A Useful Guide To Drive Effective Employee Recognition

MGM Grand¹, a Las Vegas hospitality company, realized the need to enhance employee engagement by following a value-driven employee recognition program. In its approach, the company successfully streamed employee satisfaction surveys, which showed an increase from 87.5% in 2004 to 90.3% in 2005 and a turnover rate of 11.4%.

The above-mentioned case study testifies how well recognition plays a role in employee retention and helps scale employee productivity.

To keep employees contented, one needs to understand how to determine the ROI of employee recognition. This blog will answer this question along with a few interesting case studies that give you an overview of recognition.

¿Qué es el reconocimiento de los empleados?

Giving special attention or acknowledging employee actions, behaviour, efforts, or performance is called employee recognition. According to Oxford University, 92%² of workers are likelier to repeat an action once recognition is received for it.

Recognition can come from formal and informal programs, supporting business strategy by encouraging specific behaviours, like extraordinary accomplishments, that drive organizational success.

This acknowledgement of employee contributions typically happens right after the achievement, based on predefined goals or performance standards the employee is expected to meet.

As per research by Gitnux, 40% of Americans feel that recognition can drive employees to work productively.

Why is employee recognition important?

Employee recognition is more than just a pat on the back. It's a powerful tool that can boost your company's success in surprising ways.

Think about it: from a young age, we all crave acknowledgement. That gold star from our teacher, a high five from a teammate – these small moments fuel our motivation and make us feel valued. The same holds true in the workplace. When employees feel appreciated for their contributions, big or small, it unlocks a treasure trove of benefits for them and the company.

Here's why recognizing your employees is a win-win for everyone.

Boosts morale: Recognizing employees for their hard work and achievements enhances their morale and job satisfaction, leading to a more positive and productive workplace.
Increases engagement: When employees feel appreciated, they are more likely to be engaged in their work, contributing to higher levels of commitment and enthusiasm.
Enhances performance: Acknowledging employees' contributions can motivate them to maintain or improve their performance, fostering a culture of excellence.
Reduces turnover: Employees who feel valued and recognized are less likely to leave the organization, helping to reduce turnover and retain top talent.
Promotes a positive culture: Regular recognition helps build a supportive and appreciative workplace culture, attracting new talent and strengthening team cohesion.
Aligns with organizational goals: Recognition programs that reinforce specific behaviours and achievements align employees' efforts with the organization's strategic goals, driving overall success.

What is the difference between employee recognition and appreciation?

Employee appreciation and recognition are important for fostering a positive and productive work environment, but they target different aspects of the employee experience. Here's a breakdown to help you understand the key distinctions:

1. Focus

Appreciation: This type of recognition focuses on the individual and their inherent value as a person and team member. It acknowledges their positive traits, contributions to the team atmosphere, or simply being a great colleague.
Recognition: This type of recognition focuses on the employee's actions and achievements. It highlights specific accomplishments, such as exceeding expectations or completing milestones.

2. Emotion

Appreciation: Evokes a more personal and heartfelt response. It fosters a sense of belonging and value as a human being, not just a worker.
Recognition: Leans towards a more professional and achievement-oriented response. It reinforces the employee's skills and contributions to the company's goals.

3. Examples

Appreciation: Thanking an employee for their positive attitude, willingness to help others, or their unique perspective.
Recognition: A bonus for exceeding a sales target, a company announcement for completing a complex project, or a promotion for consistently demonstrating strong leadership.

Why do employee recognition and appreciation matter?

While they target different aspects, appreciation and recognition work together to create a well-rounded employee experience.

Appreciation builds loyalty and a sense of belonging. It shows employees they are valued for who they are, not just what they do. This fosters a more positive and supportive work environment.
Recognition fuels motivation and the drive to excel. It highlights specific achievements and reinforces the importance of an employee's contributions, encouraging them to continue striving for excellence.

How to build a successful employee recognition program?

The ways to build a successful employee recognition program are

Step 1: Define your "why"

Before diving in, take a step back and ask yourself: what are your goals for this program? Is it to improve retention, celebrate achievements, or foster a more positive work environment? Having a clear purpose will guide your program's design and ensure it aligns with your company culture.

