How to Measure Employee Recognition Program Success Effectively in 2025

Remember Dan Price, the CEO of Gravity Payments, who shot to fame for taking a pay cut while increasing his employees’ wages? He’s back on Twitter, asking people what made them quit their jobs. The overwhelming response points to the same root cause—recognition, or the lack of it.

It’s no surprise. The success of your business depends heavily on your people, which directly ties into the strength of your employee rewards and recognition program. And if you’re serious about improving employee recognition ROI, tracking outcomes is key.

Multiple studies highlight the importance of having a structured rewards and recognition strategy—and the need for a &R digital platform that not only drives recognition but delivers measurable insights. Still, knowing how to measure employee recognition is where the real challenge begins.

• Is your recognition program worth the investment?
• What are the dividends on your employee engagement initiatives (are the benefits>costs)?
• Can you quantify the return on your program investment?

It’s time to crunch the numbers, which is no mean feat given that things like recognition and engagement are primarily intangible.

Quantifying your employee recognition program ROI

Now that we’ve established that recognition ROI can be measured in quantifiable terms to gauge the program’s success, it’s time to ask the burning question:

How do you measure the success of your employee recognition programs, determine their efficacy, and justify their continuation?

For starters, it's helpful to invest in a robust R&R platform or tool that provides detailed analytics and data-driven insights about your recognition program. These metrics help calculate the ROI accurately. Best practices also suggest that the recognition program budget should be set at 1% of the payroll.

Think of your recognition program like a game of Code Karts, where you have to code the car (employee) to the finish line through problem-solving, sequencing, and logic. Your recognition program also requires a unique combination of productivity, engagement, and rewards. KPIs and impact are the analytics used to measure and calculate your return on investment (ROI).

How to set KPIs to measure employee recognition programs?

Define a set of program-specific business KPIs to measure the efficiency of your employee recognition program.

1. Financial

Although indirectly tied to the recognition program, these are long-term, tangible metrics that can be analyzed and verified to yield definite business results when calculating the recognition ROI. They include:

• Employee attendance: Any increase or decrease in attendance rates can be attributed to the recognition program.
• Turnover: The lower the employee turnover, the more effective the recognition program.
• Productivity: Increased productivity translates to a higher return on investment (ROI) from your program.
• Profitability: Profitability is directly proportional to sales targets and can help determine the program's ROI.
• Referrals/Brand Advocacy: The number of employee referrals and how your employees become brand advocates on job boards and social media determines the success or failure of your program. 

2. Engagement

These are short-term metrics and are directly tied to the recognition program. In other words, the more engaged the employees are with the program, the higher the dividend. They include:

• Program participation (adoption and engagement)
• Employee survey results are a great measure of program effectiveness
• Peer-to-peer recognition and manager feedback are good indicators, too
• Employee satisfaction scores
• Reduction in HR resources

Tangible impacts

Here’s a step-by-step process to calculate the return on investment from your recognition and rewards program.

An effective recognition program has a positive impact on productivity while reducing turnover, absenteeism, and onboarding costs.

• Total cost savings = Total Productivity Gain + Turnover Savings + Absenteeism Savings + Onboarding Savings
• Total productivity gain = # of Employees x Avg. Annual Salary x % Productivity Increase
• Turnover savings = (# Employees x Turnover Rate) x (Salary x Turnover Cost ) x Turnover Reduction
• Absenteeism savings = # of Employees x (Salary / # of Work Days) x Reduced Days of Absenteeism
• Onboarding savings = (Training Period x Salary) Savings % x # Employees x (Growth + Turnover)

Formula for measuring ‘investment’

• Investment = Cost of Rewards + Platform Fees
• Cost of rewards = # of Employees x 1% x Avg. Annual Salary
• Platform fees = Total Employee Count x Platform Fee/Month/Employee x 12

Intangible impacts

When calculating the ROI of your employee recognition programs, you must consider two other areas apart from the business impact. These are intangible because you cannot enumerate them. However, together with the business impact, they can help you visualize your recognition program's ROI entirely.

1. Experience impact

A great recognition program generates positive experiences throughout the employee's lifecycle, from onboarding to exit.

Your recognition program experience affects employee motivation, satisfaction, and well-being and is directly proportional to their productivity. This, combined with their interactions with the program, adoption, participation, usage, and satisfaction, can help you determine the overall experience impact on your recognition ROI. To put it simply, the better the recognition experience, the higher the ROI.

2. Culture impact

According to Forbes, a thriving workplace culture should be built on your company’s values. Conversely, your program should recognize individuals who display those values in their daily interactions with your company.

Given the intimate connection between culture and recognition, you need to quantify the adoption of your values-based, purpose-driven recognition program. Analyze which values have high versus low adoption, and you will get an accurate picture of the impact of recognition on your culture.

Key employee recognition metrics to measure the success of your recognition program

Measuring the success of your recognition program isn’t about collecting every possible data point. It’s about focusing on the right ones—the ones that show how recognition is actually shaping culture, motivation, and connection across your workforce.

