6 Best Practices for Employee Rewards and Recognition Programs

Do you work as an HR leader for a global company?

As an HR leader, think of a time when you recognized your employees in a way that they felt appreciated?

We understand that if you are responsible for planning and implementing a global rewards and recognition (R&R) program, it can be challenging to get it right the first time.

Many HR leaders agree that designing a global employee reward and recognition program can be challenging. Using a one-size-fits-all approach to global R&R programs might lead to an epic fail; therefore, it's best to understand the ways you can improve your chances of success.

In this blog, we will explore the best practices for employee rewards and recognition programs and provide practical ideas for designing one.

Best practices to consider when designing a global employee rewards and recognition program

The following are some employee rewards and recognition program best practices to consider:

1. Determine your recognition strategy

One of the first steps is drafting your employee recognition strategy. This entails the following:

Get your executives to understand the business impact and sponsor the employee recognition program.
Budgeting for the financial, human, or other resources needed to execute the plan.
Establishing guidelines that describe the assessment standards, the qualities and behaviours that deserve recognition, the recognition program's structure, the frequency of rewards, and the type of rewards (such as birthdays, work anniversaries, weddings, certifications, or special events).
Communicating the recognition guidelines to employees so that they are aware of their expectations of them.

It is also crucial to align the recognition program with your company's vision, values, and objectives to achieve success.

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Research by Bersin & Associates found that "only about 60 percent of organizations tie their recognition programs to business goals".

Lastly, ensure that the program is achievable, timely, relevant to your employees, and measurable.

2. Get everyone on board

You will need to involve the leaders, managers, and employees in the recognition program. Leaders play a pivotal role in shaping a company's culture, and as such, they have a responsibility to reinforce behaviours that reflect the company's values.

Leaders need to set the tone for the rest of the organization by demonstrating those behaviours that deserve recognition and participating in the recognition programs.

Also, since managers will vary by cultural backgrounds, you must train them to use the recognition program effectively and consistently.

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According to SHRM, "managers must be able to respond to nuances in communication styles, as well as deal with different expectations that employees have of their leaders across national cultures."

Leaders and managers play a crucial role in the success of a global recognition program.

Lastly, it is essential to involve your employees in designing and implementing the recognition program. Since recognition is targeted at retaining and motivating employees, find out what is important to them and give them a choice—some employees may prefer private recognition while others may want public recognition.

Some employees may choose to be rewarded with an experience, while others may select cash or other gifts.

3. Practice multidirectional recognition

As discussed above, a popular type of recognition structure is the manager-employee, where recognition comes only from the top. However, popularity does not necessarily make it a best practice.

It is important to allow recognition to come from any direction—from managers, peers, or direct reports. If the company also allows external parties such as customers or business partners to reward employees, they need to establish those guidelines for employees.

4. Choose a global recognition platform

A significant challenge for HR leaders is finding ways to motivate and retain talent in a scalable manner. It is not advisable to assume that your international workforce will be motivated by the same incentives. As a global company, you will need a recognition platform that all your employees can access across your different offices. The platform should offer customized and culturally-relevant rewards for employees in every geography.

According to a Deloitte article, today's employees want personalized, flexible, and customized recognition.

Therefore, when choosing a reward and recognition platform, ensure that the provider has global suppliers and support centers to help deliver rewards to employees in a frictionless manner.

5. Gamify the recognition program

Gamification offers several benefits, such as active participation and competition. By gamifying your recognition program, you motivate employees through points, badges, or leaderboards, to improve their performance and outcomes.

Based on findings from a gamification expert, Toby Beresford, companies can design a gamification program to drive the right behaviours.

With recognition programs, companies can practice gamification to encourage people to "win" something for themselves through their contributions to the company.

6. Evaluate and monitor program metrics

The best way to track the business impact of a specific employee recognition program is by measuring key metrics such as return on investment (ROI), retention, employee engagement, productivity, and participation.

As a strategic HR leader, it is important to collect feedback about the program, determine if the company met its recognition objectives, and show the company the program's business impact, successes or failures, and areas for improvement.

Types of employee recognition and its structures

As an extension to the best practices shared above, here are some of the structures typically used in most employee recognition programs worldwide that can give you an idea of what might work best for your organization:

1. Manager-employee recognition

Also known as the traditional or top-down employee recognition, the manager-employee is a popular method many companies use.

Here, a supervisor evaluates an employee's performance during a formal performance review process, which sometimes occurs once a year.

For many employees, the formality and timing of the process cause some form of trepidation because it's usually a win-or-lose outcome, and here's why:

If the reviews are positive, the employee might get a pay raise, promotion, or award. However, if the reviews are negative, the employee might get demoted or lose their job.

Research has shown that most employees do not believe their managers know how to recognize them.

Therefore, the manager-employee structure is often viewed as less motivating for employees and political since it rarely reaches the "quiet but critical high-performers" in the organization.

2. Peer-to-peer recognition

In a peer-to-peer recognition structure, employees are recognized by those at the same level or on the same team. This type of recognition is often less formal than the manager-employee structure and allows employees to give their peers more immediate feedback.

Peer-to-peer recognition feels less like a performance review and more like an organic expression of gratitude.

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According to the 2018 survey conducted by the Society of Human Resource Management (SHRM) in collaboration with Globoforce, organizations that use peer recognition reported a positive impact on the organization; however, it is more effective when the feedback is ongoing throughout the year.

The downside of this structure is that employees may give their friends favourable reviews instead of focusing on their work-related value.

3. Team-based recognition

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According to the 2019 Deloitte Global Human Capital Trends report, team-based organizations are a more effective model for operating in today's dynamic and unpredictable business environments.

When employees work as a team, they assist each other in reaching organizational goals. Therefore, the team-based recognition structure allows a company to recognize and reward the team members' overall performance and collective contributions.

This structure motivates employees to cooperate since the focus is on team output, not individual output. However, this team-based structure can create an environment where some team members slack in contributions, leaving the high-performers to do most of the work.

4. Instant recognition

Instant recognition is any form of recognition that is given on the spot. Therefore, this recognition structure is also known as On-the-Spot recognition or Spot Bonus. According to the World at Work, a spot bonus is an informal cash reward delivered "on the spot" to employees. They are used to motivate employees in a timely and cost-efficient way.

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Reports have shown that there is a generational preference for instant recognition, 80 percent of millennials prefer on-the-spot recognition over formal reviews.

It is estimated that by 2025, 75 percent of the global workforce will be millennials. This means that organizations can expect a continuous increase in the popularity of instant recognition by the millennial workforce.