How to create an employee recognition program

Last updated:
June 16, 2021
July 19, 2022
min read
Brendan McConnell
employee recognition program
Table of contents

It's common knowledge that higher engagement and better morale amongst your employees leads to better productivity and results. That makes sense. If your employees are happy and committed to the mission, they're more likely to put in the extra effort needed to achieve great results.

But how do you ensure that employees stay motivated and engaged?

One way is to use employee recognition programs.

Employee recognition has been shown to increase engagement by as much as 60%, and reduce voluntary turnover by 31%. In other words, employees who receive recognition for their hard work and accomplishments are more committed to your organization's success and have a lower chance of leaving. Therefore, your company must have a robust employee recognition program in place to reward employees for a job well done.

This article will explore the concept and benefits of employee recognition and explain how you can create a robust program of your own.

Let's dive in!

What is employee recognition?

Employee recognition is the act of acknowledging and showing appreciation for an employee's contributions to your organization. It's as simple as that.

If an employee does something positive, you should show that you appreciate their effort and the outcome. There are, of course, lots of different ways to show recognition. It might be a simple kudos or pat on the back or something more substantial like a monetary reward.

The specifics of who gives recognition, how it's given, and what rewards are offered, make up an employee recognition program's framework.

Let's focus on the first point: who gives recognition. This is a key question that you should ask when creating an employee recognition program.

The two most common answers to that question are either a top-down approach or a peer-to-peer approach.

Top-down employee recognition

In a top-down employee recognition program, the supervisor, manager, or leadership team take on the responsibility of witnessing and showing appreciation for an employee's contributions. This is often done in the form of quarterly or yearly employee evaluations that look back on projects or instances where the employee contributed positively to the organization.

Top-down employee recognition is often tracked and delivered in a structured manner. The manager is responsible for identifying positive contributions, noting them, and praising the employee in a formal review. This process is often tied to promotions, raises, professional development, or an increase in responsibilities.

While top-down employee recognition programs have long been the norm, many companies are beginning to switch to a more fluid model that encourages all employees to contribute.

Peer-to-peer employee recognition

Peer-to-peer or 360-degree employee recognition is a much more decentralized approach that encourages all co-workers to acknowledge positive achievements and contributions.

In these employee recognition programs, managers and employees alike are empowered to recognize and reward contributions from anyone else within the organization.

This model has two benefits that traditional employee recognition doesn't have:

  1. It allows colleagues to show appreciation for one another, rather than recognition being controlled by management.
  2. It allows employees to give positive feedback to their managers.

Peer-to-peer recognition programs give everyone a voice in the organization, which has a variety of positive benefits on employee morale and engagement.

Why is employee recognition important?

As mentioned previously, employee recognition has been shown to positively impact employee engagement and effectively reduces turnover as a result.

Here are some other benefits of employee recognition programs:

  • They give you a competitive edge. By actively nurturing a culture of recognition that encourages positive results and strong performance, you're ensuring that all employees are giving it their all on a daily basis. This means that your output will be stronger, helping you beat the competition in your market segment.
  • They help build a strong employer brand. Happy employees are more likely to speak positively about your company as a place to work. The more this happens, the stronger your reputation will become. This, in turn, makes it easier to attract and hire top talent.
  • They increase productivity and performance. Employees who receive positive feedback and rewards for strong performance are much more likely to repeat that behavior in the future. Likewise, employees who see their colleagues receive praise for hard work are also more likely to follow suit.
  • They build purpose and loyalty around a common mission. By encouraging the behaviors that lead to the company's desired outcomes, you make it clear what the mission is for your organization. Having a clear mission creates a deeper sense of loyalty amongst your employees and motivates them to meet their goals.
  • They build strong teams and cultures. Decentralizing employee recognition encourages employees to show appreciation for each other's contributions. The more this is done, the stronger the connections become between team members. Strong teams, and open communication, are two key contributors to positive and effective company cultures.
  • They motivate employees to do their best work. Lastly, positive recognition shows employees that hard work and strong performance are acknowledged and rewarded. Failure to acknowledge your employees' effort is a great way to ensure that they stop going the extra mile and become disengaged from the outcomes. Employee recognition shows appreciation when employees do their best work and gives them a reason beyond a paycheck to keep doing it.

Now that we've talked about what employee recognition is, and why it's a good idea to encourage it within your organization, let's explore how to build your own program.

How to build an employee recognition program

Like with any new initiative in a company, building an employee recognition program requires collaboration, resources, stakeholder buy-in, and an organization-wide commitment to success.

Below is a general framework that you can follow when creating an employee recognition program from scratch at your company.

