At its core, employee recognition is the open acknowledgment and expressed appreciation for employees’ contributions to their organization. It could be as simple as a high-five for a job well done (or a virtual high-five in a remote-work world), a special shout-out during a company meeting, or even a bonus for meeting a monthly goal. Recognition can take many forms, but whatever your approach, it’s one of the most simple and powerful tools you have to engage and retain your employees.
Say what!?
Really! A well-implemented employee recognition program has been shown to drastically improve engagement. Engaged employees are beneficial for workplaces in every way: they’re higher performers, they’re connected and committed to their company (no Great Resignation here!), and they’re willing to go above and beyond in their role. Here are a few stats to show you the proof is in the pudding:
- Organizations with highly engaged employees experienced a 3-year revenue growth rate 2.3 times greater than average. (Deloitte)
- Engaged and happy employees show a 31% increase in productivity and a 19% increase in task accuracy. (HBR)
- Companies with highly-engaged employees saw 59% less turnover, a 41% reduction in absenteeism, and a 21% greater profitability. (Gallup)
There are also risks to ignoring recognition. Forrester Research Employee Experience Analyst, David Johnson found that a top factor for predicting burnout was lack of recognition for hard work or accomplishments. Think about it. Imagine you are an employee that goes above and beyond, does something that moves the needle for the business but gets no validation in return. That’s a tough spot to be in.
Building a recognition program that works
All the benefits of recognition sound good. Now, where do you start? At Bonusly, we are experts at helping organizations introduce recognition programs to their employees, and here are our recommended steps for getting started.
Step 1: Make the case for a recognition program
Start by establishing a business case for a recognition program, tying your expected project outlines to desired business outcomes. Ask yourself what business problems an employee recognition program may solve and how solving those problems could contribute to overall business objectives. We have a couple of calculators that may help: the Cost of Employee Turnover Calculator and Rewards Budgeting Calculator.
Step 2: Build a team of champions
Once you receive buy-in from leadership, your next step is to find your team of champions to help you implement the program. Seek out leaders from across the organization who will help promote, communicate, and implement your recognition program. Here are the characteristics we look for in a champion:
- Interest in program
- Positioned as a team leader
- Knowledge of program benefits
- Ability to prioritize the program
- Positive track records
Get these folks on board early to help with the program rollout!
Step 3: Establish best practices
Before implementing any employee recognition program, get everyone aligned on the characteristics of effective recognition. Effective recognition fosters a sense of purpose, progress, pride, and belonging in employees. These are the building blocks to employee engagement and satisfaction. To build an effective recognition program, recognition should be:
- Timely: Recognition should be given as soon as possible to draw a clear connection to the positive behavior and to create a reward/repetition feedback loop.
- Frequent: Celebrate the small wins as well as the big ones! Gallup recommends recognition should be given at least every seven days to help employees feel valued.
- Visible: Make recognition visible company-wide! Visibility magnifies the impact of the recognition and also gives others insight into the type of work being done through the organization—a great perk as many employees are now working in hybrid, remote, or distributed environments.
- Specific: Acknowledge the details and context of why the recognition is given. Specific recognition helps employees understand exactly which of their actions contributed to their team’s goal.
- Values aligned: Tying recognition back to your company’s core values and strategy encourages everyone to work towards the same vision.
- Inclusive: Inclusive recognition helps foster a sense of belonging and purpose; more people are recognized when everyone is empowered to recognize and praise others.
Step 4: Build in scalability from the get-go
The best time to build in scalability to your recognition program is when you are scoping it out and getting ready for launch. There are a number of things to consider when building in scalability.
- Cost: How much does a good recognition program cost to administer and what does this cost look like for 10 employees versus 100. It might surprise you to learn that recognition programs don’t have to be expensive to be effective. Companies typically budget recognition programs at 1% of payroll with the most committed firms pushing this as high as 2% according to Forrester Research.
