6 Steps to Create Employee Recognition Programs

According to Gallup, employee recognition is the top reason that keeps employees happy at work. Among employees who have great recognition experiences, 72% say that performance on "little things" is commonly recognized at their organization. Additionally, a Boston Consulting Group study highlights that recognition in the workforce is the number one reason employees are happy at work.

Take this company as an example,

Tech giant Cisco, ranked 18th on the 2020 Forbes list of World's Best Employers, prioritizes employee well-being. With a global workforce of nearly 76,000, Cisco offered its employees mental health days in 2020, along with a global peer-to-peer recognition program, paid birthdays off, and discount programs. Notably, Cisco has been recognized as the #1 best workplace in the U.S. for three years in a row.

Cisco, a successful company with revenue of $1.27 billion, shows how happy employees can lead to a growing business. They have a really high employee retention rate of 76%.

Referencing the leading companies, this blog will showcase how to create a successful recognition program. It will guide you through the steps of creating an effective employee recognition program for your organization, and more.

What are employee recognition programs?

Employee recognition programs are structured initiatives designed to acknowledge and reward the contributions and achievements of employees within an organization.

These programs are essential in cultivating a positive workplace culture, enhancing employee morale, and boosting overall engagement. In an era where talent retention is critical, effective recognition strategies can significantly impact employee satisfaction and organizational success.

The primary goal of employee recognition programs is to publicly appreciate outstanding performance, thereby motivating employees to maintain high standards of work. If done well, employee recognition programs can help an organization:

Increase employee motivation,
Improve job satisfaction
Heighten the employee morale
Strengthen employee engagement

Take Deloitte for example.

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Deloitte has been recognized as a great place to work for 23 years straight! They're currently ranked 24th on the Fortune 100 Best Companies to Work For list in the United States.

This ranking is based on employee surveys that measure how much employees trust the company, feel like they can reach their full potential, and experience the company's values in their daily work.

The survey also considers opportunities for employees to contribute new ideas and the effectiveness of their leaders.

The psychological importance of employee recognition program

Employee recognition is vital for organizational success. Understanding the psychology behind it is crucial for maximizing its benefits.

Motivate employees to excel in their roles.
Enhance employee productivity and overall performance.
Increase retention rates while reducing turnover.
Foster a positive workplace culture and improve employee well-being.

To grasp the impact of recognition on employees, we must first explore why people seek it. Maslow's Hierarchy of Needs provides a useful framework for this. This psychological theory, developed by Abraham Maslow, offers insights into human motivation and can be applied to enhance workplace recognition strategies.

Maslow's Hierarchy of Needs is a psychological theory proposed by Abraham Maslow in 1943, often depicted as a pyramid with five levels of needs arranged in a hierarchical order.

This theory is more than just a staple of psychology classes; it’s a valuable framework that can be applied to enhance employee recognition programs in the workplace.

Each level of Maslow's hierarchy can be applied to address employee needs and foster growth.

Physiological needs: A comfortable work environment with adequate amenities is fundamental. Providing essential physical comforts allows employees to concentrate on their tasks without distractions.
Safety needs: Employees require a secure and stable work environment. Clear expectations, open communication, and financial stability contribute to fulfilling these needs.
Social needs: Cultivating a supportive and inclusive workplace culture is crucial. Encouraging teamwork, collaboration, and a sense of belonging helps employees feel valued and connected.
Esteem needs: Recognizing and appreciating employees' contributions is essential. Offering constructive feedback and opportunities for achievement boosts self-esteem and motivation.
Self-actualization: Providing opportunities for professional growth, challenging projects, and innovation supports employees in reaching their full potential.

Maslow's theory, while not specifically focused on the workplace, offers valuable insights into employee motivation. Recognition, a key component of esteem needs, is crucial for fostering a positive work environment. Let’s quantify the significance of employee recognition programs.

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A statistical study of employee recognition program:

- Research by Oxford University's Saïd Business School found that happy employees are 13% more productive than unhappy workers.

- Moreover, Bersin by Deloitte research indicates that 83% of organizations suffer from a deficit in recognition, and only 17% of employees believe their managers know how to recognize them well.

- For instance, a study by the SHRM found that companies spending approximately 1% of payroll on recognition are 79% more likely to see better financial results.

Case Study

Following we have examined how these Fortune 500 companies created employee recognition programs that put them in the ‘great place to work’ list.

1. Southwest Airlines

Southwest Airlines, the industry leader in low-cost travel, has once again secured a coveted spot on Forbes' 2021 list of America's Best Employers. This is a testament to their unwavering commitment to employee well-being, which rivals their dedication to customer satisfaction.

Southwest fosters a culture of appreciation through their innovative SWAG (Southwest Airlines Gratitude) program. This peer-to-peer recognition system empowers employees to acknowledge and reward each other's contributions using redeemable points.

