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Employee recognition and rewards programs

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Employees are the key to your organization’s success. Recognizing their efforts through well-designed reward programs isn’t just a nice gesture – it’s a smart way to keep your team motivated and your business thriving. When employees feel valued for their hard work, everyone wins.

The Importance of Employee Rewards

Some of your employees likely feel underappreciated. Research from Workhuman found that 46.4 percent of employees only feel somewhat valued, and 10.7 percent don’t feel valued at all.

Employers are struggling with low employee engagement, high burnout and expensive turnover, and feelings of underappreciation from employees can exacerbate these challenges. According to PennState Extension, a lack of support from the organization is one of the main causes of employee disengagement. One way employers can help is by supporting employees to help them feel valued and understood.

Employers that don’t make an effort to ensure hardworking employees receive recognition may face negative consequences. Indeed warns that a high turnover rate is a sure sign your workers feel undervalued. However, exit interviews may not reveal this, as employees might not always be candid. What’s more, once employees start quitting, workloads may increase for the remaining workers, causing employee morale to plummet. Ideally, your company will address the problem before it reaches this level. An employee recognition and reward program can help establish a positive company culture in which workers feel appreciated and are less likely to resign from their roles.

What is an employee recognition program?

An employee reward or recognition program is a formal way employers acknowledge their employees’ hard work and contributions to the company.

Examples of Employee Recognition Programs

Employee recognition programs can take many forms. The following are some of the most common:

  • Anniversary-Based Awards: Many employers honor employees for their years of service. They may not recognize employees’ achievements every single year, instead just focusing on the milestone years. For example, an employer may provide a reward for five, 10, 20, 30 and 40 years of employment. This is a good way of showing appreciation for employees who have been loyal to your company over the years and who have become an integral part of the corporate culture. It also gives employees who have not been around for as long something to look forward to.
  • Achievement-Based Awards: Some employers provide awards based on goals. For example, salespeople may receive a reward if they meet a specific sales amount. This is a good way to reward your most deserving employees.
  • Competition-Based Awards: Instead of only setting company-wide goals, employees can compete against each other to reach individual goals or metrics. For example, the company may give a reward to its top-performing employee.
  • Employee-of-the-Month/Year Awards: Some employers honor a different employee every month or year. This can be a good way of making sure the company recognizes different employees rather than always recognizing the same high-achievers.

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How to Show Recognition

There are many ways to show recognition. Employers can use a combination of the following:

  • Gifts: Everyone likes receiving gifts. Tangible rewards may make a stronger impact than recognition alone.
  • Bonuses: Employees work to earn a living – more money is always welcome. A bonus is a solid way of showing appreciation.
  • Cards and Certificates: A handwritten card or certificate is especially effective when combined with a gift or bonus. It can be a good way to personalize the reward and voice how much you appreciate your workers.
  • Displays: This method is especially common when used in conjunction with an employee-of-the-month or-year program. Create an area where you display a photograph of the employee you are honoring.
  • Public Praise: Leverage company platforms like websites, newsletters or social media to publicly commend individual employees. This can also be a good way to raise awareness of your company.
  • Team Rewards: In some cases, it may be appropriate to reward an entire team. You could, for example, treat the team to a catered meal to show your appreciation.

Pitfalls to Avoid in Your Employee Recognition Program

Your employee recognition program should boost employee morale, encourage engagement and increase retention. However, if you’re not careful, it could end up doing more harm than good. Avoid the following mistakes:

  • Leaving people out. If you repeatedly recognize the same employees and ignore the quiet but reliable workers, you may brew discontent.
  • Providing insulting rewards. Imagine you’ve worked at a company for 30 years. When you arrive at work on your 30-year work anniversary, you see a gift on your desk. You’re pleased that your employer remembered and excited to find out what you’ve received. You open it up and see… a mug. Small gifts for big achievements can be insulting. In fact, in some cases, employers may be better off giving nothing.
  • Scaling back rewards. Employees notice the rewards they and other employees have received. If the rewards start becoming smaller, they may be insulted.
  • Not providing the rewards promised. According to CBS News, a Hooters restaurant in Florida promised the waitresses that whoever sold the most beer in one month would win a new Toyota. When Jodee Berry won, she was informed that she actually won a toy Yoda. Unamused, she filed a lawsuit, eventually settling for enough to buy the car she was promised. Don’t make the same mistake. When you promise employees rewards and they work hard to earn those rewards, they will understandably be upset if you do not deliver. This can have a negative impact on morale – in fact, as the toy Yoda incident shows, it could even lead to a lawsuit.
  • Not focusing on the right accomplishments. Your employee rewards program should be in line with your company’s goals and values. For example, if you care most about high-quality customer service, a suitable reward program could be one focused on positive reviews from customers. A reward program that recognizes people who never take sick days may be a bad idea because it could encourage people to show up sick (something customers won’t appreciate) and could even lead to claims of discrimination against people with health issues.

Starting Your Employee Recognition Program

Employee recognition programs don’t need to be complicated, but you do need to put some thought into them.

  • Take stock of the programs you already have and determine how you could improve them, including what new programs you should add.
  • Set your budget. Once you know how much you can spend, determine the best way to allocate the funds.
  • Establish your conditions. Determine how employees can earn rewards and recognition.
  • Double-check for compliance. Make sure your program doesn’t break any anti-discrimination rules or other regulations.

Employee recognition and rewards programs can play a vital role in a company’s employment strategies, but they’re also one more thing HR teams need to juggle. At Higginbotham, our team can help take some of the work off your plate through our employee benefits and HR consulting services. Talk to a member of our team today.

Not sure where to start? Talk to someone who wants to listen.

A great plan starts with a conversation. Let’s talk about what you need.

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