Building an Employee Recognition Program: 4 Tips for Success

Quick look: 30% of employees who leave their jobs within the first six months say they would have stayed longer if their efforts had been recognized. However, meaningful employee recognition is often more complex than it seems. Here, explore the business advantages of showing appreciation towards your staff, four key strategies for building an effective employee recognition program, and how a professional employer organization (PEO) can help.

The secret to keeping your valuable talent might be simpler than you think: showing genuine appreciation for their contributions.

Research shows that when employees feel their efforts are “meaningfully recognized,” nearly two-thirds are less inclined to look for new job opportunities, and almost 60% are less likely to take a call from a recruiter. Additionally, those who say they never receive recognition are 27% more likely to say they will job hunt.

Carefully crafted employee recognition programs, designed to encourage staff to excel by rewarding them for their dedication, can help achieve this. A successful program sets high behavior standards, provides workers with motivation and feedback, and publicly praises high performers by enabling business leaders, managers, and peers to thank other employees for their efforts and accomplishments.

The advantages of staff recognition

Of course, commemorating hard work is a good thing, but the business advantages associated with staff recognition may surprise you. These benefits include:

• Reduced turnover: Data shows that 30% of workers who left a job within the first six months said being recognized more for their unique contributions could have encouraged them to stay longer.
• More cohesive operations: Having a well-defined employee recognition program, instead of showing appreciation in ad hoc ways, can help organizations:
  • Streamline and trace spending on rewards
  • More easily quantify the return on investment (ROI)
  • Reduce waste and increase security by eliminating one-off gift card purchases
  • Establish a common currency for reward opportunities across all departments
• Increased employee engagement: Public recognition boosts employee morale and encourages staff to connect with coworkers and the company’s values and mission.
• Cost savings and retained knowledge: Employee recognition programs can help organizations retain staff and avoid the hefty cost of replacing a worker and potentially losing institutional knowledge. Administering regular, lower-value rewards may also be less expensive than infrequent, larger ones and more strongly support a culture of gratitude.
• Hiring advantages: Today’s top talent wants to know their hard work won’t go unnoticed. Sharing your employee recognition program with candidates can increase your chances of hiring the best.

Great Place to Work also reports that employees are more than twice as likely to go above and beyond their regular duties when they stand an equal chance of being recognized for their efforts. Further, the same research showed that staff are nearly 70% more likely to put in extra effort if they receive a genuine “thank you” from management.

4 steps to building an employee recognition program

To cultivate meaningful recognition, employers must first take the time to carefully design an impactful plan. From choosing the right rewards to aligning the program to your company’s priorities, here’s how to develop a comprehensive strategy.

1. Determine what employees want

There is no one-size-fits-all reward that will appeal to every employee. Some workers prefer a tangible gift, while others want a public shoutout.

With the right research, business leaders can determine which reward options best match their workforce’s preferences. One way to do so is by administering an employee survey to identify which incentives make the most sense for your organization to distribute.

Some common recognition ideas for staff include the following:

• Years of service award: Celebrating work anniversaries helps tenured employees stay engaged and encourages new hires to remain dedicated to their roles.
• Customer service award: Designed to reward workers in customer service roles when they receive positive customer feedback.
• Employee appreciation events: These can include company-hosted lunches, team outings, annual holiday parties, and more.
• Social media shoutouts: Leadership can encourage staff to praise each other on platforms like LinkedIn, or the company can highlight high performers on its corporate account.
• Employee of the month: Encourage peers or managers to vote for an exemplary employee and explain why they chose that person.
• Peer-to-peer recognition: Enable workers to recognize each other’s accomplishments and contributions in person or via email, your organization’s collaboration tools, or a performance management platform.

2. Align the program with your company’s goals and values

At its core, an employee recognition program rewards staff members who positively impact the business. To do so, the program should revolve around the company’s goals and values and how individuals’ achievements contribute to them.

When introducing the program, business leaders should clearly outline which core values or corporate goals they want to reward. Additionally, the program should be measurable and specific so that the reason recipients were selected and their impact on their team and the organization are well understood. By sharing quantifiable results, the program gains more meaning.

The Society for Human Resource Management (SHRM) suggests creating a written policy, which can be included in an organization’s employee handbook, outlining the program that consists of the:

• Eligibility requirements
• Approval process
• Types of awards that will be provided
• Frequency of award presentations
• Performance goals to be measured
• Thresholds for awards

3. Identify recognition strategies for peers and management

Both peer-to-peer and manager-to-employee recognition strategies should be incorporated into employee recognition programs. Manager-to-employee methods demonstrate that leadership appreciates their staff’s efforts. Additionally, many companies offer peer recognition programs, enabling workers to recognize their teammates for going above and beyond.

Recognition can be given through email, phone or video calls, instant messaging, an employee engagement platform, or shoutouts during meetings.

4. Encourage regular recognition

Thanking employees for their hard work doesn’t make much of an impact if it rarely happens. The more workers are recognized for their efforts, the more likely they are to feel appreciated, engaged, and motivated.

Business leaders should encourage staff to regularly recognize each other’s accomplishments, whether daily, weekly, or monthly. And that regularity can pay off. Gallup highlights that a 15 to 30-minute weekly meeting between managers and their employees, featuring a moment of recognition, is the most effective habit for developing high-performance relationships—surpassing any other leadership activity.

To create a culture of recognition, the employee recognition program should be woven into the organization at every level, from leadership meetings to new hire training sessions.

Saying “thank you” just got easier

Acknowledging your workforce’s efforts may sound simple, but it takes careful planning to reap all the benefits an employee recognition program can provide. And with so many pertinent responsibilities, small business leaders may not have the time to hone their strategies to maximize employee retention, engagement, and attraction rates.

A professional employer organization (PEO) can help. PEOs are a type of human resource (HR) outsourcing provider that offers HR, benefits, and risk and compliance services and aligns small businesses with tools to develop employee recognition programs. For example, ExtensisHR provides:

• Dedicated HR Managers to help develop employee recognition strategies
• Affordable access to 15Five, an industry-leading performance management software that facilitates public and private recognition and 1-on-1 meetings where feedback and acknowledgment can be shared
• On-demand training modules focused on team building, management skills, teamwork strategies, and more

Thoughtfully recognizing your staff’s achievements can encourage them to stay at your company, instill within them a sense of pride, streamline operations, and attract talent to your organization.

When employees feel appreciated, remarkable things can happen. Are you looking to create an employee recognition program or improve an existing one? We’re here to help—learn more about ExtensisHR’s PEO solution, or contact us today.