  • Make a case for a recognition program. Present the concept and the benefits of an employee recognition program to your executive team. Use tangible metrics and statistics to illustrate why this is a worthwhile endeavor and why it should allocate time and resources. Get buy-in from leadership, and secure the resources you'll need to be successful. Also, be sure to explain how you'll communicate progress and success to key stakeholders.
  • Build a team of champions and project leads. Once you have buy-in and resources, it's now time to assemble your employee recognition program team. Find people within your organization to act as champions for your fledgling program. Get them to tout the benefits to their circles of influence within the organization to generate excitement. Establish who your project leads, and the execution team will be, and assign roles.
  • Define your program objectives and criteria. Clearly outline key variables and instructions that you'll include in your recognition program. What types of behavior or achievements will you encourage? How should those behaviours be rewarded? Who should recognition come from? How will you communicate recognition once it's received? Be as thorough as possible to ensure that you cover any employee recognition ideas and outcomes that might arise.
  • Choose what rewards to give and how to give them. Will employees be assigned tokens or points that they can give to their colleagues? Will rewards be discretionary at the manager's approval? How will those rewards be given? How frequently? The answer to these questions will help guide what employee recognition software you might use, and how cost-intensive your program will be. Be sure to explore your options.
  • Get input from employees. Once you've developed your framework, present the concept as a pilot program to your employees. See how well the recognition process performs, and what the adoption rate is. Ask employees to complete a survey about what they like and don't like, and incrementally adapt the program until you've hit the right balance.
  • Monitor program engagement and ripple effect. Continuously monitor what percentage of your organization is participating in the employee recognition program. Analyze how, when, and how frequently it's being used. If you're noticing a spike in early engagement, followed by a downturn, then you might want to consider an internal communications program to encourage sustained adoption. Additionally, see if you can identify any upticks in performance or engagement metrics - if you track those - that occur around the time that you launched your program.
  • Revisit and revise as needed. Continue to monitor your employee recognition program KPIs, and send regular surveys or pulse checks to employees to gauge their opinions. Adapt your program as needed to ensure its effectiveness.

Now that we've walked you through the steps to building an employee recognition program, we'd like to offer some tips on how to get the most out of your efforts.

Tips for a winning employee recognition program

The best advice we can give to ensure the success of your employee recognition ideas is not to build your program in a vacuum.

The best programs are those that involve as many people within the organization as possible. Recognition is, after all, the result of workplace culture. And culture is a collective achievement, not an individual one. Keep the lines of communication open during planning and execution, and actively encourage feedback at all times.

With that in mind, here are some tips for how you can create a winning employee recognition program:

  • Actively encourage everyone in your organization to give recognition. Make it a 360-degree recognition program, rather than a top-down one.
  • Use automation to deliver rewards. Choose how you give rewards, and automate as much of the process as possible. For example, you could pick an employee recognition software that allows employees to give and accrue points or tokens. These points can then be renewed for a reward of the employee's choosing. By using one of the many established recognition platforms on the market, you can fully automate this process, taking the burden off of your team and management.
  • Set a recognition budget. You will likely be given a finite amount of money and resources to use for your recognition program. Make sure that you set a realistic budget, and only offer employee recognition rewards that won't break the bank. Your program should be sustainable and scalable.
  • Actively encourage recognition. Create an internal communications strategy that reminds employees about the program and encourages them to participate. Keeping recognition top of mind is important to complete adoption within your organization, especially at the start.
  • Provide a snapshot of "top recognitions" each month. Build a monthly round-up on top contributors into your communication plan. Public recognition and encouragement is a strong motivating factor for employees and will create an environment of healthy competition for a top spot.
  • Make the program easy to adopt. Remove as many barriers and complexities as possible for employees. The program and platform you use should be simple to navigate and intuitive to use.
  • Get input on employee recognition ideas. Encourage employees to share ideas and suggestions for employee recognition rewards. Incorporate those ideas where possible.
  • Create a Top Tier recognition reward for your highest-performing employees. Designate one major reward, such as a trip or extended vacation to the best performer each year. This type of reward provides a goal that everyone in your organization can strive for, and gives credit to employees who really go the extra mile.
  • Make sure the employee recognition program aligns with your culture. Don't try to force a process or program into your organization if it doesn't fit your established culture. Tailor your program and employee recognition ideas to what your employees want and are comfortable with.
  • Don't be afraid to get creative. Creative employee recognition ideas are often more memorable than a gift card. Include some unique or off-the-wall recognition rewards in your program that align with your culture.

No matter how senior or junior an employee is, everyone likes being given credit and recognition when it's due.

Strong employee recognition programs help to create an environment where good work is acknowledged and encouraged, leading to stronger engagement and morale company-wide.

Further reading: Fun employee recognition ideas

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