Steps To Build An Employee Recognition Program That Works

Learn how to create a successful employee recognition programme that motivates employees to take action and improve performance.
Steps To Build An Employee Recognition Program That Works

In today's war for talent, leaders and organizations alike are on the lookout for strategies to both retain and attract top performers and at the same time boost employee productivity and organic growth. From designing flexible workplaces to providing new perks, a company’s endeavors to augment the workplace are stronger than ever. But in their quest for unique approaches and ideas, companies overlook a strategy that’s one of the easiest to execute: employee recognition.

A recent HBR study demonstrated that employees did not feel recognized for an average of 50 days. This leads to disengagement and demotivation, causing lower retention and productivity. Whereas, workplaces with a highly engaged workforce outperform their peers by 147% in earnings per share. Here are a few more stats by Gallup that you’ll find useful:

  • Employees aren’t recognized (enough) for their work
  • One of the primary factors for employees to leave their job is the lack of recognition.
  • 53% of employees say they would stay longer in a company if they feel appreciated.
  • 72% of businesses agree that recognition has a positive impact on engagement.
  • For 35% of the employees, the biggest hindrance to their productivity is the lack of recognition.

In today’s ultra-competitive work environment, you must think of ways to keep top performers loyal, productive, and happy. Companies with the winning edge are the ones that have the best-trained and well-skilled staff.

If you are looking to implement an employee recognition program at your organization, here’s all you need to know.

Types Of Employee Recognition:

Employees want to be acknowledged for their contribution and saying ‘thank you’ when it matters can mean the difference between awesome company culture and a broken one. Knowing the types of employee recognition available can help you create a program that will best benefit your employees. Broadly speaking they’re categorized as follows:

1. Structured or top-down employee recognition:

The structured method is a more traditional, top to down approach where senior leaders, supervisors, or managers offer appreciation or gratitude to employees. Typically, they take place in a structured, official, and ceremonial format. This process is often tied to an increase in responsibilities, professional development, raises, or promotion.  

A few examples include:

  • Employee nomination programs
  • The employee of the month
  • Years of Service Awards
  • Quarterly or yearly reviews
  • Retirement

2. Unstructured or peer-to-peer employee recognition:

Praise is not something only managers give to employees. This unstructured format is relatively new, and a more decentralized approach that emboldens employees to acknowledge positive achievements, contributions, and recognition of each other.

A few examples include:

  • Top performers of the week
  • The celebration of important life milestones
  • Performance incentive programs
  • Continuous recognition (point-based system)
  • Peer-to-peer recognition

Steps to create an engaging employee recognition program:

It’s not complicated to create an employee recognition program that’s befitting to your organization. It just needs some planning to create a system that people believe in and want to use. Following are a few key steps that can help you start.

1. Establish the reason your company needs an employee recognition program:

The first step is to understand the ‘how’ and ‘why’ your organization can benefit from a program as such. Of course, you want to strengthen morale, but, more specifically, what purpose will it serve your organization?

For instance, maybe you want to recognize someone who’s going above and beyond the call of duty on a large project, or highlight those who are displaying great leadership. Ascertaining your program’s objectives and clearly communicating this to your staff will ensure they know what they’re working towards.      

Determine the criteria for recognition and set objectives:

The ‘why’ you recognize your employees’ work is just as important as the ‘how’ you recognize their work. So, once you’ve developed an employee recognition program, determine the criteria for receiving any rewards. For example, it can be the number of projects completed, attendance at the workplace, number of work hours, etc.

Next, set your objectives. Some organizations create recognition programs with an intention of building a culture of recognition, while others look to increase employee engagement, strengthen a sense of accountability or create a positive work atmosphere. Ask yourself, what your objectives are? Start by identifying your organization’s purpose, values, and ways to further your organization’s purpose?

2. Identify a suitable rewarding and recognition method:

Beware, recognition programs don’t come with a one-size-fits-all strategy. Rather, you need to ensure your rewards and recognition go hand-in-hand with your employee’s needs. Successful and effective rewards and recognitions should be authentic, honest, and individualized.

Further, everyone needs a chance to be recognized. Your system should encompass all employees no matter area, function, level, tenure, or location. Also, it should be both manager and peer-to-peer recognition. Receiving recognition from both peers and higher-ups can positively impact culture, retention, and engagement.    

