The Empuls Glossary

Glossary of Human Resources Management and Employee Benefit Terms

Employee Recognition

Employee recognition refers to the acknowledgment and appreciation of an employee's contributions, efforts, and achievements in the workplace. It is a crucial aspect of fostering a positive work culture and promoting employee engagement. Recognition can take various forms, both formal and informal, and is aimed at reinforcing desirable behaviors, boosting morale, and creating a sense of value for employees within the organization.

When employee recognition programs are genuine, unique, and thoughtful, they strengthen the employer-employee relationship. It reinforces behaviors that align with the organization's mission, vision, values, and strategy.

What is employee recognition?

Employee recognition is the act of appreciating and acknowledging employees for their contributions to driving an organization's mission, purpose, and values. It is one of the most crucial factors that help drive positive company culture, workplace engagement, productivity, and retention.

Employee recognition can take up different forms, which include:

Leadership-led recognition
Manager-led recognition
Peer-to-peer recognition

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Why is employee recognition important?

A well-planned, well-timed, and well-executed employee recognition program can positively impact different business aspects, including turnover, morale, purpose, productivity, and engagement.

When employees feel appreciated and valued, they are not only motivated and engaged but also go the extra mile with their day-to-day tasks. They are high performers, committed, and connected to their organization. Companies that emphasize recognizing and praising employee achievements witness higher engagement levels.

On the other hand, an unintuitive, non-existent, and poorly-implemented recognition program can turn things upside down. It decreases engagement levels and even pushes top performers away.

Listen, recognize, award, and retain your employees with our Employee engagement software

What is an employee recognition program?

An employee recognition program is a method to recognize, appreciate, and motivate employees by rewarding them for their excellent work. These programs are designed to drive engagement, maintain high behavioral standards, and publicly applaud big wins.

A well-planned employee recognition program helps:

Increase engagement levels
Foster an inclusive workplace culture
Boost employee retention rates
Encourage high performance
Make employees feel happy
Drive better customer experience

What are the effective ways to improve employee recognition?

You'll know the importance of recognition better if you have felt undervalued or under appreciated at work. Employees who aren't recognized or rewarded for good work are twice as likely to quit within a year.

People aren’t motivated only by money. Instead, sincere and smaller gestures like ‘thank you’ can be highly powerful in leaving a positive impact.

Here are some tips to help you improve employee recognition:

Recognize personal accomplishments of employees: Personal recognition is vital for employees, so make sure to extend your thanks and reward employees for their efforts individually. Individual recognition matters, as it doesn’t make one feel as if they are “just a number.”
Reward top performers: If you notice any team member performing exceptionally well at work, acknowledge this immediately and delight them with a reward whenever and wherever you can. Doing this makes the employee feel on top of the world and shows others that their hard work will be rewarded if they do well.
Encourage peer-to-peer recognition: While receiving recognition from superiors feels good, receiving appreciation and recognition from colleagues feels even great. It helps reinforce company culture, lower employee turnover, and keeps employees happy.
Celebrate victories: A recognition award is the most effective when tied to a milestone or achievement. Say, for instance, you can reward your team member when they complete a noteworthy project or give a public appreciation.

What are the types of employee recognition?

Employee recognition can be classified primarily into two types:

Structured recognition: This type of employee recognition is an intentional approach to recognizing and rewarding the team members. Managers or companies are most likely in charge of these types of praise.

Example: Employee of the Month, Long tenure awards, Annual merit raises, Retirement, etc.
Unstructured recognition: This type of employee recognition takes an unstructured approach to remove the unessential boundaries of conventional employee appreciation, such as Employee of the Month. Peer-to-peer recognition or top-down recognition (less official) are ways to achieve this type. Say, for instance, praising a team for doing something amazing without giving them any formal award. These rewards come in many forms and help pull the organization forward.

Example: Peer-to-peer recognition, Performance reward programs, Continuous recognition (or points-based system), Life milestones awards, etc.

How to create an employee recognition program?

