Although it seems that recognizing your employees is an utterly obvious thing to do, many companies struggle to set up a recognition programme that works. And by working, we mean increasing employee satisfaction, engagement, and loyalty as a result. The thing is, there have been many changes in the way and frequency you should recognize your employees. In fact, if you had created a successful recognition programme a decade ago, it might be no wonder if it no longer works like it used to. Let’s talk about what employee recognition is, how it can benefit your workplace, how it has changed, and how to set up a recognition programme that actually works (both for you and & your employees).
What is employee recognition?
As you might have noticed in your personal life, appreciation is a fundamental human need. Therefore, appreciation is also crucial when it comes to a workplace – it confirms to employees that their work is valued by others and inspires them to maintain and improve their efforts. Gallup research proves that employee recognition is a key factor influencing engagement & in turn, affecting the performance of the organization.
To put it into one sentence, employee recognition is the acknowledgement of behavior, effort, or a result that aligns with the business values and meets or exceeds set expectations. However, it could be argued to work beyond the level of individual employees, as it creates an image of what success & appreciation look like for other team members, this way reinforcing a positive work culture.
Then vs. now
As mentioned above, when it comes to employee recognition, the same old formula might no longer bring the results you have hoped for & witnessed decades or even a few years back. This is due to a few factors – a huge shift to remote working after the pandemic, increasing diversity when it comes to generations in the job market and other cultural changes accelerated by technology.
The above illustration demonstrates how recognition programmes worked in the past and how things have changed. These shifts can be summarized in 3 dimensions:
> Looking beyond the result. While in the past it was common to reward employees for exceeding set expectations when it comes to performance & loyalty, employers realized that effort-based recognition is a much better idea.
> You snooze, you lose. Focusing not only on past behavior but also noticing the current actions is connected to the fast-paced & high-tech environment in the contemporary work environment. Decision-making happens fast, which means that there is no time to design once-a-month honor boards – you should recognize as soon as you see and get express delivery on that reward. Naturally, ready-to-go rewards usually involve technology.
> Everyone is involved. And to involve everyone, you must do it frequently & transparently. Decentralized recognition, personalized rewards and a gamified way to do it mean more involvement, engagement, and satisfaction.
Overall, modern-day recognition programmes embody the concept of employment as a mutual relationship. To have a relationship with every single one of your employees, you must get to know them & offer a personalized experience.
Why should you create a recognition programme?
The numbers speak for themselves:
> 69% of employees say they would work harder if they felt appreciated
> 58% of employees say that recognition from their leaders is the best way to improve their engagement
> companies with employee recognition programmes report a 31% lower employee turnover
Recognized employees = engaged employees. Creating a recognition programme is a cost-effective way to gain all the benefits of an engaged team:
> Increased productivity. If you recognize and reward good behavior, your employees are more likely to repeat it. If this reinforced action supports the goals, values, or purpose of your company, you must not let it slide.
> Greater satisfaction. Have you noticed that a huge portion of complaining about your workplace is connected to the lack of appreciation that you feel for your effort? By recognizing employees, businesses can increase their sense of purpose in the workplace and make their daily tasks more enjoyable.
> Higher levels of satisfaction results in less stress & increased loyalty. Smaller rate of turnover is not just something that adds to your employer brand image but also affects business results.
> Recognition programmes can become a competitive advantage when recruiting. Only 14% of companies report having recognition programmes features in their employee value proposition.
Let’s talk HOWs
#1 How to recognize your employees?
It is clear that you should recognize based on company values and goals & in a personalized and consistent way. Beyond that, there is no one correct answer to tell you exactly how to recognize your employees – in fact, there are hundreds of different theories you can apply. Have you heard of the framework (and a famous book) about 5 love languages? Raphael Crawford-Marks argues that these 5 languages can help when thinking of how to recognize your employees – words of affirmation = verbal or written compliments, acts of service = offering to help with the workload, gifts = bonuses and other tangible benefits and so on.
Although this way of looking at it is interesting, it doesn’t offer much help to those businesses that are only trying to adopt recognition practices. Identifying opportunities to praise and taking action to acknowledge someone is easier said than done because it takes training and a receptive mind not to miss these occasions in a fast-paced environment.