The program offers a diverse range of rewards, including travel incentives through Rapid Rewards points, guest passes, merchandise, and even gift cards and Visa debit cards. This flexibility allows employees to choose rewards that resonate most with them. Furthermore, the program incentivizes saving with a monthly prize drawing for accumulated points and eliminates the stress of expiration dates.

By prioritizing employee recognition through SWAG, Southwest Airlines cultivates a positive and engaging work environment, solidifying their position as a top employer.

2. Norton Healthcare makes record with 123,633 recognitions exchanged among colleagues

Norton Healthcare, a leader in the healthcare industry, prioritizes employee well-being and fosters a culture of appreciation, as evidenced by their ranking at No. 10 in the 2021 Healthiest 100 Workplaces in America list.

Their "N Recognition of You" program exemplifies this commitment. This comprehensive initiative celebrates all aspects of employee life, acknowledging both small wins and significant achievements. In 2018 alone, a remarkable 123,633 recognitions were exchanged amongst colleagues.

Norton Healthcare further demonstrates its dedication to employees through annual celebrations. They host luncheons and banquets specifically recognizing employee service milestones, solidifying their commitment to a long-term and rewarding work environment.

How to build an employee recognition program

Here is how to build an employee recognition program:

1. Align recognition with company goals and values

Successful recognition programs should directly reflect the company’s core values and objectives.

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For instance, a major U.S. financial services company revamped its recognition strategy to emphasize behaviors that supported its mission, resulting in a 31% reduction in employee turnover and saving approximately $10.4 million in turnover costs within the first year.

2. Incorporate diverse recognition tactics

Utilizing a variety of recognition methods can cater to different employee preferences. Google, for example, employs a “no name program” that allows executives to recognize teams with incentives like team celebrations or trips. This not only fosters teamwork but also enhances group bonding, which is essential for innovation and collaboration.

3. Encourage peer-to-peer recognition

Peer recognition can significantly enhance workplace morale. Implementing systems like Zappos' peer-to-peer recognition, where employees can award each other bonuses, has proven effective.

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Companies that encourage peer recognition often see increased employee engagement, with highly engaged teams demonstrating 21% greater profitability compared to disengaged teams.

4. Regular and timely recognition

Recognition should not be a one-off event but rather a consistent practice. Regular acknowledgment of employees’ efforts can lead to a more motivated workforce.

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Gallup found that 15–30-minute weekly meetings focused on recognition between managers and employees are the most effective for developing high-performance relationships.

5. Use a mix of monetary and non-monetary rewards

While cash bonuses are common, they can sometimes be perceived as transactional. Instead, companies should consider a mix of rewards, including personalized gifts, experiences, and public recognition.

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For example, a points-based system that allows employees to choose their rewards can be more impactful.

6. Measure and adapt the program

To ensure the effectiveness of the recognition program, it is essential to measure its impact through employee engagement surveys and performance metrics. This allows organizations to adapt their strategies based on employee feedback and changing needs.

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According to the survey by Forbes, approximately 36% of employees who leave a job within six months cite a lack of recognition as a reason for their departure.

Run successful employee recognition programs with Empuls, a holistic employee recognition software

Empower your team and foster a positive work environment with Empuls - the ultimate employee recognition program!

Foster a culture of peer-to-peer recognition: Encourage a culture of appreciation with Empuls' peer recognition software. Our platform enables candid, social, and fun recognition, fostering camaraderie and teamwork among your employees.
Holistic recognition approach: Empuls covers all your employee recognition needs, from value badges and spot awards to approval-based and performance-based recognition. Our platform ensures every aspect of your team's achievements is celebrated.
Leverage data-driven insights: Gain valuable insights into employee engagement and performance with Empuls' detailed analytics. Our data-driven approach helps you tailor your recognition efforts for maximum impact, aligning them with your organization's goals and objectives.
Secure and user-friendly platform: Empuls prioritizes security while providing a seamless user experience. Our platform adheres to global standards, including WCAG, SOC II, ISO 27001, CCPA, HIPAA, and GDPR, ensuring the safety of your data. With hassle-free implementation and management, you can focus on building a culture of recognition and appreciation.

Don’t miss the opportunity to run successful employee recognition programs and enhance your workforce's performance with Empuls. Schedule a Demo now!

Conclusion

Creating a successful employee recognition program involves a strategic approach that includes understanding employee preferences, aligning recognition with company values, encouraging regular acknowledgment, and utilizing both peer and management recognition tactics.

By fostering a culture of appreciation, organizations can significantly enhance employee engagement, satisfaction, and retention. To streamline this process and maximize the impact of your recognition efforts, consider leveraging Empuls.

With its comprehensive employee recognition software, Empuls helps automate and personalize recognition, ensuring that every achievement is celebrated effectively.