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What is Employee Recognition?

15 min read   |  
Last Updated on
employee-recognition

In modern workplaces, employee recognition is crucial for creating a positive and motivated atmosphere. Employees are arguably the most important assets for a company. However, companies often struggle with retaining their top employees.

Research indicates that a lack of recognition is a primary reason for employees leaving their jobs. To retain and motivate your people, your organization needs a vibrant recognition culture.

Beyond individual acts, the transformative potential lies in establishing a culture where acknowledgment and appreciation are integral to daily operations. This shift extends beyond occasional programs, adopting a comprehensive approach with substantial benefits such as heightened engagement, unwavering loyalty, and enhanced performance.

This article will walk you through the basics of creating such a culture.

Key Takeaways

  1. What is recognition and why it matters.
  2. When and how to recognize employees.
  3. How to build an effective recognition program.
  4. New framework for you to measure and improve your recognition programs.

What is Employee Recognition?

Employee recognition is a strategic practice that involves acknowledging and appreciating employees publically for their diverse contributions, including high-performance achievements, daily tasks, teamwork, and positive behaviors.

This meaningful acknowledgment boosts morale, fosters a sense of belonging, and significantly improves workplace engagement, productivity, and employee retention by highlighting the value of their contributions.

When employees should be recognized ?

1. Reaches Goals and Milestones:

  • Completing major projects successfully
  • Exceeding individual or team performance targets
  • Achieving personal development goals, like completing a training program or certification
  • Completing Service Milestones

2. Demonstrates Exemplary Behaviors:

  • Going above and beyond their responsibilities
  • Displaying outstanding teamwork and collaboration
  • Showing initiative, creativity, and problem-solving skills
  • Embodying company values and promoting a positive work culture

3. Makes a Positive Impact:

  • Providing exceptional customer service or client satisfaction
  • Contributing to positive team dynamics and morale
  • Mentoring and supporting colleagues
  • Offering valuable ideas and suggestions that benefit the company

4. Everyday Efforts:

  • Recognizing consistent excellence and dedication
  • Appreciating daily contributions that keep the team moving forward
  • Celebrating small wins and progress towards larger goals
  • Acknowledging individual strengths and unique talents

Why is Employee Recognition Important?

The world of work is going through a transformation. We have an expanding millennial workforce, a competitive war-for-talent, and a global crises like pandemics.

Due to these shifts, it is more critical now than ever to focus on employee recognition.

1. Higher Employee Retention

Most companies struggle with high employee turnover rates. One of the main reasons for this is a flawed recognition culture. 79% of people who quit their jobs cite ‘lack of appreciation’ as their reason for leaving. (OC Tanner)

When you duly recognize employees, they get emotionally invested in their job. So they naturally tend to stay longer. This leads to reduced turnover and higher retention.

2. Higher Employee Engagement

Employee recognition is a primary driver of employee engagement in a company. Employees feel valued when their inputs are recognized timely and regularly. They begin to put in discretionary labor to continue their good work. It also results in increased productivity and better customer service.

72% of businesses agree that recognition does impact engagement positively. (Harvard Business Review).

3. Improves Work Relationships And Team Work

It is said that people don’t leave their jobs. They leave managers. So managers need to build strong relationships with team members.

Frequent recognition from managers can help improve manager-employee relationships. It helps in communication, builds trust, and bridges the gaps between them. For better results, managers should be trained on how to recognize employees effectively.

Employee recognition also helps in improving peer relationships. A culture where peers don’t hesitate to encourage each other is great for team morale and engagement.

4. Creates a Culture of Recognition

Recognition is contagious and is often reciprocated. Everyone likes getting appreciated. At the same time, people also like giving appreciation, cheering, and encouraging others. It provides a sense of satisfaction and helps build solid connections with peers.

When employee recognition becomes the daily norm, it profoundly impacts the company culture. It creates a positive environment where people value others’ efforts, qualities, and strengths.

