Any good manager will tell you their employees are the lifeblood of their organization. They’re what makes the machine of business, the interface between the customers and the company, and the face of the product. Yet employee retention can be a problem. The top reason people leave their jobs? It’s not necessarily the lack of sales incentives; it’s not feeling appreciated.
A recent report by Workhuman, a company specializing in workplace culture and employee perks and recognition programs, found that almost half of the managers they surveyed cited employee retention as a top concern. In a press release on the report, the company stated:
“In the report, ‘Designing Work Cultures for the Human Era,’ 47% of HR leaders cite employee retention and turnover as their top workforce management challenge, the third consecutive year this challenge has topped the list.”
That same report discovered that a workplace is more likely to have a more supportive environment and ultimately employee loyalty, especially when it comes to employee feedback, when what they describe as “human centered” approaches are used. That includes ongoing peer feedback, performance reviews, and recognition incentives tied to employees’ core values.
In other words, the report found that employees were happier when they got recognized for the work they put in.
In fact, a good employee recognition program can mean 50% higher productivity and a 20% increase in business outcomes. It boosts morale, which can lead to better customer service and increased customer satisfaction. The logic is pretty straightforward: happier employees make the entire company run better. Sounds like a result anyone would want, right? Well, read on.
Here, we’ll go over just what employee recognition means, how you can set up an employee recognition program if you don’t already have one, and give some examples of excellent employee recognition gift ideas that have shown fantastic results.
So, first thing’s first.
What Is Employee Recognition, Really?
Employee recognition is all about acknowledging the hard work your employees put in every day to keep customers satisfied and things running the way that they should be. It strives to create a connection between your company and employees that’s authentic and makes them feel both seen and respected. The best employee recognition programs achieve that goal while supporting the work employees do and staying true to a company’s core values.
We aren’t talking about tiny plastic trophies or gift cards. We’re talking real, meaningful rewards and incentives provided to employees that will encourage them to do the best work they can. Experiences that will help them love where they work.
- 89% of employers surveyed by Workhuman said they felt an employee recognition program improved their employees’ experience in the workplace.
- 85% surveyed said it helped with workplace culture.
- 84% said it helped with customer engagement.
- Teams that are more highly engaged show 21% higher profitability according to a report by Gallup.
- They also show 41% less absenteeism and 59% less turnover than companies with less employee engagement.
- Employees who feel heard are almost five times more likely to want to do their best work.
- Disengaged employees cost companies $450-550 billion in lost productivity, and 70% of employees in the United States are disengaged from their work.
Employee engagement isn’t just about making people feel good. It’s also about giving them a sense of purpose connected to where they work. That means providing clear goals on what should be achieved in the workplace, as well as the means to achieve them. From the Gallup report:
“Organizations …improve business performance when they treat employees as stakeholders of their own future and the company’s future. This means focusing on concrete performance management activities …getting people what they need to do their work, providing development and promoting positive coworker relationships.”
There are generally two different types of employee recognition: top-down recognition and peer recognition. Both have their ideal times and places, and both are important. The more prevalent and traditional form of recognition is the top-down variety. A boss will congratulate someone at a team meeting for making a crucial sale or exceeding an important goal. That can have the emotional benefit of knowing someone in management sees and appreciates that work, and the monetary one of a raise, bonus, or other incentive like travel. Recognition from management tends to encompass the big-picture objectives rather than day-to-day accomplishments.
Peer recognition is also key, and many modern employee recognition systems make use of it in creative ways. That can be points systems, peer awards, or experiences. Peer recognition can fill in the gaps when management can’t always see and recognize every contribution that everyone is making to the company. If a coworker notices, they can let someone know that their hard work is appreciated by the people they work with every day.
How To Start Your Own Employee Recognition Program
Implementing an employee recognition program doesn’t have to be complicated or expensive. All it takes to start doing it at your company is a few simple steps:
- Figure out why you want to start an employee recognition program.
- Figure out the eligibility requirements for the reward you decide on.
- Determine how you’ll select the person to be awarded.
- Select the award.
- Announce the program, and kick it into gear!
