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What is an employee rewards and recognition program?
An employee rewards and recognition program is a system through which the achievements and actions of employees are recognized and rewarded within a company. Recognition is often given on a platform that is shared with internal employees, with points redeemable for rewards accompanying each recognition. The purpose of an employee rewards program is to boost employee morale, improve performance and retain talent.
Employee recognition has a significant impact on key business metrics like engagement, productivity, and retention. Creating an impactful employee recognition and reward program is within reach for every organization, but it requires the right knowledge, planning, and resources.
What is the purpose of an employee rewards and recognition program?
The purpose of an employee rewards and recognition program is to acknowledge, celebrate, and amplify employee achievements and accomplishments among their colleagues and peers. Employees can be recognized through social recognitions or by being awarded points that ladder back to desired behaviors. The points awarded to employees may be redeemed by the employee for rewards like gift cards, merchandise, or experiences.
Examples of employee rewards and recognition programs
- Celebrating employee work anniversaries
- Hosting employee appreciation events
- Events in which employees and teams are recognized for achievements
- Years of service awards
- Weekly or month employee spotlights
Understanding employee rewards and recognition
Recognition and rewards might sound similar, but there are important differences between them. Recognition encompasses both social and monetary recognition, while rewards typically only refer to monetary recognition. Let’s look at these two types of recognition in more detail:
Social recognition
Social recognition can take the form of a quick shout-out during a company meeting, a personalized message of thanks from your manager, or even a digital badge that commends specific qualities or actions. It’s a great way to validate and encourage behaviors that align with your company culture. When social recognition is a frequent occurrence, team members feel proud, more involved, and eager to recognize their fellow employees in turn.
When you are putting together your social recognition plan, make sure that it includes opportunities for peer-to-peer recognition. Impactful, effective recognition doesn’t always have to come from the top. Recognition is most powerful when it comes from both peers and leaders. Make sure that your employee recognition platform allows any employee to easily show recognition whenever and wherever they prefer. An inclusive program that supports peer-to-peer recognition empowers every team member to be a recognition champion.
Monetary recognition
Monetary recognition includes salary increases, bonuses, travel, and gift cards. Rewards like these make employees feel appreciated for the work they do each day. Personalizing these rewards to suit the recipient boosts the impact even further, but engaging in a search for the perfect gift each time your organization wants to tangibly recognize an employee is impractical. And it doesn’t allow all team members to actively participate in the rewards experience.
To resolve this dilemma, adopt an employee recognition solution that supports points-based rewards. Employers provide a set number of points to each employee every week, month, or quarter. Employees then give these points to colleagues, together with social recognition, and team members can redeem them for rewards they choose from a wide-ranging catalog. Personal rewards employees want, versus pre-selected, one-size-fits-all gifts, make a points-based reward system an easy choice.
What is the best reward for employee recognition?
The best reward for employee recognition is a points-based system that empowers employees to choose personalized rewards such as gift cards, merchandise, or memorable experiences. This approach ensures that recognition is not only meaningful but also tailored to each individual’s preferences and achievements.
By offering diverse and appealing rewards through a points-based system, companies not only recognize individual contributions but also cultivate a culture where appreciation is meaningful and memorable. This approach not only boosts morale but also reinforces a positive work environment where employees feel valued and motivated to excel. After all, when recognition feels personal and rewarding, everyone wins.
What are the benefits of implementing an employee rewards and recognition program?
The benefits of an employee rewards and recognition program include:
- Increased employee engagement
We know that employee recognition is a top driver of engagement, and that when you use a points-based rewards system to tie recognition to desired behaviors, you improve engagement as well as; - Clear corporate culture
What gets recognized gets repeated, so by creating a culture of recognition, you perpetuate the positive cycle of employee engagement. - Improved employee retention
When employees are more engaged, they are more content at work. For employers, this translates to less employee turnover, which has significant time and cost savings. - A sense of belonging
Feeling as though you belong in your workplace is incredibly valuable. Rewarding and recognizing employees shows them that they’re part of the organization’s culture and helps them feel welcomed, known, included, supported, and connected. - Better connection to team members
When team members express their genuine appreciation for one another, they grow closer. Points-based rewards and recognition programs make it easy for managers and employees to send and share recognitions.
Reward and recognition ROI statistics
Employee recognition is the number one driver of engagement, and a recognition and reward program is the surest route to boosting employee engagement and retention. These are a few powerful statistics on the importance of recognition and rewards from the 2024 State of Recognition report:
- Employees who are recognized at least monthly are 45% more engaged at work 35% of employees that receive regular recognition from a manager are less likely to leave their job in the next year
- Companies with peer recognition platforms are 37% more likely to say their strategies drive business results compared to those without
- Recognition programs that drive business results are 26% more likely to focus on high frequency, low-monetary recognition
- Social (non-monetary) recognition can make up 60-70% of employee recognition and still drive business results
- 96% of effective rewards and recognition programs align their recognition categories to company values
- Annual years-of-service awards vs. milestone awards lead to 50% higher employee retention
Designing an employee rewards and recognition program
To start realizing the benefits of a well-designed recognition and rewards program at your organization, follow these three best practices:
1. Recognize employees frequently
To get the most out of your reward and recognition program, you need to make sure employees receive recognition on a regular basis. Frequent recognition builds a strong culture of appreciation, has a stronger, longer-lasting impact on morale, and increases the use of your recognition program. Every time organizations double the number of recognitions in their company, they can expect an overall engagement increase of 5%. Implement an easy-to-use employee recognition platform to help get all team members involved with providing recognition on a daily basis.
2. Link recognition to specific actions
What gets recognized gets repeated, so clearly linking recognition to positive behavior will encourage employees to double-down on actions you want to see more of. Ninety-two percent of employees agree that when they are recognized for a specific action, they are more likely to repeat that action. This means that employers can use recognition programs to highlight behaviors they want to emphasize and encourage in line with their company’s mission.
3. Solicit and act on feedback
Developing a successful recognition and rewards program is not a one-time project. It’s essential to continuously collect feedback on your employee recognition program, preferably using tools like pulse surveys and always-on, intelligent feedback channels like AI-powered HR chatbots. Employee feedback shows how employees honestly feel about your recognition and reward program and reveals new approaches to make your program more effective.
To get the most out of the feedback you collect, you must measure and act on it. Guided by an employee engagement platform, managers can address issues collaboratively with their teams. Feedback from smaller groups can be used to test and tweak new employee recognition initiatives, ensuring sustainable success when the time comes for larger rollouts and resulting in a flexible recognition and rewards program that meets your employees’ needs.
Ramp up your employee rewards and recognition program today
Employee recognition is a powerful tool that significantly improves engagement, productivity, and retention. A well-designed points-based system ensures employees feel valued and motivated, which in turn strengthens the corporate culture. Continuously seeking and acting on feedback helps organizations refine and enhance their recognition strategies to meet evolving needs.
The best reward and recognition programs are built on modern, mobile-friendly platforms like Achievers Recognize, which fosters a better culture through fun social recognition and personalized, points-based rewards. It integrates with Achievers Listen to amplify employee voices and streamline feedback action. Plus, the Achievers Reward Marketplace lets team members redeem points for rewards from 2,500 brands in 150 countries, offering something for everyone.
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