Employee Recognition

The Complete Guide to Employee Recognition

Written by

Rachel McQuigge

What Is Employee Recognition?

Employee Recognition is acknowledging a job well done within the workplace. 

Anyone on your team can give recognition, which can take many forms. Recognition is important because it makes employees feel valued by their manager, peers, and the organization. Employees who feel valued are 4x as likely to be engaged at work. Engaged employees are more likely to stay at their jobs longer, take fewer sick days, and perform better —engaged employees are more valuable to your company! 

Employees who feel appreciated and recognized are 44% more likely to consider themselves “thriving.” Besides positive effects on your bottom line, employee recognition sets the workplace's expectations and prioritizes kindness and going the extra mile. Recognition is a powerful way to reinforce your company values daily. 

We'll walk you through everything you need to know about employee recognition: how it works, which should be involved in the process, how much it costs (or doesn't), and most importantly, why recognizing an employee's hard work is essential for both them and your company as a whole.

What does recognition look like in practice?

Employee recognition isn't just something that happens once; it's a process. Recognition means showing your employees that you appreciate them and their work. It can be as simple as saying "thank you" or providing a public acknowledgment of their contributions.

Recognition doesn't have to occur in one singular moment or event—it can happen throughout an employee's career with your company and outside the office environment. These moments of recognition can include public acknowledgments (such as awards), sending personal notes to employees' homes, or giving gifts such as flowers or cards.

Who gives recognition?

It's important to note that recognition can come from a supervisor, coworker, or even an external party. Recognition can be something as simple as a word of praise or a pat on the back—or it could be a more formal award ceremony that recognizes an employee for outstanding performance.

Company leadership (such as upper management) sometimes gives recognition. In other cases, coworkers recognize and appreciate their colleagues' contributions to the organization. Lastly, external parties such as customers may also provide recognition when they feel you've exceeded their needs or expectations!

Top-down recognition

Top-down recognition is robust and can be a motivator for the whole team. The more senior the person gives the credit, the more impact it can have on everyone.

For top-down recognition to work, you need an authentic relationship between the leader and the employee. When established incorrectly, recognition will not work because employees will not feel genuinely valued or appreciated by their managers.

You can also give awards for specific achievements. One of them is the employee who has been with the company for five years or has shown exemplary behavior during an event. For this, a company-wide event where employees are formally recognized works best for this type of formal award.

Peer recognition

Peer recognition is a great way to encourage and motivate your employees. Employees feel good when they receive praise from their peers, knowing their colleagues recognize their efforts. Teams can do this type of recognition in various ways, such as with certificates or small tokens of appreciation.

Will recognition work for my team?

Recognition is an effective tool to motivate, inspire, and encourage employees—regardless of the size or scope of your team. While it's true that large companies have more resources to put into recognition programs than small businesses do, this doesn't mean that recognition isn't viable for companies with fewer resources. You can express appreciation for your employees' contributions through a variety of different mediums:

  • A handwritten personal message
  • A card taped to their office door or sent to their home office
  • An award provided at a company-wide meeting

What will it cost?

There are multiple ways to determine the cost of recognition. The first is to look at what it costs when your employees are not happy or are just average performers. You may have decided that this is 10% of your company's profits. That would be an excellent start when budgeting decisions for employee recognition activities. To learn more, check out the deep dive WFHomie did on how the employee experience affects your bottom line.

Employee Recognition tools are often easy to install and free. WFHomie offers a free slack kudos bot. 

If you want to have a specific number in mind, then go back through your historical data and see how much money employee turnover and replacement costs over the past year, two years, and five years (or longer). If your company has not yet begun tracking employee experience data, an easy way to start is with eNPS. Learn more about eNPS here, and check out our easy-to-install slack tool here. 

Once you've determined what percentage of operating expenses goes toward employee turnover, apply these numbers as an estimate against future expenditures. You can divide each category by its percentage.

Turnover Costs / Total Cost = Turnover Percentage

Turnover cost informs how much your budget should be towards recognition and other efforts to reduce turnover. 

Why is Employee Recognition Important?

Employee recognition is the easiest and most effective tool to increase employee engagement and create a culture of appreciation, trust, and ownership. It's also a powerful way to boost morale and productivity.

Why? Because when employees feel appreciated, they're more likely to go above and beyond for their company—and stay put longer. Gallup finds that in 2022 21% of employees engaged at work, and 33% of employees thrive in their overall well-being. 

