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Benefits of employee recognition programs and ideas to try

Employee recognition programs can lead to happier workers, which helps companies overall. Learn some benefits of employee recognition programs as well as potential pitfalls.

Employees feeling underappreciated at work can negatively affect a company's overall employee experience. Companies that commit to even seemingly small gestures as part of an employee recognition program can improve in areas such as retention rates and organizational culture.

Employee recognition programs can help improve retention and prevent employee burnout, according to "Unleashing the Human Element at Work: Transforming Workplaces Through Recognition," a 2022 study by Gallup, a research and advisory firm located in Washington, D.C, and Workhuman, a human capital management software company located in Framingham, Mass. The study found that employees are 56% less likely to be investigating other jobs if their company is succeeding at employee recognition and 73% less likely to "always" or "very often" experience burnout. However, only 23% of employees strongly agreed that they are receiving the proper recognition for their achievements.

In addition to more common employee recognition practices, such as honoring workplace anniversaries, HR leaders should also consider ideas that might not first appear to fall under the category of employee recognition. One example of this might be encouraging workers to pursue learning and development opportunities.

Here's more about how employee recognition programs can benefit companies, as well as some employee recognition ideas to consider.

Benefits of employee recognition programs

Employee recognition programs lead to happier employees. Here are a few specific ways employee recognition programs can help organizations.

Improved recruitment and engagement

Workers who feel recognized by their managers and leaders often share that information with their professional and personal networks, which can help with recruitment.

Ellyn Maese, senior research consultant, GallupEllyn Maese

Employees who are receiving recognition from their companies are four times more likely to recommend their employer to friends and family, according to the Gallup and Workhuman study.

"These employees become good brand ambassadors for the organization," said Ellyn Maese, senior research consultant at Gallup.

The study further showed that employees who regularly receive recognition are also four times as likely to be engaged in their work.

Improved employee well-being

Receiving recognition at work can help improve employee well-being in multiple ways.

In addition to preventing employee burnout, employee recognition programs help companies avoid the potential consequences of employee burnout, including decreased employee productivity, absenteeism and safety incidents, Maese said.

Employee recognition programs often help enhance employee well-being because the programs typically focus on employees as people with outside interests and achievements, not just who they are at work.

Gallup defines employee recognition as praising, acknowledging or expressing gratitude for who people are or what they do, Maese said. This definition encompasses recognizing not only employees' achievements and work milestones but also their identity outside of work.

One way an organization can celebrate an employee's personal achievement is by sending out a companywide email congratulating the employee for major milestones, such as finishing a marathon over the weekend.

Improved culture

Employee recognition programs can improve company culture because employees who see their managers and company leaders recognizing workers' achievements will likely do the same.

"Top-down recognition only goes so far," Maese noted.

A true culture of recognition throughout an entire organization is one in which co-workers are celebrating each other's achievements as well, Maese said. Creating that space for public recognition in emails, chats, online platforms and even dedicated meetings and events can facilitate this employee-to-employee recognition.

Types of employee recognition

Employee recognition can range from small gestures to bigger celebrations. Here are some ways HR leaders can get started with employee recognition or add new initiatives to their company's current program.

Daily recognition

Companies should continually celebrate smaller achievements rather than waiting for big ones, such as yearly anniversaries.

Maese suggested the following potential ideas for daily employee recognition:

  • Managers and company higher-ups can use email or chat platforms like Slack or Teams to highlight employees' contributions.
  • Team leaders can set aside time during regular meetings to thank individual employees for contributions to specific projects or tasks.
  • HR leaders can schedule recurring company meetings dedicated exclusively to employee recognition.

Learning and development

Employee recognition shouldn't be limited to gifts for anniversaries or project contributions.

Trent Henry, global vice chair of talent, EY
Trent Henry

Offering education and development opportunities is another valuable way to recognize employees, said Trent Henry, global vice chair of talent at EY, a professional services firm located in London. By doing so, companies are demonstrating their willingness to invest in their employees' futures.

EY offers an MBA and two masters degrees to employees at no cost in association with Hult International Business School, Henry said. The degree programs are available to all employees, regardless of their rank within the organization, tenure or location.

Employment anniversaries

Recognizing employee anniversaries might seem like a small gesture, but HR leaders shouldn't underestimate its importance.

Karen Young, president of the Harrisburg, Pa.-based consultancy HR Resolutions, still remembers her first anniversary at her first HR job. She received a pink carnation and a handwritten note from the company president thanking her for her work.

"I still get goosebumps talking about it," Young said.

The gesture cost the company next to nothing, but it sent a powerful message of support, Young said.

Employee birthday celebrations

Celebrating employee birthdays is a thoughtful gesture and easy to carry out.

Karen Young, president, HR ResolutionsKaren Young

HR staff can recognize an employee birthday through a post on the company's internal communications platform, Young said. To simplify the task, they can even post a list of employee birthdays for the month.

Or, if enough employees are working in the office, HR staff can order a cake each month and hold a small celebration, she said.

Recognizing new parents

Celebrating new arrivals is a great way to recognize employees' lives outside of work, and employees will likely remember the company's gesture made during a busy time in their personal lives.

One of Young's clients, for example, is a construction company that sends a construction-themed baby book to the newborn when an employee welcomes a new family addition.

Company celebrations

Company celebrations are a good way to recognize employees because these celebrations give workers a chance to relax. Company leaders can push the recognition even further by taking a moment at the beginning of the celebration to thank employees for their hard work.

One potential idea for a fun company event could be a cookout during which the leaders and managers serve the employees food, Young said.

Potential employee recognition pitfalls

HR leaders should be careful to avoid some common employee recognition mistakes. One consideration is whether the methods of rewarding employees are meaningful.

"A true recognition experience that's going to create impact goes further than just handing out a gift card or putting up a picture of the employee of the month," Maese said.

A true recognition experience that's going to create impact goes further than just handing out a gift card or putting up a picture of the employee of the month.
Ellyn MaeseSenior research consultant, Gallup

HR leaders could potentially poll employees to see the type of rewards they'd like to receive. For example, workers might in fact enjoy receiving a gift card if they get to choose its source, such as a favorite coffee shop.

In addition, employee recognition can also quickly become out of sight and out of mind if employees are hybrid or remote.

In a hybrid work environment, company leaders might fail to celebrate remote employees, Maese said. But organizations shouldn't just focus on in-person employee celebrations.

"Recognition is something that can easily be done virtually or online," Maese said. "[Doing so] can help to cut down on some of those [remote employee] feelings of being disconnected."

HR leaders should also consider who the company is recognizing -- and who is getting passed over. Lack of recognition for employees of color, for instance, could become an equity issue.

Employee recognition, or the lack thereof, can significantly affect how employees view their company's stance on equity, Maese said.

"[Employees] know that things like [employee recognition] directly correlate, in a lot of cases, to who gets promotions and who is valued," she said.

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