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Employee Rewards and Recognition Programs: What, Why, and How

Learn the ins and outs of motivating and retaining employees with rewards and recognition programs.

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If your employees are lackluster and out of steam, they may not be receiving the appreciation they deserve. Employee rewards and recognition programs can turn the situation around, boosting morale, productivity, and loyalty among your workforce. 

But what exactly do these programs look like, why are they important, and how can you implement them? This guide will answer these questions and provide best practices for creating an effective rewards and recognition program in your workplace.

What is a rewards and recognition program?

An employee rewards and recognition program is a strategic initiative that organizations use to acknowledge and appreciate the efforts of their employees. It involves offering a mix of praise and tangible incentives to employees for their hard work, achievements, and contributions towards the company's goals.  

Example: Benepass hosts a Beneperson of the Quarter recognition program that enables peers to nominate each other for going the extra mile. Recognition recipients receive a monetary top-up to their lifestyle spending account, which they can spend as they wish. 

Rewards vs. recognition

People often get tripped up using the correct terminology when discussing rewards and recognition. Each term has its own meaning and purpose, and it’s important to understand the difference between the two when creating your program. 

Recognition

Recognition refers to non-monetary gestures that acknowledge and praise an individual’s contributions or efforts.

Recognition typically falls into two categories: 

  • Private recognition: A manager might send a quick email, write a personalized thank you message, or express gratitude to their direct report in a 1:1 meeting. 
  • Public recognition: Managers or peers could praise their colleagues in an open forum, such as during a team meeting or town hall. Alternatively, they could use social media to highlight an employee’s extraordinary contributions to the organization. Publishing online ensures the company’s wider network, including customers and business partners, read the praise. 

So, which is the right approach—public or private recognition? It comes down to the individual. A study of social engagement and employee recognition by Nayak et al. looked at how workers prefer to receive recognition. 8 in 10 employees liked public praise, while 2 in 10 opted for private or semi-private recognition. In detail: 

  • 2% of employees prefer private recognition within the team 
  • 8% prefer private recognition within their division 
  • 10% prefer semi-private recognition delivered to a wider audience within the organization 
  • 15% crave recognition within their global team 
  • 65% want a mix of recognition in front of the global team and public praise on social media 

The research also detailed employees’ preferred recognition mode: 

  • 3% of employees prefer face-to-face praise
  • 4% want to read gratitude in a letter or email 
  • 10% want to be recognized at a work event
  • 20% enjoy experiencing recognition on an organization’s rewards and recognition platform 
  • 63% want a mix of the company's R&R platform and a shoutout on social media

Rewards

Rewards are the tangible incentives employees receive for their performance or achievements, and they go hand-in-hand with recognition. When managers and peers give messages of praise, they add a reward as a token of appreciation. Rewards can take various forms, such as: 

  • Cash bonuses
  • Gift cards or vouchers
  • Extra paid time off or vacation days
  • Promotions or raises
  • Experiential rewards like trips or tickets to events
  • Company swag
  • Charity donations 
  • Items from a product catalog 

Why implement a rewards and recognition program?

When business is busy and margins are tight, it can take time and money to invest in a fully fledged rewards and recognition program. All too often, R&R gets pushed down your priority list. But there are some compelling reasons to commit to this people strategy for the good of your employees and your overall business: 

Engaged employees 

Only 23% of the world’s employees are thriving and engaged. According to Gallup’s State of the Global Workplace report, 59% are quiet quitting, meaning they’re disengaged. Worse, 18% who are actively disengaged are loud quitting. 

Although these figures aren’t encouraging, a rewards and recognition program can be a game-changer for employee morale. A survey by Quantum Workplace into employee engagement trends found that when employees believe their managers recognize their work, they’re 2.7x more likely to be highly engaged

Boosts retention

Intuitively, highly engaged employees are more likely to remain loyal to your organization. Nayak’s study on social recognition found that “the 2nd biggest reason for a high performer or high-potential employees to quit their job is lack of praise and recognition.” 

Similarly, a Gallup and Workhuman report found that workers are 56% less likely to seek new work if their employers commit to building a culture of recognition. The result? Organizations could save $16 million annually. 

Positive workplace culture 

In an ideal world, your organizational culture would speak for itself. When employees love their jobs and feel a sense of pride in the company they work for, it’s easier to keep staff motivated. A well-executed rewards and recognition program can shape this positive workplace culture by reinforcing your organization’s values and promoting peer collaboration. 

Improved productivity

When your team members feel appreciated, they’re bound to work harder. An O.C. Tanner report examining employee recognition programs found that 37% of workers believe acknowledgment would lead them to produce better work more often

What does this improved productivity mean for your company? 

  • Increased collaboration 
  • Greater output 
  • Higher quality of work

Friendly competition 

Your rewards and recognition programs can encourage friendly workplace competition by using incentives like challenges and gamification. 

Example: Recognizing the top salesperson of the month or rewarding employees for closing a certain number of deals can motivate individuals to strive for success. 

At the same time, healthy competition can foster team spirit and improve overall performance. As a result, your company can achieve its goals more effectively and efficiently. 

