Rewards are a key factor in both employee engagement and productivity levels. In fact, research from Mercer found that rewards are correlated with levels of employee confidence and trust in their leadership. 

It’s therefore essential that business leaders regularly acknowledge individual and collective performance to underline their endorsement, and show the organization’s gratitude for employee input. 

The Employee Recognition Program is at the core of most businesses’ incentive structure. After all, employee recognition programs influence company culture by reinforcing behaviors that align with your company’s values, mission, vision, and strategy. 

What are Employee Recognition Programs? 

Employee recognition programs can take many forms; the recognition process may be structured or unstructured, delivered in writing or verbally. Regardless of the form they take, when employee recognition programs are effective and considered genuine, they improve employee engagement. Thus, employee recognition can strengthen the relationship between the organization and the employee. 

For more about employee engagement, see: https://joinhorizons.com/what-is-employee-engagement/

Effective employee recognition programs take individuals into account. For example, not all employees appreciate public attention or recognition. Therefore, effective employee recognition programs are tailored, not only based on the circumstances and objectives of the company but to each individual employee too. 

Recognition or rewards broadly fall into two categories: monetary and non-monetary.

Non-monetary Rewards

Non-monetary rewards, both formal and informal, are a constant component of effective employee recognition programs. Non-monetary rewards allow for a degree of creativity and can therefore be tailored to individuals/teams/countries or geographic regions. Popular non-monetary rewards include gift cards, certificates of appreciation, a publicly announced thank you on the intranet, events or leisure packages, or flexible working hours. 

Monetary Rewards

Monetary rewards and remuneration through bonuses can be tricky to implement and manage. The complex human relationships at play in modern workplaces, and wider competitive landscape can lead to monetary regards having some negative externalities. For example; within some individuals, a sense of injustice may lead to increased determination but for others, a loss of motivation is more common. 

It is crucial that monetary rewards are set up in a way that is both competitive externally and equitable internally.  

Why are Employee Recognition Programs Important?

As we’ve learned, employee recognition programs are at the core of most businesses’ incentive structures. Employee recognition programs drive employee engagement across the board, strengthening ties between an organization and its employees. 

Furthermore, from a management standpoint, employee recognition programs are tied to employee confidence and trust in leadership. It’s also fair to say that, at most companies, a key challenge is keeping their top performers motivated. This is followed closely by holding onto top performers. When done right, employee recognition programs can have a big impact on both recruitment efforts and employee retention. 

Of particular interest to fully distributed organizations or businesses with remote employees in various locations, is the way employee recognition programs can foster a culture of inclusion. Highlighting the achievements of remote employees can make them feel as though they belong. Improved peer recognition and awareness can strengthen relationships, further enabling employees to work well with colleagues in other sites.

Employees want to feel like they’re contributing to their organization’s success. When managers and business leaders take the time to highlight the measurable impact that an individual is having on the business; they make employees feel noticed and good about what they’re doing.

Examples of Effective Employee Recognition Programs?

Other than the specific details that are kept to 1-to-1 meetings, performance reviews, or appraisals, reporting on employee recognition is commonly made public. The company website, intranet or internal newsletter are great ways to share information on notable achievements or promotions.

Keep in mind though, that effective employee recognition programs are multi-faceted, and come in different forms. Recognition can be structured or unstructured, public or private, or verbal or written. 

Recognition is classifiable in terms of the process; delivery; or mode of communication.

Recognition by Process

The recognition process can combine both structured and unstructured processes. Structured employee recognition is a formal and well-outlined method for acknowledging employees. This type of recognition is periodic and follows established policies and procedures. 

Examples of structured recognition include:

• Company Recognition: where recognition follows an approved company recognition policy.
• Management Recognition: where recognition is given through management observations and appraisal. 
• Stakeholder Recognition: the recognition of management staff or executives based on the judgment of stakeholders, such as company owners, shareholders, or investors.

On the other hand, unstructured recognition is more casual and is usually organized by the employees themselves. The informal nature of unstructured employee recognition makes it easier to conduct and therefore more frequent.

