefits mean that creating a culture of frequent and genuine recognition in the workplace can completely transform a company’s productivity, retention, and performance. Get an analysis of the exact ROI you can expect with Awardco’s recognition ROI calculator.

Here’s the problem: only 27% of employees feel recognized, and 50% of people feel undervalued at work. Knowing the benefits of rewards and recognition isn’t enough—you have to build programs that offer them in an effective way.

How to Build a Culture of Recognition?

When implementing or improving employee recognition programs, you must have some foundational practices in place that make it easy and rewarding to recognize. These foundational concepts are what makes rewards and recognition programs work:

• Make recognition easy to do. Executives, managers, and employees all have a lot on their plates, so when recognition is complicated or cumbersome, most won’t bother. However, with an innovative recognition platform, people can quickly give shoutouts on the spot. And don’t forget to encourage in-person compliments and public praise!
• Make recognition specific, timely, and genuine. Whenever you recognize someone, it should be for a specific reason, it shouldn’t be weeks after the fact, and it should be heartfelt. Only with these key features will recognition give you the benefits you’re looking for.
• Tie recognition into company values. Value-drive recognition is a sure-fire way to build a healthy work culture. When recognition reinforces value-driven behaviors, your employees will come to understand your values and put them into practice.
• Utilize monetary and non-monetary recognition. Monetary recognition is a great way to reward employees for excellent work or celebrate special events or holidays. However, non-monetary recognition is perfect for smaller occasions or to shoutout employees for hard work.

When recognition is easy, meaningful, and value-driven, your culture of recognition will reach everyone effectively.

Case Study: Seven Bridges

Seven Bridges used the unlimited customization capabilities on Awardco to build over 15 recognition programs, each with different goals. Some of these include:

• Peer-to-peer recognition
• Manager-to-direct report recognition
• Employee of the Month nominations
• “Most likely to…” nominations
• Employee incentives to reward specific behaviors, such as professional development, wellness, and recognition

These fun and effective employee recognition programs led to a 95% login rate in just three months after implementation. They’ve built an amazing culture through recognition and rewards.

Employee Rewards and Recognition Best Practices

Now that you know why and how to implement recognition, here are some strategies to make it easier to get started.

Offer Various Recognition Programs

Every employee is different, which means everyone has different preferences for recognition. In fact, many employees would rather have recognition delivered privately, not publicly. But that doesn’t mean social shoutouts or public praise is bad.

Another tip: cash is great, but it isn’t your only reward option. Many employees respond better to rewards like development opportunities, greater trust, or more responsibility.

Survey and talk to your employees to figure out what types of recognition and rewards mean the most to them. After all, creating multiple different recognition programs and reward networks is a piece of cake with Awardco.

Make Rewards & Recognition Much More Frequent

Employees spend eight hours every day, 40 hours a week, at work. Being recognized once a month or even once a quarter simply is not enough. 40% of employees are recognized only a couple times each year or less, and 82% of employees don’t feel recognized enough at work.

All this goes to show that recognition needs to be given out like candy—but not to the point of sacrificing genuinity! The main thing to remember is that recognition should be given out for the big things (birthdays, service anniversaries, sales quotas, etc.) and the small things (having a good attitude, helping on a project, being on time, etc.).

Recognize and Celebrate Milestones

Besides work accomplishments, employee recognition should encompass professional and personal milestones. Some examples of fitting milestones to celebrate include:

• Employee birthdays
• Work anniversaries
• Promotions
• Getting married
• Having a baby
• Graduation
• Buying a home

These work and life events are a huge deal for your employees, so when you recognize these milestones, you show that the company cares about its people, both in and out of work.

Promote and Recognize Employee Wellness

Burnout and stress are the new workplace pandemic, with 67% of employees saying stress and burnout have gotten worse since 2020. 83% of Americans regularly deal with work-related stress, too.

Employee recognition doesn’t only celebrate those who prioritize wellness—it can also incentivize participation in wellness programs and initiatives. Create programs centered around walking a certain amount of steps, eating certain healthy foods, or taking care of their mental health. Then, incentivize employees to participate and recognize those who do their best.

Mix Digital and Physical Recognition

Digital recognition is convenient, fast, and easy, but it may not reach everyone. Using physical recognition, such as notes of gratitude, gift cards, or an in-person compliment balances your recognition programs.

15 Creative Employee Recognition Ideas

Here are some examples of employee recognition programs to make your efforts more effective:

1. Spot Recognition

Spot recognition is just what it sounds like—on-the-spot recognition. Whenever anyone does something admirable, this type of program allows their manager or their peers to immediately send them a message of gratitude, congratulations, or praise.

Spot recognition is great because it’s immediate and specific. Plus, this program can be both monetary and non-monetary—simply decide whether or not managers and employees have budgets to give out with their spot recognition.

2. Birthday and Holiday Celebrations

Every employee has a birthday, and everyone celebrates holidays throughout the year. A birthday/holiday recognition program is great because you can give personalized gifts, cards, or point amounts to every employee throughout the year.

For holidays, one of your best options is Employee Appreciation Day. This is your best opportunity to show gratitude to everyone in the company.

3. Employee Milestone Recognition

Recognizing effort and work is important, but every single employee has a life outside of work. When you recognize and celebrate employees’ personal milestones, you show that you care about them as people.

Some examples of milestone celebrations include giving employees some points when they graduate, when they get married, when they have a child, or when they move. Simply noticing when employees have important life events will go a long way.