Yet when you acknowledge an employee's hard work or achievement with praise or rewards, you create an environment where people feel appreciated by managers and peers alike. That boosts motivation on both sides: it reinforces positive behavior from the worker while also motivating managers (who get to see their efforts have positive results). Companies with exceptional employee experience report 23% higher profits. Recognition is an easy step towards these profit margin benefits.

Key Takeaways

No matter what you’re looking for in recognition—to keep your team focused, get more done, or make the office more fun—we hope this article has given you a few ideas to try. We believe recognition should be an integral part of every company’s culture. If employees feel appreciated and valued, they will feel motivated and engaged with their work; this will naturally lead to better results for everyone involved! Learn more about WFHomie’s solutions to easy workplace recognition here.

Why is Employee Recognition Important?

Recognizing your employees for their hard work and achievements is essential to any business. According to Gallup's analysis, only one in three workers in the U.S. strongly agree that they received recognition or praise for doing good work in the past seven days.

A study between Gallup and WorkHuman found that when implemented effectively, recognition makes employees 56% less likely to look for opportunities elsewhere and 4x as likely to be engaged, among other findings. Recognition can help employees feel more motivated, improve their performance, and increase productivity. But how do you recognize your employees effectively? Well, it's essential first to understand why recognition improves these aspects of the workplace before you start thinking about employee recognition strategies:

Increasing Productivity

Employee recognition is essential because it increases productivity. If workers feel appreciated and valued by the company, they will be much more motivated to work harder and more efficiently. It’s true—real-life examples have shown that when employees feel recognized for their hard work, they can see a 28% improvement in the quality of work produced.

In addition to increasing productivity, employee recognition will also impact other areas of your business: it can help improve morale and reduce turnover rates as employees feel valued by their employers. A happy employee base is one of the essential parts of any successful business!

Improving Retention

Retention is crucial when you consider that businesses in the United States lose $1 Trillion annually due to voluntary turnover alone. And while there are many ways to encourage retention proactively, they all start with recognition because it shows people how their efforts contribute to the organization's overall goals—which translates into feeling valued and appreciated by their bosses.

But recognizing employees isn't just about making them feel good; it's also about conveying that their contributions matter within an organization and highlighting what makes each person unique (or at least emphasizing those traits). When done right, recognition helps build trust among staff members, which ultimately makes them more committed to doing their jobs well—and staying around longer!

Decreasing Absenteeism

One of the most critical ways employee recognition impacts your organization's outcomes is by decreasing absenteeism. Recognition provides employees with a sense of job satisfaction. Job satisfaction is related to absenteeism, as employees who are satisfied with their jobs will be likelier to show up for work regularly.

Another way recognition can decrease absenteeism is by motivating employees to come to work on time and stay for the entire day. Some people may feel like they don’t get enough out of their jobs. Suppose they don’t get any special attention from their employers or don’t feel appreciated at all. A lack of appreciation could make an employee want to leave a position early and avoid returning. This reaction is especially true when there are other options available where the employee might feel they will be happier working elsewhere (even if those options pay less than what you currently offer).

Keys to Effective Employee Recognition

Make recognition accessible.

‍The more easily managers and employees can give recognition, the more they will do it. Companies must prioritize equipping managers with the resources they need—both in time and money.

Embed recognition in the company culture.

Recognition should be fundamental to the core values of your company. Make recognition a daily habit, and set aside designated times and events to highlight and make it memorable.

Prioritize recognition.

‍Give recognition the attention it deserves. Set aside the time, money, and energy needed to get it right. Assess the current state of organizational recognition—is it having its intended impact? Set your investment in recognition strategy up for success by thinking through implementation thoughtfully and making it integral to the culture.

Prepare managers.

‍Managers play an essential role in recognizing the achievements of employees. Teach managers how to recognize their employees and the benefits of doing so.

Leaders must set the example by providing recognition themselves. Recognize the importance of managers. They often receive less recognition. Let employees know that what they do is essential. 

A couple of takeaways

Acknowledging your employees’ hard work can be one of the most rewarding experiences as a manager. Building a company culture that promotes recognition takes time and effort. Still, according to existing research, it can be invaluable for increasing productivity, improving retention rates, and decreasing absenteeism. This blog post discussed why recognizing employees is essential and provided tips on how to do so effectively at your workplace! Check out WFHomie’s Slack Kudos Bot here.