Examples of unstructured employee recognition include:

• Peer-to-Peer Recognition: where colleagues acknowledge one another’s efforts.
• Bottom-up Recognition: this could be junior staff appreciating the mentorship of a leader, such as a manager or a department head.
• Client Recognition: where a client or customer acknowledges the performance or good service of an employee.

Remember that the examples of unstructured employee recognition mentioned above follow no specific rules and allow for much more creativity on how to acknowledge employees

Recognition by Delivery

Employee recognition can be delivered both publicly and privately. 

Public Recognition entails making the information available to the organization at large through the company’s internal newsletters, or to the general public via the company website. This form of employee recognition is suitable for highlighting desirable employee traits and showcasing the organization’s best practices. 

Private Recognition is delivered in a confidential manner, with only a few people being aware of it. For instance, an employee may receive the acknowledgment in the form of an email or through an appraisal. This form of recognition is commonly given by colleagues and is an excellent way to motivate those employees who prefer to avoid public attention. If you have trouble finding the email addresses of your employees you can use a LinkedIn email finder to find contacts of folks you’re already connected with on LinkedIn.

Recognition by Mode of Communication

Employee recognition can be communicated verbally or in writing.

Verbal communication is usually associated with unstructured recognition. Verbal recognition is a particularly compelling motivation strategy that leaders and managers can use to inspire employees and teams.

Written recognition is primarily used in structured recognition. In most cases, organizations reserve written recognition for major accomplishments. Employees consider this acknowledgment as heftier, more formal, and more credible than the verbal mode and usually have a greater desire for the written form.

How To Design an Effective Employee Recognition Program

The most effective employee recognition programs share 3 core characteristics: consistency, high-visibility, and some degree of tailoring to the employee(s) being recognised.

So, when designing your employee recognition program be sure to factor in the core characteristics above. In practice, all effective employee recognition programs are built upon the following practices:

1. Establish channels for recognition

Utilize the tools and communication channels your business already uses, such as email, instant messaging programs,  or collaboration tools such as team video calls to recognise employees, regardless of their location around the world.

2. Communicate regularly 

Whether it’s office-based employees or employees who work remotely or on a hybrid model, communicate about recognition regularly. This is a commonly used tactic to help reinforce trust and belief in leaders and the organization itself. Moreover, to improve email communication, consider implementing an SPF checker to safeguard against unauthorized access.

It’s important that any discussions around employee recognition are genuine and delivered with intent. Be aware that half-baked, poorly-planned employee recognition programs can have a negative impact on levels of employee motivation and trust. 

3. Celebrate key moments

The most effective employee recognition programs are designed and implemented by managers, leaders, and businesses that take account of even the smallest details. 

Key moments such as birthdays, work anniversaries, and performance milestones are prime opportunities to recognize employees. Mark the moment in a way that aligns with your company’s culture.

4. Encourage peer-to-peer recognition

Don’t underestimate the power of unstructured recognition, such as peer-to-peer recognition. Employees should be given the autonomy to be able to recognize their colleagues. Some businesses encourage employees to recognize their peers through the same channels used by management, but this should not be a hard and fast rule.

5. Careful use of PTO as an employee incentive

Paid Time Off is an excellent way to reward employees; however, the use of this incentive should be carefully considered. Promote mental health, nature, and recharge days or give employees a high degree of freedom in deciding how they use their PTO. 

However you choose to reward paid time off, be sure it’s an incentive that remains valuable and makes employees feel appreciated for their efforts.

Conclusion 

Employee recognition programs play a key role in increasing employee engagement and maintaining levels of motivation. Of particular interest to businesses with many remote employees working from various locations, is the way employee recognition programs can foster a culture of inclusion. 

By including remote employees in recognition programs, businesses can make remote or expat employees feel as though they belong. Our piece on expatriate employees found that employee engagement is crucial to negating many of the challenges of using expat employees, such as proximity bias. 

At Horizons, we specialize in the recruitment of high-level talent that help drive global expansion efforts. Horizons’ Global PEO services are designed to streamline your entry into new markets whilst remaining compliant with local laws.