- Admin time: Consider the hidden costs and logistics of your program. Running to the store every now and then to buy gift cards for your team of five and handwriting notes for each person might be okay to start, but when your team grows to 50 or more, a manual program can become unwieldy and unsustainable.
To alleviate these challenges consider implementing rewards and recognition software. There are quite a few options out there (Bonusly included!) that can integrate with existing tools, automated rewards fulfillment, and even manage work anniversary and birthday celebrations.
For more tips on building an effective recognition program check out Bonusly’s Guide to Modern Recognition
Who has time for this?
Building a scalable recognition program can seem daunting at first. Here are some additional tips that will help you grow your recognition program with your business.
Tip 1: Empower your managers
Managers are on the frontlines of employee engagement and have a profound impact on the employee experience (Gallup). Arm your managers with the tools and knowledge to give recognition to their teams and you’ll have a whole squad of champions that will be doing the recognition for you. Here’s how to get managers on board:
- Explain the importance and impact of recognition. As an HR leader, you have a keen understanding of the power and importance of recognition. Your managers may not. Consider conducting company-wide training for managers that covers the importance of recognition, its impact, best practices, an overview of the recognition program your company has in place, how to use it, and the benefits other managers have seen from using it. Make this training a part of your manager onboarding process.
- Give your managers a voice. Gather ideas around recognition from your managers to give them a sense of ownership in your program. Plus, your managers likely have some great recognition ideas or tips around what has worked for them in the past. After collecting their feedback, show them how you are implementing their ideas or if you decide to not take a suggestion, explain why.
- Make sure your managers have the tools they need to give effective recognition. This includes budget, benchmarks to provide guidance and training where needed. This is where recognition software can really help.
Tip 2: Enable peer-to-peer recognition
Want to really spread out the responsibility and decentralize recognition even more? Consider enabling peer-to-peer recognition at your company. In a peer-to-peer recognition system, managers and co-workers are all empowered to recognize and reward the contributions of their colleagues. Peer recognition is powerful. It’s nearly 36% more likely to have a positive impact on financial results than manager-only recognition.
We have a whole guide on getting the most from peer recognition, but if you want the Cliff Notes version, here are a few things to keep in mind when implementing peer-to-peer recognition at your company:
- Make it super simple to give and see recognition. You can do this by setting up a program in workflows employees are already using. For example, if your company is using a messaging solution like Slack, consider setting up a recognition channel where employees can recognize a peer at any time.
- Provide rewards. In the early days of Bonusly, we offered two types of recognition programs. Customers could use our platform to give bonuses with or without real-world rewards. Right away, we noticed a significant drop-off in user participation when points given with recognition held no monetary value resulting in lower engagement rates. Our takeaway: recognition that is tied to real-world value created meaning for both the giver and the recipient. Integrating rewards into a peer-to-peer program can be the factor that makes your recognition program successful.
- Measure the success of your program. There are tools and techniques you can use to measure the effectiveness of your peer-to-peer program to ensure it is working and providing value. The simplest one is to simply ask your employees. Soliciting employee feedback through regular surveys is an excellent way to keep yourself apprised of your employees’ thoughts on the program, its value, how it can be improved, and more. If you’re already sending regular surveys, consider adding in a question or two to gather sentiment on your employee recognition program to measure change over time.
Tip 3: Add recognition to your HR tech stack
Consider all-in-one recognition platforms for easy program implementation and management. Employees want to appreciate each other. When offered a simple tool to do so, 44% of all workers will provide peer recognition on an ongoing basis. There are numerous other benefits to adding a recognition solution to your tech stack. One of the biggest is saving time on program admin as your company scales. When you link recognition software with an HRIS like Gusto, recognition for milestones like work anniversaries and birthdays can be automated along with adding new employees and removing those that have left the company. Check out this guide for evaluating HR software to get started.
We hope these tips will help you build a recognition-rich organizational culture.
Ready to simplify HR tasks and boost productivity? Check out our guide for the best HR software options designed specifically for small businesses