5. Strengthens Company Values

83% of HR Leaders say employee recognition strengthens their organizational values. (Globoforce)

Companies may have different core principles like dedication, honesty, punctuality, excellence, and others. They would want their employees to work in ways that are in line with these principles. So they design their rewards and recognition programs set with company values.

Employees get recognized when they exhibit desired behaviors. This strengthens the organizational values in their everyday actions.

6. Build Employer Branding

A strong culture of recognition helps to strengthen employer brand value. Candidates get attracted to a company that values employees’ contributions. Positive employer branding becomes more significant with increasing war-for-talent.

Recognition also promotes employee advocacy. When workers feel happy at work, they share their positive employee experiences. Thus, they become active ambassadors for the organization.

7. Improves Employee Motivation

Employee morale rises when leaders highlight an employee's contribution to the business's success. It keeps employees motivated, happy, and they feel good about what they do.

Employee recognition also has a physiological impact on performance. Getting appreciated or loved creates ‘oxytocin’ in the body. Research says people under the influence of this ‘love hormone’ perform better. It reduces stress and can decrease absenteeism.

Related: 25 Employee Recognition Statistics You Shouldn't Ignore in 2021

Here's our take away from the above!

The work environment today has become ultra-competitive. Businesses are looking for the best talents and skills in the labor market. But even top-performing employees need high motivation to excel.

In Dale Carnegie’s words,

People work for money but go the extra mile for recognition, praise, and rewards.

Millennials entering the workforce expect instant recognition for doing a good job. They wouldn’t mind moving to greener pastures if they do not feel valued.

So companies are continuously strengthening their culture of recognition.

Types of Employee Recognition Methods

Companies are using multi-dimensional methods to make sure their employees feel cherished.Let’s have a look at the methods top companies use for building a vibrant culture of recognition.

Based on who gives recognition, we can classify employee recognition methods into the following types:

Top-Down Recognition

In his book "I Love It Here", Clint Pulver talks about the critical role leaders have in promoting a culture of recognition at work. They are the ones who establish a company’s core values. So they would naturally want employees to stick to it.

When employees display behaviors that mirror company values, leaders must praise their dedication. It creates a considerable impact on morale and engagement.

Direct-Report Recognition

Cindy Ventrice defines this as the recognition employees receive from reporting managers. She says teams respond more to their acknowledgment than those from senior leadership.

Managers have an important role in reinforcing organizational values upon employees. They can do this by providing frequent recognition of employee efforts.

They know the most about what an employee does all day. So it can prove to be the most authentic appreciation. Managers are also more likely to know what type of recognition will appeal to the employee.

Peer-to-Peer Recognition

Recognition from peers has a unique significance and can have the most substantial impact on employees. Peers who often work closely notice qualities that managers overlook. When peers recognize each other’s contributions, it strengthens their bond and builds trust. This ultimately increases engagement and retention levels.

Peer-to-peer recognition is also self-perpetuating. Leaders seldom need to take action to keep it going.

In their book “The Carrot Principle”, Adrian Gostick and Chester Elton gave the below classification of employee recognition.

Day-to-Day Recognition

These practices may recognize daily efforts. They are frequent, low-cost, and often intangible. These may include friendly nods, a pat on the back, or a thank-you email for employees’ efforts.

Day-to-day recognition can be mainly considered as a token of gratitude. They can be effective in maintaining everyday morale.

Above-and-Beyond Recognition

It focuses on recognizing employees when they go above and beyond what's expected of them. You may recognize notable results like saving costs, innovations, exceeding targets, and others. It usually consists of formal recognition in front of the whole team.

Career Recognition

It includes celebrations of professional milestones, years of service, and significant career growth. Such employee recognition is associated with different phases in an employee lifecycle.

Celebration Events

These events focus on celebrating achievements instead of rewarding performances. Tying up these celebrations with team successes boosts teamwork.

For example, teams would love to celebrate the completion of a grueling project. You may also acknowledge individual contributions during work anniversaries or birthdays.