Figure Out The “Why”
Apart from the obvious reason of making your employees feel appreciated, why do you want to start your program? What would you like to happen as a result? Raised morale? Improved employee engagement? Improved customer satisfaction? Maybe you want to highlight employees who you believe exemplify the company’s values, thereby encouraging others to do the same. Whatever your reason, zero in on that and build your program around it. Once you’ve figured that out, let your employees know the criteria so everyone is on the same page.
Once you have your “why,” you’re ready to choose the people who’ll help you implement the program. These should be either managers or employees who are enthusiastic about the program and want it to succeed. They’ll ideally have a track record of involvement with the company and be positioned as leaders who can get others excited about taking part.
Determine Who’s Eligible
Are full time and part time employees going to be eligible for rewards? What about interns? Do you want to start separate programs for full-time and part-time staff? Figure out which employees can participate in the program and be eligible for the rewards. If they have to have been with the company a certain amount of years to win an award—say for a lifetime achievement award—then be sure everyone knows. It’s also a good idea to determine how often an employee can win an award and whether people involved in selecting award recipients are allowed to be eligible themselves.
Determine How Winners Get Selected
Figure out how candidates for recognition will be found. You could set up a points system and monitor it to see who racks up the most. You could let employees nominate each other or managers nominate employees. Make sure it’s clear who can nominate who for an award if you choose to set up your system this way. A stock nomination form is a simple way to let people select coworkers for recognition and tell you exactly why that person should be nominated.
Figure out when awards or incentives will be given out: once every quarter? Once a month? Find out what works best for you and your employees, and make sure it’s on a regular schedule. 96% of employees believe empathy is the best way for a company to retain people long term, and that can be accomplished through regular acknowledgment.
Select the Award You’ll Give
This is where you can get really creative and have a bit of fun. You can offer rewards and incentives ranging from trips to experiences like skydiving to good old cash. Companies today are starting to favor letting winners pick their own rewards from a range of options so they get what they really want instead of a gift card they’re unlikely to use. The options for employee recognition gifts are only limited by your imagination and your budget. Whatever you choose, the more personal the reward is to the employee who wins it, the better.
Announce the Program
Make sure everyone at the company or on your team knows about the program so they can jump on board. Announce it at a place and time where everyone is already gathered together, like the next big meeting. Sending out a group email is a good way to make sure everyone knows and to bring anyone who wasn’t there into the loop. Make sure everyone knows when the first nomination period is so they can get involved if they’d like to participate.
Employee Recognition Program Examples
There are all sorts of creative and interesting ways you can offer incentives and rewards to your employees beyond the traditional trophy or certificate. We’ll take a look at some of them here and how they’re changing the way we think about employee recognition rewards.
Software company Kazoo specializes in “people management” tools and have developed a recognition and rewards program for their employees inspired by social media. A digital feed lets everyone see when another employee is recognized or nominated for the work they do. Each time someone gets recognized, they earn points which can then be used to purchase rewards. Kazoo employees can cash in points to donate to a charity close to their hearts or a gift card to someplace they like. They can even buy points to send to other people at the company, which happens often.
Snappy has created an inventory of employee recognition gifts for award recipients to choose from. They have an entire gift-giving platform, highly personalized, offering a lot more than the average. International trips and local cooking classes are just a few examples of the gifts employees can receive through Snappy’s platform, and gifts are given out via digital scratch-off cards.
Like Snappy, Blueboard has a curated employee reward program, but they focus on experiences rather than material things. From something as simple as a spa day to once-in-a-lifetime events like running with the bulls in Pamplona, their rewards are highly personalized to the employee. They get to indulge in a passion they’ve always wanted to explore or check something off their bucket list, and at the end of the day they have their company to thank for it.
Perhaps not the first company that comes to mind when you think of innovation, Yankee Candle nonetheless considers itself the home of the “world’s best-loved employees.” As the company grew into the household name it is today, managers found it difficult to individually recognize employees for their work. Oftentimes, people would get recognition for accomplishments or hitting important milestones in the mail, which felt impersonal. To solve that problem, Yankee came up with an employee recognition toolkit that it gave out to each of its managers. That let the company scale and still pay attention to its employees’ individual contributions with a human touch.