Types of Employee Recognition

Successful companies recognize and reward their employees. A study between Gallup and WorkHuman found that when implemented effectively, recognition makes employees 56% less likely to look for opportunities elsewhere and 4x as likely to be engaged, among other findings. Recognition can help employees feel more motivated, improve their performance, and increase productivity.

Recognition is a way of thanking an employee for doing a good job. It can take many forms, such as verbal praise, written praise, and bonuses. For your company’s recognition program to be effective, you should know the different types of employee rewards and recognition and when to give recognition.

Types of Recognition

Recognition should become natural, a part of your organization's fabric. It can take many forms, including kudos, written praise, verbal praise, and bonuses.

Most importantly, everyone within your organization should give recognition often. The more frequently you recognize your team members, and team members recognize each other, the more likely they will continue to do exceptional work that benefits your organization and themselves. Frequent recognition also creates and sustains a culture of appreciation that motivates high performance in employees.

Employees may also feel appreciated when they see that others have received similar awards in the past or are currently receiving them; this could motivate them to strive for equal recognition themselves!

Written praise

Written praise is a form of employee recognition that allows you to recognize and reward an employee’s contributions. A letter of appreciation for a job well done can acknowledge the hard work, dedication, and commitment that your employees have shown. Managers can give written praise to employees in front of their peers or in private. It’s essential to remember that praise should be personalized, so it reflects the relationship between the manager and the employee and their performance on the job.

Written praise can take many forms:

  • A letter from the CEO thanking an employee for their contribution
  • An email from a manager thanking an employee for going above and beyond on a project
  • An acknowledgment on social media recognizing an associate's service year anniversary
  • A message sent in a public collaboration space like Slack!

Verbal praise

Verbal praise is a powerful motivator. It can be more effective than monetary rewards, especially in public. Think about the last time you praised someone for a job well done. Did that person smile and say thank you? Did their actions change for the better?

The power of verbal praise comes from the association between what we say and how we feel. In other words, when we tell someone, they did something well—no matter how seemingly insignificant—we also tell them that they can do things well overall. 

By saying "good job" or "I appreciate your hard work," you're telling employees that they have done something praiseworthy (and not just acceptable). This positive feedback creates an association between themselves and being good at their jobs; over time, this self-image will translate into increased productivity when employees are motivated by internal rather than external factors like money alone.

Bonuses

Bonuses are a great way to reward employees for their performance and work ethic, but they also can motivate your team when used correctly. To get the most out of your bonuses, know how they work and what types of bonuses will benefit your organization the most.

The first step in using bonuses effectively is understanding how an employee earns a bonus. Award bonuses for specific behaviors or outcomes that drive business results, like sales goals or other metrics related to performance. They can be paid out quarterly (or at any pre-determined interval) based on meeting these goals. The strategy of awarding bonuses over time highlights how they can be motivating. Use rewards to recognize productive behavior over time, so workers don't lose focus on their objectives as soon as they've achieved them!

When should recognition be given?

Recognition should be given as quickly as possible after the employee does something good. This recognition can be as simple as saying “thank you” or giving a small gift, such as a candy bar or coffee mug. It’s essential that your recognition includes praise for the person’s accomplishment and shows that you appreciate their hard work, effort, and performance.

When an employee has completed a project on time or ahead of schedule: Recognize them with verbal praise. If it is a particularly significant project, reward with something special like extra Vacation days or an evening off work to enjoy themselves (and don't worry about taking too much time off - they'll appreciate this gesture more than anything else!).

This type of recognition is great when an employee consistently meets deadlines because it reinforces good behavior by rewarding employees who do things right daily! If you notice one of your employees doing this well, always consider giving them an extra day off each week so they can do some personal errands without feeling rushed all day!

Recognition can also be given at any point; it should become a habit throughout the organization to encourage everyone, leaders, managers, and peers, to give recognition when completing a project.

Team Building Events

Below are examples where recognition should be top of mind:

  • Employee Appreciation Day: A day to thank employees for their contributions.
  • Year-end Parties: Annual holiday parties or other celebrations held at the end of a year's work.
  • Retreats: Meetings where employees get together to discuss projects, share ideas, and bond as a team.
  • Team Building Events: Activities that bring people together for activities such as escape rooms (virtual or in-person), fun games, or even a boba tea making class help them develop personal relationships with one another in an informal setting.
  • Project Completion: Awards given out by managers to recognize employee accomplishments, including sales awards, performance bonuses, service awards (e.g., “Employee of the Week”), and safety awards.

