Employee Recognition & Reward Programs: Best Practices

Want to implement effective employee recognition programs? Take time to be thoughtful and strategic in your approach.

Research consistently shows a positive, progressive linkage between employee recognition, employee engagement and company performance. The trouble is that the concept of “recognition” is nebulous. Many organizations don’t understand that the “how” of employee recognition is every bit as important as the decision to do it.

QIC has decades of experience designing and implementing employee recognition programs that meet stated objectives. While every organization and program is different, applying some basic fundamentals will help ensure success. Here are some of our proven “best practices” that help ensure you get the most out of your employee recognition program — and your employees.

Best Practices and Tips for Effective Employee Recognition

1. Understand the problem at hand.

Don’t implement an employee recognition program out of desperation. If performance in your organization is below par, it might not be for lack of employee motivation. Employees may not have the skills required to succeed, or the tools necessary to perform to the highest standards — and if these issues aren’t addressed, a recognition program won’t help. Conduct a gap analysis of your organization’s goals versus performance to unpeel the onion and better understand the root causes of the shortcomings. Confirm that the issues at hand are problems of motivation and not something else.

2. Consider the culture.

To be effective, employee recognition programs need to align with the way participants work, how they think, and what they value. Recognition programs should also reinforce the culture and values of the organization. This “cultural personality” drives everything from the types of rewards offered to the communication and branding of the program itself. A youthful startup will typically require a different approach than a blue-chip firm of tenured employees. Organizations with large numbers of remote workers will need to ensure everyone feels included. Consider demographics, employees’ use of personal technology, and even personality types (for example, are your colleagues a skeptical bunch, or do they readily embrace new ideas?) These are factors to think about when selecting rewards and designing the program mechanics. You might even poll employees to find out what kinds of reward items they would like to see offered. Their responses might surprise you.

3. Define the word “employee.”

It’s critical to clearly define your program audience. Are part timers and contract employees eligible? What happens to the employee’s program “earnings” (i.e., points) when they leave the company? Be very specific about these details from the beginning to avoid complaints or possible legal consequences.

4. Check the water level.

Is your workforce already drowning in a sea of company programs and initiatives? People can only digest so many slogans and “branded” communications. Figure out how an employee recognition program can complement rather than compete with other programs within your organization. For example, if your company is focused on charitable causes and giving, tie this participation to the employee recognition program. You don’t want your motivation effort to fall flat from corporate campaign fatigue.

Also, discourage local offices from doing their own forms of recognition that are separate from the companywide employee recognition program. It’s OK for different locations to have unique goals specific to their operations, but any recognition should be tied into the “branded” corporate program or else it will cause confusion and splintering of results.

5. Rally senior management.

Employee recognition programs run the risk of being viewed as “fluff” among senior leadership, even though you know otherwise. Get senior managers on board by presenting employee recognition not as a cost, but an investment that will increase corporate performance. Show the research that demonstrates the link between motivation and performance. The employee recognition program should be presented as a necessary part of the infrastructure, to be managed by someone with the authority to make decisions, allocate resources and adjust the program as circumstances change. Without the support of a top executive or senior manager, an employee recognition program has little chance of success.

6. Show participants how the program creates value.

Incentives stimulate employee engagement and performance by placing increased value on work tasks. With something at stake, people become more committed to meeting goals. For the program to succeed, everything about it — the objectives, reward offerings, the communication of messages and program support — needs to convey to participants that “this is a valuable program and worth the effort.”

7. Make program goals attainable and short-term.

To sustain enthusiasm among participants, set attainable benchmarks that are possible to achieve within a relatively short period of time. Make it possible to accrue points on a relatively frequent basis (say monthly or quarterly), and offer a range of rewards at lower and higher point values so that employees can enjoy results more quickly instead of having to wait a whole year or more to redeem points.

8. Keep it simple.

The program should have well-defined rules that are clearly communicated, with no ambiguity. Be very explicit about the desired behaviors and activities being awarded, and how rewards are earned. That said, the program should also be simple in its design — along the lines of “Do X, get Y.” Participation will suffer if participants have to follow complicated instructions and formulas.

9. Communicate, communicate, communicate.

You’ll probably have a huge internal media “blitz” when the employee recognition program rolls out. Include some brief training of how the program works — perhaps introduce the basics of the program Web site over a “lunch and learn” session. Over time, keep the momentum going, with continual communications and messages that not only promote the program, but also report on progress toward key performance indicators and other “value” messages. Communication should also be a component of recognizing employees; people feel more valued and appreciated when their efforts are commended publicly throughout the organization.

Communication is particularly important when employees work from home, or are otherwise isolated (e.g., truck drivers, maintenance crews, etc.). Regular communication about program goals and corporate messages helps ensure that the behavior of remote employees closely aligns with that of in-office staff.

To reinforce the objectives of the program, hold managers accountable for presenting results at departmental staff meetings. Show employees how their behaviors directly impact the goals.

10. Know the tax implications of employee recognition.

Because certain employee rewards can be taxed, familiarize yourself with local and federal laws concerning these forms of compensation. Consult your tax advisor and/or IRS Publication 15-A: Employer’s Supplemental Tax Guide.

11. Continually measure and refine.

Most recognition and incentive programs run on technology platforms that enable program managers to generate a large amount of data and insight on how the program is working (i.e., the types of employee behaviors being awarded). Another way to measure program effectiveness is through surveys. Consider polling participants for feedback about how the program worked to motivate (or not motivate) better performance. Conduct separate surveys for managers to gauge whether they see perceptible changes in their workforce. Use feedback to adjust and tweak components of the program as necessary.