This ad agency rewards employees by giving them time to devote to their passions. The company developed what it calls the 60/60 Program, which lets employees devote two hours of company time per week to work on a passion project. The project doesn’t have to be related to ongoing work and gives employees a chance to delve into something fulfilling.
This video game company has a completely unique take on employee recognition gifts. They reward people who perform well with a trophy, shout-out on social networks, and prime parking real-estate, but for work anniversaries, they go a step beyond. The company immortalizes them in an oil painting. Other anniversary gifts include custom-made samurai swords. This is smart because it gives employees a personal reward they’re unlikely to ever forget, and does it right at the time when people are statistically most likely to change jobs: their one-year anniversary (and each anniversary beyond that). If commissioning personal oil paintings sounds a bit too costly, consider an alternative in the same vein: Two Rivers Marketing gives hand-drawn caricatures of employees for their work anniversaries. It isn’t as expensive, but it still gives people a personal gift they’ll remember (and maybe chuckle at) for a while.
This company takes a fun, active approach to employee recognition by getting everyone involved in things that celebrate the company culture. HR director Pat Gerhart described some examples in an interview, all of which involve the company product—craft beer—in some way:
“Is there snow? Let’s do a snowshoe hike with a keg of beer and burritos at the shelter bonfire. It’s a nice summer evening? Let’s sponsor co-owners for a local run/walk and have fun together with a beer and sharing stories after the event.”
You don’t have to go as all-out as these companies have on the employee recognition front if it isn’t in the budget, but maybe you can gain inspiration from their approach. All of the above companies make sure their employees feel seen and important, authentically recognizing their contributions without being cheesy or insincere.
Some focus on experiences rather than cash bonuses, or fun group activities that fold in the company product. If you go that route, letting the person choose their experience makes the reward that much sweeter. Experiment, get feedback from your employees, and see what would work the best for them when putting together your program.
Additional Employee Recognition Tips For Managers
Now that we’ve covered how to put your rewards program together, we’ll list a few additional tips that managers would do well to keep in mind. When developing and implementing your ideas, consider the following:
- Make rewards specific to the action. Take it a step further than a generic thank-you card, email, or form letter. Make sure when you recognize that person, you address what they did and why it was an important contribution. Did a programmer find a bug in the system and patch it, saving the company thousands in potential repairs or losses? Recognize them for saving the day.
- Be prompt. Recognizing an employee’s accomplishment late loses its impact. Things can get busy at a company, especially a large one, but a halfhearted thank you weeks or months down the line could feel insulting.
- Personalize it. Make sure the employee knows you know who they are, what they did, and why it was such a big help.
- Be consistent. Once you’ve developed your program and started recognizing employee’s accomplishments in new and innovative ways, keep it up! Creating a culture of recognition where people are praised for the good work they do will boost morale across the board.
- Measure the results. You can’t determine the impact of your program if you don’t check your results. Maybe you started a points-based program that seemed like a great idea at the time, but it backfired when some departments got more recognition than others. Maybe some employees would prefer cash bonuses instead of experiential rewards or vice versa. Always monitor your rewards program to make sure that employees are satisfied with it and actively participating. If they are, great! If they aren’t, it’s probably a sign that something is wrong. Reach out to them and see what can be fixed. Not many companies check to see if employees are happy with their recognition program, so doing this will automatically put you ahead of the pack.
It may seem like an employee recognition program won’t be worth the money you’re putting into it. On the surface it can look like yet another expense that won’t yield much of a return, and business owners generally want to keep costs as low as possible. But recognizing your people and their accomplishments is always worth it, and you don’t have to break the bank to make it work. It pays dividends far beyond the bottom line, which increase with employee morale. You’ll reap the intangible yet powerful benefit of a workplace culture where people feel appreciated and actually want to work.
A company we mentioned earlier, Kazoo, put it this way in their recently published report on employee recognition. In the report, they frame the issue by what you stand to lose from dissatisfied employees:
“To truly understand the ROI of a recognition and rewards program, we’ll also need to look at the price of not having one: lower engagement, less productivity, and a higher chance of employees walking out the door.”
Do you want quality people walking out the door, or fighting to get in?