4. Employee Wellness Programs

Investing in employee wellness is another great way to show that you care about them and their well-being. Wellness programs can be anything from gym membership reimbursement and a small stipend for groceries to team fitness challenges and healthy office perks.

One great way to push wellness initiatives is by incentivizing healthy behaviors—and Awardco helps you make incentives easy.

(How do you effectively support mental health in the workplace?)

5. Service Anniversaries

Another milestone that every employee enjoys is a service anniversary. Never, ever let a year go by without some form of recognition! Even if your big awards are every five years, make sure to offer some form of reward for every year an employee stays with the company.

This consistent recognition shows that you're always grateful for all the work each employee puts in.

(Extra tip: Use Awardco’s Lifestyle Spending Account feature to spread your service award budget throughout the year instead of leaving it for a single occasion. We’ve found that regular recognition is much more effective than a yearly reward.

6. Public and Private Shoutouts

Some employees really like being brought up in front of the company. Others, not so much. For this, consider creating both public and private avenues for recognition. For those who like the spotlight, recognize them in front of the company or on social media. For those who like anonymity, a private compliment or a handwritten card are great ideas.

7. Free Food

Providing free meals and treats to your employees is a great way to show them that you appreciate their efforts and are cognizant of their finances. This is also a great recognition idea for remote employees—simply have the food delivered to their house.

8. Workspace Upgrades

For those who work from home for any amount of time, helping them upgrade their workspace is a great way to recognize them. Give them office equipment, or better yet, give them an allowance to buy their own. 

Ergonomic gear, noise-canceling headphones, a webcam, or even a new office chair are all great ways to improve an employee’s work experience.

9. Professional Development Opportunities

Recognizing that employees want to learn and improve is vital to your workplace. In fact, 71% of employees say that training and development increases their job satisfaction. Offer training courses, shadowing opportunities, tuition reimbursement, online classes, raises, and promotions.

10. Above-and-Beyond Program

Recognition can drive healthy employee behaviors, so recognizing those employees who go above and beyond is important. A program that rewards those who really excel is a great way to recognize effort, especially when the reward is sizable.

11. Philanthropic Support

Employees want their company to care about the issues that they care about. Recognize that employees have movements that they’re passionate about, and support them by matching charitable contributions, giving them time off to volunteer, or planning a company-wide service project.

12. Breaks and PTO

Employee mental health needs to be a focus for companies, especially because burnout levels are so high. Recognize employees by giving them extended breaks throughout the day, providing extra PTO, or even setting up a sabbatical program for senior employees.

(Learn how to help employees with burnout)

13. Rotating Trophy

A goofy trophy, such as a handmade cardboard one or a stuffed animal of some kind, is the perfect reward that employees can share. For example, pass the trophy around each week to the employee who did the best on that week’s challenge.

This is a creative way to recognize effort and push employees to do just a little better each week.

14. Off-site Events

Host both company-wide and team off-site events to give employees a chance to get out of the office and get to know their coworkers better. Allow families to attend larger events. These parties are a great way to show how much you value employees.

15. LinkedIn Recommendation

Leaders can recommend their employees on LinkedIn, which can be a huge boost to an employee’s social profile. That sort of public demonstration of gratitude and confidence can also make employees feel great.

The sky's the limit for your recognition programs. Create custom programs that excite and involve your employees, and they’ll respond by building a culture of engagement.

How Technology Amplifies Rewards and Recognition

You may be wondering why you need a software platform to empower your recognition and rewards efforts. There are a few benefits to keep in mind:

• Make recognition simpler and more streamlined for everyone to participate in
• Foster engagement and interaction with social features
• Support remote and hybrid employees
• Manage and track budgets, reports, engagement, and more in a single platform
• Self-service rewards to take fulfillment and tracking off your shoulders

Awardco has multiple unique features to make rewards and recognition easier for executive teams to support, HR teams to implement, and employees to participate in, including:

• Lifestyle Spending Accounts to empower employee wellness
• External Recognition to allow customers, patients, and third parties to recognize your employees
• AwardCodes to reach deskless and frontline employees
• Reward options that offer millions of choices for employees all over the world
• Automation to simplify HR tasks and save time

Employee Rewards Best Practices

Recognition, as important as it is, is only half of the solution. Employee rewards need to be fitting, personalized, and meaningful for each and every employee. But how do you accomplish that, especially when every employee probably wants something different?

There’s one answer that can solve this conundrum: giving employees the power to choose. That’s probably why gift cards are so popular, because it gives employees the freedom to spend the money on what they want. (However, Amazon is even better than gift cards.) Here are some other strategies for offering stellar rewards:

• Make them personalized. Never, ever give cookie-cutter gifts because most people will be disappointed. Not everyone wants a cooler or a pair of Converse. Talk to your employees to figure out what they’re interested in, then sculpt your reward options around them.
• Gift career advancement. Not every achievement needs to be rewarded with cash or a gift card. In fact, promotions, raises, training opportunities, and new responsibilities are fantastic rewards for those employees who are motivated to improve themselves.
• Give the gift of team building. With remote and hybrid work getting more and more popular, rewards shouldn’t always be specific to one person. Instead, reward entire teams with the opportunity to get out of the office and have fun together.

Rewards need to be rewarding, or else they do more harm than good. But with effective recognition and fitting rewards, employees will love the culture you create.

Start Recognizing and Rewarding Your Employees Today

Employee recognition and rewards are the solution you need for an ailing culture, which is a common problem in today’s work environment. Awardco can help you create customized programs, curate personalized reward networks, and implement an easy-to-use solution that reaches all of your employees. Schedule a demo today!