Employee recognition remains an undervalued management technique mostly due to the lack of principles and procedures that help them apply recognition effectively. In other words, to recognize based on company values, goals & in a personalized and consistent way, you must set up a recognition programme.
#2 How to set up a recognition programme?
We’d argue that this question is much more important than all the other “HOWs” if you’re ready to harness this cost-effective, engagement-boosting initiative. Here is your 7-step guide to creating & reinforcing a recognition programme that works:
> Setting clear goals
What do you want to achieve with this initiative? Better employee satisfaction, increased retention? Think about it and set measurable and realistic goals as well as KPIs to check on a regular basis.
> Getting support from your leadership.
Leading by example is something that will help your recognition programme to take off. Support from the leadership (beyond the assigned budget) will motivate other employees and instill recognition in the company culture & DNA faster.
> Finding a programme owner.
Assigning one person to lead the programme is a good idea. This person should be organized and enthusiastic to make sure the programme is clear to managers and employees, communicate and remind of the programme regularly, take care of giving out awards, track KPIs & handle additional tasks that might arise in the process.
> Assigning budget for awards.
Although everyday interaction matters, awards are crucial to motivate people to do well and recognize each other. This is why leadership should support this initiative with an allocated budget. The usual size in US is 1-2% of the annual salary budget for each employee, but don’t be afraid to start smaller and increase later or even use intangible rewards based on your company culture.
> Setting up interaction rules.
What actions, initiatives, behaviors should be acknowledged and rewarded? Who can recognize and be recognized? We recommend having a list of occasions where recognition & award is absolutely necessary but also leaving some freedom (& budget) for colleagues to award each other for smaller good deeds, as employee recognition shouldn’t only come from managers. It is also important to reward people who give out recognitions and awards, especially when the programme is new.
> Leveraging digital tools.
If you want your programme to be a self-driving thing, it’s a good idea to explore some new methods and tools that help automate mundane tasks. For example, have you considered recognizing someone’s achievements publicly by posting it on social media? Have you tried an app or other platform to give-out awards? If your team is remote, how do you ensure a virtual space for people to recognize each other?
> Communicating (x1000).
You don’t have to have the answers to all possible questions right away, but it is a good idea to have a communications plan & be consistent in your messaging. Communication should definitely include messages from the leadership as well as the celebration of good examples. Think about how to best reach your people online and offline and how to make recognition messages stand out.
#3 How often should you recognize?
As often as you can, as long as you stick to the company values and goals & can ensure fair and personalized awards. Here are some ideas but you can definitely think about your own business:
> A job well done or a project finished
> Exceeded results and going an extra mile
> Being a *vibe* & improving office morale
> Ambassadorship on social media & beyond
> Other business values-based initiatives that impact your people or clients
Mistakes to avoid in the proces
What are the most common mistakes when building a recognition programme?
> Not considering the situation in the job market and the fact that we have multiple generations working for us. This means more care needs to be put into how to create a programme for a diverse team and how to communicate it effectively.
> Not customizing your rewards. The goal of recognition is to show someone you appreciate them and one-size-fits-all rewards won’t cut it.
> Not enough freedom related to who can recognize whom and not being able to choose the perks. Creating a recognition programme just so you have a recognition programme won’t do you any good – listen to what people want and give some freedom.
> Not utilizing technology. This is connected to all other mistakes companies tend to make – automating can help you with award customization, personalization, more freedom in who can participate in the programme, and so many more things.
Is it worth it?
Some would argue that time spent designing and implementing the programme is costly (training the managers, acquiring the awards etc.). But so is the introduction of any new process.
Another argument could be related to the measurability of this initiative. How can you measure profitability when a recognition programme is just one of many factors that influence employees in their job?
The bottom line is – case studies and research talk for themselves. And even if you cannot measure direct profitability, scroll back and read through other KPIs that can be measured, such as satisfaction and retention rates or finding star performers in your team.
You can do it
Even if you’re not ready to start a recognition programme, keep in mind that day-to-day recognition remains important. You can create immediate reinforcement and encourage desired behavior through small daily interactions. This goes both ways – even if you’re not a manager, be aware and alert for occasions to recognize your teammates. It feels good & does good.