Allocate a budget:

After gaining some perspective about the recognition program, that’s when it’s important to attach a number to it. There are numerous facets to consider with costs, but to begin measuring, you can take into account some of the following:

  • Costs of introducing a new process
  • Costs of the recognition items
  • The time it takes to give recognition
  • Time spent on designing and implementing the program

You may feel you’re spending way over to recognize employees. But keep in mind the returns and rewards you will reap from a well set-up recognition system - increased productivity, attract talent, higher engagement, better performance, improved culture, happier employees, less turnover, exceed your overall business objectives, and more.

3. Introduce the new program:

Before the launch, this phase involves people hours for communication and training. From execs to managers to individual contributors, everyone must learn both why use the program and how to use it.

Next, it’s time to ensure your workforce knows the recognition program is in place. You can send out emails or department memos. Whatever method you choose,  it’s crucial your entire staff knows the program is set up, their hard work will not go unrecognized and they can expect rewards for high-quality performance.

You can take inspiration from General Motors (GM) who, across six continents, have over 160,000 employees. Back in 2017, they launched a GM Recognition Program, and via training videos, FAQ sheets, newsletters, targeted emails, etc. they could reach 67,000 employees across 26 countries. The result - they achieved a 97 percent activation rate (against an 80 percent target) after the first year.

Establish a committee to oversee the program:

Establish a committee that will help in the smooth operations of this program. This committee can record and compare the staff’s quality of performance and determine who is eligible for rewards and make sure you distribute them in a suitable and timely fashion.    

Don’t forget to measure the results:

‘Something that cannot be measured cannot be managed.’ This old saying perfectly sums up the importance of measuring the performance of employee recognition programs. If it’s executed scrupulously, it can guarantee a slew of benefits. The least of these is substantial progress in the overall productivity of employees. Then there’s also improved dedication and level of commitment towards the organization. Besides dedicated platforms or softwares, some effective ways to measure results are:

  • Direct feedback from employees
  • Measuring employee before and after satisfaction levels
  • Analyze changes in retention rates
  • Assess behavioral changes
  • Pulse surveys

Teams can dig deeper and measure implementation, employee participation, management. participation, etc.

Practice and revise:

Through the journey of your recognition program, you may face some challenges or limitations, at least initially. But remember, practice makes perfect. So, keep practicing and revising the format of employee recognition programs. Eventually, you are bound to get it right.

How a recognition program will benefit your business?

Without any mumbo-jumbo, let’s cut right to it.

  • Enjoyment of work and greater employee satisfaction
  • Increases employee productivity
  • Attract new talent
  • Retain top talent
  • Builds a positive workplace
  • Increases employee motivation
  • Creates a collaborative work environment
  • Increases profitability
  • Improves team culture
  • Decreases employee turnover
  • Higher satisfaction and loyalty scores from customers
  • Sense of belonging and gratification
  • Higher employee morale
  • Along with group health insurance, this is an additional tool to boost health

Get The Most From Your Employee Recognition Program

“Your number one customers are your people. Look after your employees first and then customers.”

In today’s workplace, it’s no longer just nice to have employee recognition programs – they’re critical and the ticket to employee satisfaction. If you want your employees to be productive, engaged, and happy, you need to tell them their work is appreciated and recognized. 

A winning employee recognition program can be the foundation for solid staff engagement, continuous employee development, and retention strategy for the future.

Couple an employee recognition program with a comprehensive group health insurance policy that comes with added benefits and your organization will have a solid foundation that’s all-encompassing.


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Written by  
Devangi Kamra
Devangi Kamra

A passionate and result-driven People Person with extensive experience in Employee Experience and operations. I bring with me knowledge, skill and the drive to set-up, run and provide guidance when it comes to the Human Resource Development. I have a proven track record across various HR functions, designed HR Policies and guidelines as well as MIS related to the HR Department. Having worked with organisations that follow Agile, I have imbibed the values of Agile in my working as well, specifically, Individuals and interactions over processes and tools. I truly believe, it is essentially people who make an organisation. An organisation can attain astronomical success if they get like-minded people, trust, show faith and grow along with them.

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