Step 2: Know your audience

A one-size-fits-all approach won't cut it. Consider your workforce demographics and preferences. What kind of recognition resonates with your team? Public praise? Personalized notes? Gift cards? Understanding these preferences allows you to tailor the program for maximum impact.

Step 3: Make it meaningful

Recognition goes beyond a generic "good job." Highlight specific achievements, mention how their work impacted the team, or express your appreciation for their dedication. The more specific you are, the more meaningful the recognition becomes.

Step 4: Frequency matters

Don't wait for a yearly review to dole out praise! Recognition should be frequent and ongoing. A quick shout-out in a team meeting, a handwritten thank you note, or a peer-to-peer award can make a big difference.

Step 5: Variety is the spice of recognition

While a heartfelt "thank you" is always appreciated, mix up your recognition methods! Offer a variety of rewards, from public acknowledgements to gift cards or extra paid time off. This caters to different preferences and keeps the program exciting.

Step 6: Make it easy and accessible

A program that's cumbersome or confusing won't get used. Make recognition easy to give and receive. Consider online platforms, nomination forms, or even suggestion boxes where employees can recommend their peers for recognition.

Step 7: Get leaders on board

Managerial buy-in is crucial for program success. Train managers on the importance of recognition and empower them to actively participate. Their recognition holds significant weight and sets the tone for the team.

Step 8: Celebrate big wins

Don't forget to acknowledge major milestones and achievements! Company-wide announcements, team lunches, or special awards programs can show your appreciation for exceptional contributions and inspire others.

Step 9: Track and adapt

Your program is a living document! Monitor usage and employee feedback, and adjust as needed. Are certain rewards more popular than others? Is participation lagging? Use this data to improve and keep the program relevant continuously.

Step 10: Make it fun!

Recognition shouldn't feel like a chore. Inject some fun into the program! Run contests, create recognition boards, or gamify the experience with points and badges. A little lightheartedness can go a long way in boosting engagement.

How do we measure the ROI of employee recognition?

The ways to measure the ROI of employee recognition are

1. Identify objectives and metrics

Set clear objectives: Define what you want to achieve with your recognition program (e.g., increased employee engagement, reduced turnover, improved performance).
Choose key metrics: Select measurable indicators such as employee engagement scores, turnover rates, productivity levels, and customer satisfaction.

2. Calculate costs

Program costs: Include expenses for recognition events, awards, bonuses, and any software or tools used for managing the program.
Administrative costs: Consider the time and resources spent on planning, implementing, and maintaining the recognition program.

3. Measure benefits

Employee engagement: Use surveys and feedback tools to assess changes in employee engagement and satisfaction before and after implementing the recognition program.
Turnover rates: Track employee turnover rates and compare them to industry benchmarks or historical data within the company.
Productivity Levels: Measure productivity improvements through performance metrics and outputs.

4. Calculate ROI

Quantify benefits: Translate the measured benefits into monetary values. For example, calculate the cost savings from reduced turnover by considering recruitment and training expenses.
Compare costs and benefits: Subtract the total costs of the recognition program from the total quantified benefits.

5. Analyze intangible benefits

Employee morale: While harder to quantify, improved morale can lead to a more positive work environment and better teamwork.
Brand reputation: Enhanced employee satisfaction can improve your company’s reputation as an employer, attracting better talent.

6. 6. Mejora continua

Regular monitoring: Monitor the program’s impact and adjust strategies as needed.
Feedback loops: Gather regular feedback from employees to understand the recognition program's effectiveness and areas for improvement.

Examples of 6 employee recognition ideas

Employee recognition programs are crucial for boosting morale, increasing engagement, and reducing turnover.

Here are 6 employee recognition programs, each with unique features and benefits:

1. Peer-to-peer recognition programs

Example: Empuls
Description: Allows employees to recognize each other’s efforts and achievements. It encourages a culture of appreciation and team support.
Benefits: Promotes a positive work environment, fosters teamwork, and enhances employee engagement.