8 best practices for achieving employee recognition program success

While some organizations may quickly see the benefits of implementing a rewards and recognition program, many fail to create one that truly makes an impact. Follow these best practices to avoid common pitfalls and ensure your program is successful: 

1. Obtain employee input 

Involve your employees with your recognition program right from the get-go. Use employee pulse surveys, focus groups, 1:1 meetings, and exit interview data to understand what your workers want. 

Example 1: If you notice that exiting employees mention their manager never took the time to say thank you, that’s a key sign to commit to employee recognition. 

Example 2: If your pulse survey data suggests that employees receive praise too late, then encourage managers and peers to dish out recognition before the ship has sailed. 

2. Set clear achievement criteria

Ensure that everyone knows how recognition works in your organization, including: 

  • What employees need to do to receive praise 
  • When recognition-givers should deliver praise 
  • Which rewards are available
  • How your rewards system works

Without clear guidelines, employees may not understand how to earn recognition, leading to confusion and potentially causing frustration. This can ultimately undermine the effectiveness of your program.

3. Encourage peer-to-peer recognition 

Part of setting up your achievement criteria is determining who can give recognition to whom. While top-down recognition from manager to employee is a traditional model, there are benefits when team members at all levels exchange praise with each other. Specifically, a Bonusly report found that 65% of employees would remain working for an unappreciative boss so long as they had the backing of appreciative peers. 

4. Foster inclusivity

On this note, ensure your recognition program includes all employees, regardless of their role, department, or seniority. Every employee, from frontline workers and maintenance staff to C-suite executives, should have an equal chance to earn recognition, as it can improve overall engagement and boost morale within your organization. 

When considering who to include in your recognition program, consider ways to include your mix of on-site, hybrid, and remote workers. For example, you could use virtual tools to facilitate peer-to-peer recognition or implement a system that allows remote workers to give and receive praise. 

5. Offer meaningful and personalized rewards 

Let’s face it: There are only so many company-branded water bottles and baseball caps a person wants or needs. To ensure your employees are interested in the rewards, tailor them to individual interests and preferences rather than just giving out generic gifts. 

To deliver rewards that are truly meaningful, circle back to your employee feedback to learn what your workers crave. This might include: 

  • Career development opportunities
  • Financial incentives such as bonuses or pay raises
  • Opportunities for flexible work arrangements
  • High-quality office equipment for home office setups
  • Memberships or subscriptions (e.g., gym memberships, software subscriptions)
  • Company-organized events or trips for high-performing teams
  • Custom rewards selected by the recipient 

Remember: It’s not just about the monetary value of the reward but also its emotional and motivational impact on your team.

6. Timely recognition

Wondering how regularly to recognize employees? Nayak’s study on employee recognition reveals that employees want to be acknowledged and rewarded promptly after their achievements or contributions. 

  • Only 1% of employees prefer to receive annual recognition
  • 3% would prefer quarterly recognition 
  • 6% opted to receive monthly recognition 
  • 36% expect weekly recognition 
  • 54% want to experience recognition frequently and linked to specific tasks they’re working on

The evidence is clear: If you fail to deliver recognition quickly, you’ll miss the mark on engagement and motivation.

7. Align with company values

A recognition program isn’t just about saying “thank you.” It’s also a chance to reinforce your company’s values and goals with desirable behaviors and actions you want to see in your employees. 

Example: Consider a company with a core value of environmental sustainability, including reducing its carbon footprint and minimizing waste. To support this value, the organization has a recognition program that rewards employees who come up with eco-friendly initiatives within the workplace. Employees who suggest a way to reduce paper usage by implementing digital documentation receive public recognition and a “Green Champion” award.

Now, imagine if this recognition program were not aligned with the company’s core value of sustainability. If the program only rewarded employees for achieving sales targets or strictly focused on cost-cutting measures without considering environmental impact, it would send a contradictory message. Employees might perceive that the company’s commitment to sustainability is insincere and merely lip service.

8. Make it easy for employees to exchange recognition 

Your employees are busy. They have bulging calendars, professional development goals to hit, and a life outside of work. The last thing you want to do is make recognition difficult and time-consuming—it must slot seamlessly into their workloads. 

To encourage participation in your employee recognition program, make it as easy as possible for them to submit praise and choose their rewards. This could mean using tools such as a centralized platform or app that allows employees to easily access their recognition rewards. 

Encourage employees with Benepass

Benepass Rewards and Recognition is the perfect program to acknowledge employee achievements. Our platform puts your workers in the driving seat by allowing them to select a meaningful reward. 

Here’s how it works: 

  • Step 1: Choose the event that would trigger a reward; for example, birthdays, anniversaries, career milestones, employee achievements, and special awards. 
  • Step 2: We’ll implement your unique policy template by coding it into the Benepass platform. 
  • Step 3: We’ll connect your recognition program to payroll for easy enrollment. 
  • Step 4: Your employees can sign up for your rewards and recognition program from day one. 

Ready to boost employee morale in your organization? Contact Benepass today to book a demo of our platform. We’re also available at sales@getbenepass.com if you have any questions about creating successful employee recognition programs. 

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Rebecca Noori

Rebecca Noori is a freelance HR Tech and SaaS writer who is obsessed with our world of work. She writes about everything from employee benefits and performance management to upskilling and productivity tips. When she's not writing, you'll find her grappling with phonics homework and football kits, looking after her three kids.

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