Here's what we can take away from the above!

It is critical that you give the right form of employee recognition at the right time. With teams going remote, creating a sense of connection is more important now than ever.

It is vital to consider that every employee has unique needs. There can be no one-size-fits-all approach.

One employee may prefer verbal or social appreciation. The other may prefer tangible rewards.

Putting a little thought behind your employee recognition strategy can go a long way.

Here are some simple employee recognition ideas for your workforce.

Employee Recognition ideas at work

  • You can start with a sincere ‘thank you' and a personalized note focusing on the significance of their work’.
  • Wish your workers on their birthdays and celebrate work anniversaries.
  • Acknowledge critical habits of punctuality and diligence.
  • Organize outdoor activities such as team lunches and team-building exercises.
  • Provide a day or two off or a short paid holiday for outstanding performances.
  • Include a printable certificate along with verbal appreciation to establish its authenticity.
  • Prioritize wellness at work and plan out a robust wellness program for workers.

With digital employee recognition solutions, peers can now recognize each other instantly. Companies are giving out benefits, reward points, and special shout-outs through these platforms. All these make recognition more frequent, easy, and effective.

How to build a successful Employee Recognition Program?

Existing employee recognition programs have some fundamental issues:

  • Ill-defined objectives
  • Non-alignment with company values
  • Lack of clarity about the impact of recognition

So how can we solve these issues?

Here are some things that an employee recognition program needs to have/do to be successful.

1. Clear Vision

Before you implement an employee recognition program, you must be clear about its goals. Do you want more engagement or higher retention? Or perhaps you might want more sales. It will be best to set your program’s objectives in line with the overall mission and goals.

2. Timely & Frequent

Every achievement, big or small, should be appreciated at the right time. It should also be offered often and regularly. It might not be very fruitful to recognize an employee for something they did months ago.

3. Simple & Easy to Use

It should be simple for people to recognize each other's efforts. A good employee recognition program makes it easy for employees to recognize peers. But the formal recognition process should be easy to use too. Tech-based rewards and recognition software can be a huge help here.

4. Specific & Flexible

A thriving recognition culture specifies what kind of behavior it expects from employees. When employees know what is being recognized, they are likely to do it more often.

Programs should also be agile and flexible for employees to recognize each other on the go. It also makes it easier for distributed teams to stay connected through appreciation.

5. Inclusive

A strong employee recognition campaign requires pan-company commitment. Top leadership should constantly promote and participate in appreciation. Only then will employees take it seriously. Employees themselves need to play an equal part in recognizing other employees.

6. Measure Impact

Your recognition program may be up and running. But you also need to measure its impact on engagement and well-being. The best way to know this is to ask the employees themselves.

Do they feel appreciated enough? Are they motivated to contribute more to the team? Employee surveys are pretty cost-effective.

With pulse survey tools like Vantage Pulse, you can collect instant, fast, and real-time employee feedback.

7. Evolving & Adaptable

With changing times, business demands change. Along with it, employees’ needs change too. The best employee recognition programs are those that continuously evolve and adapt accordingly.

Here's the take away from the above:

The bottom line is that different individuals are motivated differently.

Employee recognition programs need to acknowledge the worth of every individual. At the same time, there should be an alignment with the organizational goals. Only then can it positively impact business outcomes and engagement levels.

In other words, recognition needs to be authentic and, at the same time, impactful. With this aim in mind, we have come up with a new framework. It will help you build a vibrant recognition culture at work.

Introducing the AIRe Framework For Employee Recognition

Recognition at work is like the air employees need to breathe upon and thrive. So you need to make sure you provide it in the right manner. It should be impactful as well as authentic.

To help you build this, we at Vantage Circle have created a new framework: the AIRe Framework for Employee Recognition.

The AIRe Framework is a powerful tool for companies to design, review, and implement their recognition programs.

It is based upon three themes of employee recognition:

  • Appreciation (A)
  • Incentivization (I)
  • Reinforcement (R)

All these should be delivered with a solid and genuine Emotional Connect (e).

