How to Build an Employee Recognition Program

People want to be appreciated. Unfortunately, some 40% of workers feel that employee recognition is not prioritized in their organization. Over 77% expected to be thanked, yet a third of employees say they have not been shown the gratitude they deserve.

When employees do not feel valued, they get demotivated, dissatisfied, and disengaged. And this affects their productivity, which in turn impacts the organization’s bottom line. There is also a huge chance they will resign: two-thirds say they will likely leave their job if they do not feel appreciated.

Employers and executives are just not making employee recognition a priority. Or they are just not doing it right.

Benefits of Employee Recognition 

Showing appreciation to employees is not just giving an occasional pat on the back or highlighting their achievements during their annual performance review. Organizations must institutionalize it. These are some of the benefits of an employee recognition program:

Engagement

Engaged employees work harder, go the extra mile, and feel connected to their company. Sadly, only a third of employees are engaged at work. But that can change. Fifty-eight percent of workers say that employee retention and recognition can increase their engagement levels. Just being recognized by their managers will make employees nearly 60% more engaged at work.

Purpose

Employees want to feel that what they do at work matters. The pandemic has made people evaluate the role of their work in their life. Fifty-six percent want to contribute more to society. And 70% say their work defines their sense of purpose. An employee recognition program aligned to the organization’s mission and values can provide meaning at work.

Productivity

Recognition boosts employee engagement, which then improves productivity. Around 79% of employees say recognition makes them work harder, and 78% say it makes them more productive. And productivity leads to profitability. The best companies are 40% more productive and enjoy 30% to 50% higher profits.

Retention

Remember how the lack of appreciation will make workers leave their jobs? There is an enormous price from high employee turnover – hiring, onboarding, and training new employees cost money. Companies with effective employee recognition programs have 31% lower voluntary turnover.

Business Performance

An employee recognition program benefits not just your employees. Organizations that invest in social recognition reap numerous rewards. They are also 4x more likely to improve stock prices, 2x more likely to improve NPS scores, and 2x more likely to improve individual performances.

Steps to Building an Employee Recognition Program

Eighty percent of organizations have an employee recognition program. The question is: does it work? To ensure your employee recognition is effective, you must follow certain best practices. Whether you are about to start one or thinking of improving it, these are the steps to take to build a successful employee recognition program.

Plan

An employee recognition program should not just be an HR project. It should involve all stakeholders for it to be fully embraced:

• Define clear program objectives. What do you want to accomplish with your employee recognition program? Is it to increase employee relations or employee retention?  
• Align it with your culture. Your recognition program must be closely tied to your company culture so that you are rewarding behaviors consistent with your corporate values.
• Set business outcomes. Employee satisfaction is a good measure of success, but more direct financial goals like lower turnover or higher margins will make it easier to justify your program.
• Get top-level buy-in. You will need the support of your C-suite executives, who will set the tone and allocate the budget for your program. Show them relevant research studies and build your business case with numbers.
• Involve employees. Give your employees a voice by getting their feedback about what rewards they want. Select key people to actively participate in the program’s design, including policies and processes.
• Allocate a sufficient budget. Recognition programs do not have to be expensive. But you do need funding to pay for recognition software, recognition ceremonies, and monetary rewards.

Design

Designing your employee recognition program should answer these key questions:

• What behaviors should be rewarded? Again, recognize efforts and outputs that align with your program and business objectives.
• What rewards should be given? Decide if you will hand out monetary or non-financial rewards or a combination of both.
• How will you give recognition? Is it in the form of verbal praise, a hand-written note, a feature in the company newsletter? Will there be a public awarding ceremony? Or will it be done in private? One-on-one or in front of your team?
• How often should you give recognition? You can set guidelines on the frequency of giving recognitions. It can be daily, during weekly team meetings, every quarter, during key milestones, etc.
• Who should give recognition? Direct managers and supervisors have the most significant impact as staff directly work and report under them. But recognition from colleagues is also valuable. And getting praised by your CEO is a special treat.

Implement

The best-designed recognition program will fail if it is not executed well. Follow these best practices:

• Train your management team. Employees, especially managers participating in your program, should be trained on the program’s goals, benefits, policies, and processes.
• Ensure an effective launch. Make a big splash if you launch your new or improved recognition or incentive program. Get managers prepared and employees excited.
• Communicate it well. Use different channels and formats, from internal emails to town hall meetings. Your program should be highly visible, so there should be constant announcements and reminders, so it is always top of mind.

Measure

Your goals for your recognition program must be measured against numbers to determine if they are being met.

• Define your metrics and KPIs. You can use a measurement system like employee net promoter score (NPS) to measure engagement and morale. It is also easy to calculate and compare employee turnover.
• Use different measurement tools. There are many ways to get data, such as employee surveys, interviews or feedback sessions, and performance management software.
• Get regular feedback. Do not wait until the end of the year to see if your program is working. Track and measure at least every quarter so you can make changes faster.

Improve

Your employee recognition program needs to be improved and updated to ensure it remains relevant and exciting.

• Revise regularly. After collecting feedback and data, improve your program at least once a year.

Find the Right Recognition Platform 

Using a rewards and recognition platform will make it easy to administer your program and allow your employees to choose and claim their incentives conveniently. WorkProud sets the tone for a culture of recognition by providing a system that involves all stakeholders from all levels of an organization. We offer a unique and patented global rewards fulfillment service that is customizable and highly personalized, with rich analytics, data visualization, and reporting capabilities.

Fill out the form below to talk to us about helping you build your employee recognition program.