Employee’s first day

You can create a positive first impression for your new employee by ensuring they feel welcome on their first day. Making recognition a part of an employee’s first day also helps establish recognition as a company value in the new employee’s mind. It’s essential to make them comfortable, not only because it helps them fit in more quickly but also because research shows that having an excellent first impression of an organization is one of the strongest predictors of future job satisfaction. Here are a few ways to ensure that happens:

Introduce the new employee to their team members and give them time to get acquainted. The best way to do this is by bringing everyone together at once—word spreads quickly in small teams, so letting your employees know about each other right away will help foster a sense of camaraderie. You might also consider introducing the new hire at an all-hands meeting; this lets everyone know that there's been an addition to the company and gives people who weren't there for orientation a chance to meet them too!

Start them out with some easy tasks or projects so they get comfortable with their role at work as soon as possible, then slowly ramp up their workload until they are ready for more responsibility down the road!

Milestones

Milestones are important to recognize. They mark a significant event in a person's or organization's life, and gifts, rewards, or other forms of recognition are ways to celebrate.

The following are some significant milestones:

  • Starting at your company (when they start)
  • Signing their first client/project/promotion
  • Getting promoted from one position to another (e.g., from junior manager to senior manager)
  • Winning awards for their work

Work anniversaries

For employees who have been with your company for a year or longer, you can give them a gift to show that you value their contributions. Work anniversaries are a perfect time to reward them if they've hit some milestone like a promotion or significant accomplishment.

Celebrate the first anniversary with something like cake or a gift! The celebration can be a gift sent to an employee’s home office in a remote workplace. You can offer small gifts such as mugs or pens with your logo during this time. If money isn't readily available in your budget, consider giving the employee something they need, like an amazon gift card.

Project completion

Project completion is another excellent time for employee recognition, as it’s a natural milestone in the life of any project. When you give your team something to work toward, they will be rewarded after completion. Knowing this sets a standard and provides motivation to reach that project's finish line.

If you want your business to succeed, you must recognize your team members' efforts when they do something right or go above and beyond expectations.

Building a successful recognition program

When it comes to building a successful recognition program, there are a few things that you want to consider:

Get buy-in from management. Your organization's leadership team must be on board and supportive of the program. If they aren't, it could be difficult for you and your colleagues to implement the kind of culture you want for your workplace.

Involve employees in the process as much as possible. Ask them what types of recognition they like best, how often they'd like something recognized, and by whom (i.e., upper management vs. peers), etc.—and then create an employee survey so that everyone can contribute their thoughts on this topic!

Measure the effectiveness of your employee recognition programs regularly using data points such as the annual turnover rate or average tenure length. This way, you'll know which programs are more effective and can iterate and improve over time. 

It’s essential to understand how employees work, what motivates them, and why specific forms of recognition may be more successful than others. Employees who feel appreciated and recognized are 44% more likely to consider themselves “thriving.” It’s also essential to ensure that your program is aligned with your company's culture and consistent with corporate values. Lastly, everyone in the organization must know what types of rewards are available, so they know where they stand regarding recognition.

Learn more about how WFHomie Kudos makes employee recognition easy and free!

Employee Recognition Tools

Employee recognition tools are an essential part of modern organizations. A study between Gallup and WorkHuman found that when implemented effectively, recognition makes employees 56% less likely to look for opportunities elsewhere and 4x as likely to be engaged, among other findings. We’ve rounded up the best employee recognition tools for HR departments of all sizes to help you design a personalized rewards program that fits your needs. There are a few things any leader needs to consider to implement the right employee recognition tools and ensure their effectiveness. 

At a high level, it begins with understanding your organization and being aware of toggle tax. Next comes evaluating what integrations work with your current HR tech stack and collaboration tools. Finally, consider what employee recognition tools are going to scale easily and provide you with the information to make data-driven decisions around your employee recognition programs. 

Understand and respect your team's needs.

You need to understand and respect your team's needs. Your employees work hard and deserve a workplace that enables them to do their best work. You must find out what motivates each employee on your team—what gets them excited about coming to work each day? What makes them feel like they are making a difference in the company?

If you can pinpoint what drives your team, you can tailor your recognition program and tools around those risk and incentive points. This allows leaders to give employees what they most need and want so that they are aligned with your company's mission and vision. Chief did a deeper dive into how to navigate this dynamic as a leader here. 

Do your employees want to learn new skills? What do they need to perform at their best? You can't meet these needs if you don't ask your team what they want.