The critical points of the AIRe Framework:

  • It believes that if a person makes genuine efforts towards a goal, they should get recognized.
  • Recognition doesn’t always have to be exclusive or tied to outstanding achievement. Sometimes, it just needs to be about appreciating and valuing the person’s efforts that they put in daily.
  • Recognition programs should be clear on the behaviors they want to reinforce.
  • Programs can use Emotional Connect to amplify the impact of employee recognition.

The AIRe Framework establishes a benchmark for companies to determine why their employees feel underappreciated despite receiving frequent and timely recognition.

But don't just take our word for it. Here is a link to our AIRe Audit tool, which will give you a free online analysis of how effective your current rewards and recognition practices are.

Themes of Recognition under AIRe Framework

framework-to-assess-recognition-efforts

1. Appreciation

Appreciation refers to an acknowledgment of employee contributions. But it is not just about high performance or extraordinary results. It can also be for things like day-to-day tasks and teamwork efforts.

2. Incentivization

It is the practice of including incentives to motivate the employees. Incentives encourage or tend to encourage action. Incentives can be a goal in itself which employees strive towards. These incentives can be both monetary and non-monetary.

3. Reinforcement

Reinforcement guides employees towards the behaviors that the company wants to promote. Once appreciated, they are more likely to continue doing that work.

Emotional Connect

Emotional Connect is the driving force behind successful employee recognition. It refers to the "feel-good" factor that an act of recognition brings. Both for the one receiving it and the one giving it.

The utility of recognition comes from how it is given rather than what is given. It is not the monetary value of the recognition that matters much. Instead, it is the process of how it is being given that can have a tremendous impact on the receiver.

Here is where personalizing the recognition comes into play. Each employee is unique. What might motivate one won’t necessarily motivate others.

In his book "Practicing Recognition", Roy Saunderson defines recognition as:

"the transfer of positive emotions from one person to another."

Whether it is given verbally or in written format, it should be done with real emotions. Otherwise, it will seem mechanical and insincere.

Applying the AIRe Framework

AIRe Framework breaks down each of the themes of recognition into dimensions. Companies can use these dimensions to assess their employee recognition programs.

Dimensions-of-Recognition-AIRe

Appreciation

Coverage
Coverage refers to how much of the workforce is covered by the program. As everyone likes appreciation, recognition programs should cover all employees from all levels.

Frequency
Psychologists say that there’s no such thing as too much recognition. But the frequency must go with the needs and expectations of employees.

Incentivization

Impetus
Impetus refers to the value of the rewards given. It can vary from person to person. The point is that the award values must be meaningful in relation to the average salary levels for each segment of employees.

Clarity
Clarity analyzes if employees understand how awards are determined and what they need to do to get recognized. If the employees are not clear on what to do to qualify for recognition programs, it won’t drive impact.

Reinforcement

Specificity
Specificity is the extent to which the program guides employees towards various behaviors. There needs to be a clear set of behaviors that the organization promotes. It will help create a broader organizational impact. But also, promoting too many behaviors might lead to confusion.

Alignment
Alignment reviews if the employee recognition program is deviating from the company's core values. Behaviors promoted by the program need to match with those promoted by the core values.

Emotional Connect

Personalization
Personalization is the extent of customizing a recognition program for your people. It may include sending personalized notes, giving them their choice of rewards.

Delivery
It is the way recipients receive recognition. In-person delivery with a personalized note is a powerful method. Even the smallest of positive gestures can make a huge difference. Simply tap into your creativity to appreciate your people better.

Here's the take away:

Organizations should adopt these principles to review their employee recognition programs. First, design them through the lens of Appreciation, Incentivization, and Reinforcement. Then, base them upon a solid Emotional Connect.

This way, the recognition strategy can improve the overall work culture.

How Vantage Circle can help?

Role-of-Technology-in-rewarding-workers

A digital solution can make it very easy for employers to reward and appreciate employees. It can make recognition smoother, faster, regular, and more frequent.