2. Milestone and service awards

Example: Service anniversary awards
Description: Celebrates employees’ work anniversaries and milestones with gifts, certificates, or public acknowledgement.
Benefits: Recognizes loyalty and long-term commitment, boosts employee retention, and creates a sense of belonging.

3. Quarter programs

Example: Employee of the Month
Description: Highlights outstanding employees monthly or quarterly, often with a public announcement and a reward.
Benefits: Encourages healthy competition, motivates employees to excel, and showcases exemplary behaviour.

4. Programas de incentivos

Example: Sales incentive programs
Description: Offers rewards such as bonuses, trips, or gifts for achieving specific targets or goals.
Benefits: Drives performance, aligns employee efforts with company goals, and enhances productivity.

5. Wellness and wellbeing programs

Example: Wellness challenges
Description: Recognizes employees who participate in wellness activities or achieve health-related goals with rewards or public acknowledgement.
Benefits: Promotes a healthy work-life balance, reduces stress, and enhances employee well-being.

6. Team-based recognition programs

Example: Team achievement awards
Description: Recognizes and rewards entire teams for achieving goals, completing projects, or demonstrating exceptional collaboration.
Benefits: Promotes teamwork, strengthens team dynamics, and recognizes collective efforts.

Casos prácticos

1. E. ON

E. ON, one of Europe’s biggest operators of energy networks and infrastructure. It required an online recognition solution that delivers thank-you messages to employees from colleagues and customers.

Problem

Experienced a fair share of negative publicity due to poor customer service, impacting their employee morale.
Barriers between senior managers and employees.

Solución

Created an informal culture of recognition.
Made good use of a cost-effective product with a high level of employee engagement and credibility.

Resultados:

Key people engagement stats have improved from 8-18% in 12 months;
76% of employees have received recognition to date, and 53% have been sent

2. Telefonica

Telefonica, a leading telecommunications company identified the need for a user-centric web app which helps in employee recognition.

Problem

Misalignment in their corporate strategy.

Solución:

Developed a user-centric web app for tablets and smartphones, which helped employees upload pictures and videos and comment/like/share each other’s profiles.
The peer-to-peer recognition web app is integrated with an internal social network.

Resultado:

200 active users after its first week.
4,279 awards handed out since the launch of the app;
Increased workforce motivation and satisfaction
Improved peer-to-peer relationships.

How does Empuls help in employee recognition?

Before getting into the benefits of Empuls in employee recognition, here’s the impact of using the platform.

1. 67% improvement in eNPS score post implementation of its recognition program.

2. 90% of employees feel recognized and valued.

1. Multiple award types

From spot awards and value badges to peer-to-peer recognition, there’s plenty to look forward to.

2. Automation

Automate rewards seamlessly with intuitive workflows. Nominate approvers for your recognition programs and set up recognition triggers for milestones and special events.

3. Rewards

Access instant redemption via the built-in rewards store and gain visibility into your reward points and budget utilization.

4. Digital employee recognition tools

Use Empuls user-friendly digital employee recognition tools, like wishboards, to drive appreciation via the social intranet. Get introduced to AI-powered messages, nudges, and engagement scores, and stay ahead of your peers on the leaderboard.

Conclusión

Let’s summarize the blog by explaining how well you can leverage employee recognition programs.

Start by giving your employees more than just recognition. For example, you can motivate them to upskill themselves through courses by creating gamification-driven recognition, where completing a course will earn them points that can be redeemed for gift cards.

Constant recognition will motivate your employees, resulting in higher employee satisfaction, productivity, and performance.

So, what are you waiting for?

Create a recognition-focused company culture with Empuls!

Citas

1. Human Capital Institute. (2009). The value and ROI in employee Recognition: linking recognition to improved job performance and increased business value — the current state and future needs. https://theirf.org/wp-content/uploads/2010/01/the-value-and-roi-of-employee-recognition.pdf

2. Jones, D. M., Esq. (2024, March 27). The 48 employee recognition statistics to take note of in 2024. SSR. https://www.selectsoftwarereviews.com/blog/employee-recognition-statistics