Here are the key employee recognition metrics to keep an eye on:

1. Participation rate

Start by looking at how many employees are using the program. Are people regularly giving and receiving recognition? A high participation rate means the program feels accessible and relevant to everyone, not just something driven by HR.

If participation is low, it could be a sign that the program needs better visibility, manager involvement, or easier access.

2. Frequency of recognition

Recognition should be consistent, not a once-a-quarter thing. Track how often employees are recognized. Are they being appreciated in real time, or only during performance reviews and work anniversaries?

The more frequent the recognition, the stronger the message that effort is valued every day, not just on milestones.

3. Recognition type and source

It’s helpful to break recognition down by source. How much of it is coming from managers, and how much is peer-to-peer? Peer recognition often reflects a healthy team culture where employees feel empowered to celebrate one another.

If most recognition is top-down, you should encourage more peer-led appreciation.

4. Recognition equity

Recognition shouldn’t just go to the loudest voices or the most visible roles. Track who’s being recognized and who isn’t. Are specific teams, functions, or employee levels being consistently left out?

This metric can help reveal unconscious bias and inform the design of more inclusive recognition campaigns.

5. Impact on engagement and morale

Recognition programs are most successful when they have a positive impact on how people feel about their work. Use engagement surveys or short pulse polls to gather feedback. Ask simple questions like “Do you feel valued at work?” or “Does recognition feel meaningful here?”

Platforms like Empuls can make this process easy with built-in surveys and sentiment analysis.

6. Retention and performance trends

While recognition isn’t the only factor that influences retention, it can play a huge role. Look for patterns in turnover rates and compare them with recognition activity. Are your most appreciated employees more likely to stay with the company? Are high performers getting regular recognition?

How to act on the data you collect from the employee recognition program

Collecting data is only half the job. The real impact comes when you use it to make your recognition program better, more inclusive, more consistent, and more meaningful for your employees.

Here’s how to turn insights into action:

1. Spot what’s working and double down

If the data shows that specific departments have high recognition rates and positive feedback, identify what they are doing right. Is it strong manager involvement? Peer-led shoutouts? Whatever it is, replicate it across other teams.

Success stories can help you set benchmarks for the rest of the company.

2. Identify and address participation gaps

If recognition isn’t reaching specific teams or roles, that’s a red flag. Use the data to pinpoint where recognition is low—maybe in remote teams, support functions, or frontline roles.

You can then run focused campaigns using tools like Empuls to boost visibility and encourage participation in those pockets.

3. Share results with leadership

Data-backed reports are a great way to keep leadership invested in the program. Show how recognition is linked to engagement, retention, or productivity. Highlight key wins, like a spike in morale after launching a new recognition initiative.

This turns recognition from an HR-driven effort into a business-aligned priority.

4. Use employee feedback to improve the experience

Surveys and feedback scores can tell you whether recognition feels authentic and timely. If employees say recognition feels forced or manager-only, that’s your cue to course-correct.

Try experimenting with different formats—like peer voting, celebration walls, or value-based badges—to make the program feel more organic.

5. Reinforce and celebrate progress

Don’t just track metrics—share them. Celebrate when you hit recognition goals or when engagement scores improve. It reminds everyone why the program exists and encourages ongoing participation.

You can even gamify recognition milestones within platforms like Empuls to maintain momentum.

How Empuls makes measuring employee recognition simple and actionable

When you're figuring out how to measure employee recognition, having the right tool makes all the difference. That’s where Empuls steps in. It doesn’t just help you run a rewards and recognition program—it helps you track its effectiveness with built-in insights that matter.

Here’s how Empuls helps you measure what truly counts:

• Track key recognition metrics: Empuls provides data on participation rates, recognition frequency, and peer-to-peer vs. manager recognition, so you can spot what’s working and what’s not.

• Monitor recognition equity: Easily identify gaps in recognition across teams, departments, and roles to ensure appreciation is inclusive and consistent.
• Understand the impact on engagement: With built-in pulse surveys, you can gauge how recognition influences employee sentiment, morale, and sense of belonging.

• Correlate recognition with performance: Empuls helps you connect the dots between recognition activity and employee productivity, retention, and engagement.
• Generate easy-to-share reports: Share recognition data with HR and leadership to showcase how your program is supporting broader culture and performance goals.

If you’re serious about improving your culture through appreciation, Empuls gives you the visibility and tools to do it right—backed by real data, not assumptions.

Next steps

You have successfully launched your employee recognition program, identified the KPIs, and measured your recognition program’s success against defined business goals.

What’s next?

Analyze the results and turn your insights into a plan of action to improve your program. This should be a recurring process to keep on top of any changes in your employee engagement goals.

If you track the progress and changes to ensure they remain relevant, you will be rewarded with increased ROI from your program.

While a combination of quantitative and qualitative research is ideal for getting a complete picture of your recognition program's ROI, a digital recognition platform with built-in measurement tools takes the burden of calculations off your shoulders.