Let’s see how:

1. Instant Recognition

Millennials prefer on-the-spot recognition to yearly reviews. They need acknowledgment as soon as they achieve a goal or excel at work.

With our digital employee recognition platform, within seconds, you can post an appreciation post on the social feed within the platform in real-time. You can also take help of in-built AI feature to frame your messages.

2. Flexible Rewarding

Give employees the power to choose their rewards. Through a points-based rewards system, you reward them with redeemable points. They will have the flexibility to choose from multiple reward options such as gift cards.

3. Peer-to-Peer Appreciation

The platform fosters a culture of recognition, motivation, and happiness by allowing employees to appreciate their peers. The real-time social feed encourages engagement and interaction among team members.

4. Automated and Personalized Recognition

Vantage Circle's digital solution automates the recognition process, ensuring employees are acknowledged on special occasions or milestones. Features like the Wish and Service Yearbook personalize the recognition experience for work anniversaries and other significant events.

employee-rewards-and-recognition-service-yearbook

5. Recognition On The Go

Acknowledging the modern work environment, Vantage Rewards is compatible across multiple devices and platforms (Android, iOS), allowing employees to participate in recognition programs seamlessly while on the move.

employee-rewards-and-recognition-on-the-go

6. Involve Leadership

Vantage Circle helps you to involve senior executives and stakeholders into the recognition program through Panel Awards. This multi-level approver award system ensures fairness and equal opportunities for employees to be recognized.

Here, managers nominate potential candidates. After that, the panel of selected approvers votes for the nominated employees

employee-rewards-and-recognition-panel-awards

7. Easier Management

Managing an employee recognition program for a large workforce can be difficult. But, Vantage Rewards come with a feature called Management Dashboard. It can help management get a top view of the entire program. Admins get to analyze recognition-based activities across multiple teams in the dashboard.

8. Reflect Your Brand

Our recognition solution comes with white labelling. You can customize these tools accordingly to reflect your company's branding. You can even include company videos and manuals to reflect your company culture.

9. Data-Driven Insights

Vantage Circle offers a Dashboard feature, providing data-driven insights on how to reward fairly, equitably, and consistently, as per performance. This includes identifying top contributors, ensuring fair and consistent rewards, and addressing any gaps in the program.

employee-rewards-and-recognition-data

10. Integrations

Integrating with team collaboration tools and HRMS software, such as Microsoft Teams and Slack, enhances the digital collaboration experience. Vantage Circle facilitates peer appreciation within these platforms.

employee-rewards-and-recognition-integrations

11. Recognize Your Global Workforce

The platform adapts rewards based on the Standard of Living Index (SOLI) framwork in different countries, fostering a sense of value and connection.

recognize-global-workforce

12. Easier Budgeting

You can have complete control over how your budget is being used up, and even track it in real-time.

employee-rewards-and-recognition-Easy-budgeting-2

The Conclusion

Employee recognition is no longer just a nice thing to have in an organization. It is a critical component of every successful business today. So companies are going above and beyond to make recognition a natural part of their culture.

Dr. Bob Nelson says,

Take time to appreciate employees, and they will reciprocate in a thousand ways.

Be mindful, genuine, and sincere about acknowledging employees’ uniqueness. Appreciate them with what they place importance in.

Personalized recognition can go a long way. It can have an unparalleled positive impact on employee experience and well-being. It ultimately will have a dramatic effect on the company’s bottom line.

This article is written by Swati Baruah who is a content marketing specialist at Vantage Circle. She is a post-graduate in Labor Studies from Tata Institute of Social Sciences. Passionately interested in people dynamics, she enjoys writing pieces that strike conversations. An avid reader and a frequent traveler, she loves exploring new perspectives. To get in touch, reach out to editor@vantagecircle.com

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The Ultimate Guide to Employee Rewards and Recognition

The Ultimate Guide to Employee Rewards and Recognition