Once you know what motivates your team, you can create a work environment that supports their needs. You'll also be able to provide them with the tools and resources they need to do their jobs effectively. For example, if an employee is interested in learning new skills and wants more opportunities for advancement within your company, consider providing ongoing training or mentoring opportunities.

What is "toggle tax"?

Toggle tax is a fancy name for a simple concept: employees must expend time and energy switching between layers of technology and multiple devices. HR Brew partnered with Harris Poll to understand toggle tax better. They found that employees with one HR platform felt confident finding the information that they need, but this confidence dropped by nearly 20% when using more than one.

This phenomena of toggle tax necessitate leaders to consider integrations and the value added versus the time and energy taxed when onboarding new technology into their employee recognition programs.

Integrations

One priority when considering employee recognition tools should be integrating your new system with your current HR tech stack. You can integrate your employee recognition system with other HRIS systems, collaboration tools, SSO solutions, and employee analytics resources.

If you're integrating your employee recognition system into another platform (like a customer relationship management tool or an expense reporting solution), some standard integrations include:

  • Connecting to payroll and time tracking software to create an automated process for awarding points for attendance or working overtime hours. For example, when an employee clocks in on time during their birthday week, they get awarded points automatically by integrating the ERS and their payroll provider's software.
  • Employee Recognition Integrations with Collaboration Tools like Slack - These integrations allow you to award points automatically through messages sent directly from Slackbot without having anyone log into your ERS account first!

HRIS integrations

Integrate with your HRIS system. If you have a large number of employees, it can be challenging to keep track of all the employee recognition gifts sent out by hand or mail. An HRIS is a software tool that allows businesses to manage their human resources and payroll in one place. Your employee recognition tool must integrate with your HRIS so that you can automate sending out gift cards and other rewards promptly.

Collaboration Tools

Integrate with collaboration tools. You can use employee recognition programs to encourage employees to collaborate and share ideas instead of working in silos.

Managers should create a culture where everyone is encouraged to give and receive feedback, support their peers, and contribute to the success of the team and the company as a whole.

Integrating with collaboration tools will help you build an engaged workforce that works together toward common goals. 

Integrate rewards into your recognition programs

One of the easiest ways to boost your employee recognition programs is by combining them with rewards. Seek out employee recognition tools that enable both free recognition and reward-based recognition.

Rewards are one of the most effective employee recognition tools for many reasons. First, they're flexible and scalable, allowing you to match the proper reward with each recipient. Second, they can be anything from a gift card or special event to a charitable contribution in honor of an employee's birthday or anniversary at work.

Share people analytics

As a manager, you have access to a treasure trove of data about your team. You know how many hours they log and what projects your employees are assigned. You can see how often they've been late or missed deadlines. But do your employees know all this? Do they feel like management is being transparent enough with its metrics?

If the answer is no, then it might be time for some employee recognition training and development—especially if you want to boost productivity among your team members!

The first step to employee recognition training is to know what you want. Are you trying to increase team morale? Increase productivity? Or do you simply wish employees to feel like they're part of something important? Once you have an idea of your goals, it’s time to develop a plan to help you achieve them.

Start by identifying the areas where your team needs improvement. Are they not working hard enough? Do they feel like management doesn’t appreciate them enough? Or are they just bored with their jobs and need something new to keep them motivated? Once you know what's wrong, it will be easier to devise solutions that will work for everybody involved.

Scale easily

As your company grows, you’ll want to be able to scale up and down. The recognition tools we recommend should be easy to use and quickly implemented in any environment. What tools these are will be unique to your organizational needs. Also, employee recognition is a long-term investment that can have huge returns for your business if done correctly!

WFHomie Kudos

WFHomie Kudos is an employee recognition tool that integrates directly into slack so there is no worry about toggle tax. Our kudos bot provides understandable and actionable insights that will help your managers make decisions. Kudos has been designed and optimized from the bottom up to help encourage employees in a distributed workforce, we understand that recognition tools have been known to create paralysis through analysis. 

WFHomie Kudos is free to install and use, but it also has the capability to give your team the gift of giving. Team members can quickly and easily gift each other in the moment. Learn more about WFHomie Kudos bot here.

What comes next

When it comes to people management, many tools are available to make your job easier. In this post, we’ve focused on five key ideas that are particularly helpful for leaders considering employee recognition tools: understanding your people, understanding toggle tax, identifying key integrations, prioritizing people analytics capabilities, and prioritizing scalability. The key takeaway here is to choose the right tool for your organizational needs. Once you've decided which suits you, implementing them into your daily routine should be easy as pie!

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