Here’s a step-by-step process to help you create an employee recognition program:

Determine the purpose: Take some time to jot down the reasons behind launching employee recognition programs, the benefits team members will reap from it, and the outcomes you’re trying to achieve.
Understand the key characteristics of recognition: For your employee recognition programs to be effective, ensure they are frequent, timely, tangible, publicly visible, specific, values-based, and inclusive.
Set the budget: If you’re serious about your appreciation programs, it’s vital to have a budget (even if small). Undoubtedly, great recognition costs money, but you will earn that back with enhanced productivity and higher peer engagement.
Define the objectives and criteria: Outline the goals, criteria, and parameters clearly to hit your benchmarks. Define these things: What behaviors to reward, When should employees receive recognition, How often, Who should it come from, and the type of rewards to offer.
Bring it to everyone’s notice: Start marketing the employee recognition program and the benefits they will get from it days ahead of its launch. Reach out to every employee via town hall, group meetings, email, chats, internal newsletters, or wherever they are.
Launch the program: Make sure to film a quick video of it or screen record it if you are doing it as a virtual meeting.
Measure its success: Send a survey a few hours after the recognition program’s launch to gauge what employees thought about it.

How to measure employee recognition programs?

Measurement is no longer a 'nice to have.' Instead, it is crucial to know how successful the recognition strategy was. Most business leaders often face the issue of using engagement platforms that fail to measure data with their recognition initiatives.

That's why choosing a platform with built-in capabilities to measure those metrics is vital – it's the best and most straightforward way to track your success and shortcomings.

Here are a few ways to measure employee recognition programs:

Periodic surveys: Employee feedback is one of the best ways for organizations to get good insights into what their workforce thinks about the recognition programs. It helps them understand if they are right on track if such programs are keeping their employees happy, or does it require any improvements.
Track participation rate: Keep an eye on the number of employees actively participating in the recognition program. If a few aren't, then find out the real reasons behind it and see what best you can do to reach various roleplayers. Also, keep track of how often they interact.
Measure productivity: The primary purpose of employee recognition programs is to motivate them to keep doing great work. So check the before/after of these three factors to measure the success rate of your employee recognition programs—Retention rate, Turnover percentage, and Productivity levels.

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.

eNPS:

eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

Promoters
Employees who have responded positively or agreed.
Detractors
Employees who have reacted negatively or disagreed.
Passives
Employees who have stayed neutral with their responses.

What is an employee recognition software?

An employee experience software is a set of tools companies, and HR leaders use to manage every facet of the employee recognition program. It's a brilliant way to improve company culture; help teams recognize workplace success and other important milestones.Pro Tip: Make peer recognition candid, social & fun. Let’s start building a culture of appreciation Talk to our culture expert today!

How to measure the ROI of employee recognition?

Measuring the return on investment (ROI) of an employee recognition program can be tricky, but it's important to demonstrate its value to your organization. Here's a breakdown of the key steps:

1. Define Your Goals:

What do you want to achieve with your recognition program? Common goals include:
- Reduced turnover rate
- Increased employee engagement
- Improved customer satisfaction
- Enhanced productivity

2. Choose Relevant Metrics:

Once you have your goals, identify metrics that track progress. Here are some examples based on common goals:
- Turnover rate (reduced turnover translates to cost savings)
- Employee engagement surveys
- Customer satisfaction surveys
- Productivity metrics (sales figures, output per hour)

3. Establish Baselines:

Before implementing the program, measure your current performance on the chosen metrics. This gives you a baseline to compare against later.

4. Track and Analyze Data:

After launching the program, consistently track your chosen metrics. Look for trends and correlations between recognition efforts and improvements in your goals.
Consider using surveys or focus groups to gather qualitative data on employee sentiment and program effectiveness.

5. Calculate ROI:

Here's a basic ROI formula to get you started:
ROI = (Total Benefits - Total Costs) / Total Costs * 100
Total Benefits: This represents the measurable gains from your program, like cost savings from reduced turnover or increased revenue from improved productivity. Quantify these benefits whenever possible.
Total Costs: This includes all expenses associated with the program, such as software fees, rewards, and administrative time.

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