The Guide to Modern Employee Recognition

What Is Employee Recognition?

What does recognition look like?

At its core, employee recognition is the open acknowledgment and expressed appreciation for employees’ contributions to their organization. 🎉

It could be a high-five for a job well done, a special shout-out during an all-hands meeting, or even a bonus for meeting a monthly goal.

Recognition can take many forms, but whatever your approach, it's one of the most valuable areas a team can focus on. Implementing the right kind of recognition program is a critical factor in giving your business the competitive edge. With that in mind, organizations are increasingly adopting and rethinking recognition programs. They’re powerful, and they can improve employee engagement, reduce turnover, increase productivity, boost morale, and build purpose when used correctly.

Who gives recognition?

Ideally, everyone in an organization should be able to give each other recognition. That said, the most effective source of a particular piece of recognition is based on the situation and circumstance.

Top-down recognition

Recognition is traditionally given in a top-down system, where an employee’s supervisor, manager, or leadership team witnesses and appreciates their contributions.

This is a great model for many reasons: since these leaders are typically in decision-making roles, their recognition often has monetary results, like a raise or promotion. These people are also in the best position to assist employees with their chosen career path or growth plans.

However, giving frequent, real-time, and specific recognition isn't a simple proposition for management. It requires managers to witness, catalog, recognize, and reward countless contributions.

In most cases, there are too many valuable contributions made on a daily basis for a solely top-down recognition approach to be effective. Most leaders just don’t have the bandwidth to keep track of everyone’s hard work. That’s why the most common form of top-down recognition is an employee’s annual review.

Unfortunately, annual reviews can be a significant source of stress and typically only highlight an employee’s largest, most visible contributions. Annual reviews also include suggestions for employees’ areas of improvement, which can distract from praise.

That’s not to say that managers shouldn’t give recognition at all. On the contrary, they definitely should! When it comes to completing big-picture objectives, recognition from higher-ranking leaders can emphasize the magnitude of an employees accomplishment. However, for the day-to-day, it’s a good idea to ask for help from the rest of the team.

Peer recognition

In a peer recognition system, managers as well as other co-workers are all empowered to recognize and reward the contributions of everyone else. It’s easy for managers to congratulate an employee on their general job performance, but their peers are working right beside them, day by day. They're in a much better position to recognize an employee's specific contributions and understand the immediate impact those contributions have.

It's simple. You see a teammate do something valuable, then praise them for it.

We also can’t ignore the benefits of bottom-up recognition. Managers need appreciation, too! Recognition is motivating and insightful for everyone, even those in senior positions. With 360-degree style recognition, everybody in the company has a voice in how they want to express their feedback. Recognizing direct supervisors and leaders for the work they do isn’t brown-nosing––it’s a method of interpersonal communication that benefits everyone involved.

Will recognition work for my team?

Yes! 😁

Every team can benefit from a recognition program.

When you implement one, you give employees a way to celebrate each other's achievements. These interactions build stronger teams, cultivate richer company culture, and motivate employees to do their best work. When executed successfully, recognition provides positive peer influence and communicates the notion that good work is valued by everyone in the company.

Looking at the bottom line, companies that score highest for building a "recognition-rich culture" have 31% lower turnover rates than their peers. What’s more, employees who don’t feel recognized are twice as likely to quit within a year.

After all, being appreciated just feels good. Why? It releases the flow of oxytocin, the chemical our bodies create when we bond with others and feel loved. The TINYpulse Employee Engagement and Organizational Culture Report found that 58% of the happiest employees will recognize and encourage their peers' success when given tools to make it easy.

A recognition-rich culture is a worthy and achievable goal for any organization, in any industry. It benefits the whole team, from the newest hire to the CEO.

The key to success is understanding how employee appreciation works, and how to implement it effectively in your unique environment.

What will it cost?

Most organizations without a formal recognition program are already spending money on recognition. From organizing celebratory lunches to bulk-buying gift cards, the labor and costs associated with “manual” recognition can add up quickly. This method of recognition tends to be sporadic and can be time-consuming for leaders or HR employees to manage.

The budget is usually accounted for—just allocated less effectively under a different name. Also consider who else benefits from recognition. Chances are, the decision-makers for other departments also see the need for recognition and would be willing to join in.

An effective program normally pays for itself and more in the form of increased motivation, productivity, engagement, and retention. In our next section, you’ll learn exactly how recognition has a positive impact on each of these factors.

But why?

Understanding employee recognition is the first step, and in the next chapter, we'll share why employee recognition is important. Read more to learn about the many benefits of employee recognition and how using a recognition program like Bonusly can be an extremely effective way for teams to feel valued, perform better, stay engaged, and more. We invite you to tour the platform and join us for a demo to learn more about how you can start building a recognition-rich organizational culture.

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