Stay Up-to-date with Xceleration

Types of Recognition for Employees and Why Incentives Are Effective

two colleagues with thumbs up shaking hands as sign good job scaled

Incentive rewards programs are one of the most common types of recognition for employees, with many employers implementing such programs to motivate workers and increase productivity. However, incentives only work if they’re based on what individual contributors actually want. This means it’s critical for companies to determine the type of program that’s best suited for their specific teams. 

Regardless of the program implemented, studies show that rewards are more important than ever and are a key component of post-COVID-19 performance management strategies. For example, more and more businesses are implementing total rewards packages that include both fixed and variable pay scales, as well as other incentives like recognition programs.

This article defines and discusses different types of recognition for employees, the reasons why they’re successful, and why employees enjoy them.

Types of Recognition for Employees

An employee recognition program is a system that formally acknowledges and rewards employees for a job well done. These programs are much more than just another task on a manager’s to-do list. Recognizing employees needs to be a top priority for every business.

Providing incentives and rewards has a twofold impact: It benefits the employee, individually, while also establishing a positive office culture that encourages increased productivity and creativity.

The Most Common Types of Recognition for Employees

Employee recognition programs come in many forms, and they’re beneficial for companies across all industries as a tool to strengthen manager-employee relations and motivate teams. 

Some of the most popular types of recognition programs include the following:

Team Incentives

Team incentives are great for small business owners or managers. They can be used to motivate teams to work together and collaborate more effectively. Ideally, this type of incentive rewards program should be based on measurable goals like sales, productivity, etc. 

For example, you might challenge your team to collectively meet “X” number of contracts for the quarter in return for a gift, which could be anything from a team day out to gift cards or tickets to an upcoming music event. 

Individual Incentives

Individual incentives are great for recognizing employees who are hardworking, driven, and successful at meeting pre-established goals. This type of reward is often given to merit exceptional effort and/or achievement. An example of an individual incentive is a travel reward for a top-performing sales associate. 

Birthday Recognition

Birthday recognition is becoming one of the more popular forms of employee appreciation. Easy to execute, this makes employees feel special on a day of significance and works to foster the employee-company relationship. 

Examples of birthday recognition include a token reward, a personalized note, a donation to a charity of the employee’s choice, or a simple gift card. In some offices, colleagues take time to decorate the employee’s personal workspace. 

Coffee or Lunch with a Manager

Similar to recognizing a birthday, coffee or lunch with a manager promotes relationship building within the workplace. It also serves as a platform for mentorship and provides both managers and employees with a venue for offering feedback and direction. 

A manager might ask an employee to lunch for demonstrating exceptional leadership or communication skills during a particular project. 

Positive Email Recognition Program

An email is also a useful tool for providing positive feedback to employees, whether it’s a simple thank you or a more creative, personalized e-card. Adding a small gift to the email in the form of a voucher is a way to include a token of appreciation, demonstrating that even small gestures are an effective means of recognition. 

These are just a few examples of recognition programs that can be implemented and tailored to fit the specific needs of an organization. Many of these ideas can be managed in online reward platforms that are created to personalize and expand recognition efforts, encouraging a company culture of positive recognition.

Why Employee Recognition Programs Are Effective

It’s important for team members to feel like they’re making a difference, and recognition shows them that they are. Programs that implement different types of recognition for employees are an effective solution for demonstrating appreciation and doling out incentives. For consideration, here are a few examples of the positive impact of a rewards program.

Employee Recognition Increases Employee Retention 

Studies indicate that 63% of employees recognized by their employer are less likely to look for alternative employment, with employees noting that recognition is not required to be elaborate or formal. Anytime an employee goes above and beyond expectations, their actions and efforts can be recognized.

Employee Recognition Improves Employee Engagement 

According to Gordon Tredgold in an article, in one study “employees were asked if a 5 percent salary bonus, above and beyond performance recognition, or ongoing effort recognition would improve their relationships with their managers. Forty-nine percent answered with ongoing effort recognition.” 

Recognition is the basis for increased and higher-yield output. Again, this provides additional support for the importance of developing a robust rewards strategy that your employees value. 

Employee Recognition Fosters a Spirit of Ambition 

When employees are recognized, they feel a sense of pride. In turn, this recognition then acts as an extra source of motivation. This feeling of accomplishment can push a worker to want to learn an additional skill, which might lead to greater responsibility, a pay raise, or future promotion.

Employee Recognition Improves Relationships with Coworkers

A healthy relationship between coworkers is critical for success, especially when trying to get a team to hit key performance indicators. When teams are recognized for hard work, it serves to bond members under a common objective and shows each coworker that teamwork is appreciated. 

And it’s essential to find ways to recognize teamwork in all manifestations. With many teams now working remotely, companies must continue to reward excellent collaborations. Overcoming the obstacles created by adjusting to remote work should itself be recognized and applauded to show employees that their adaptability is valued. 

Employee Recognition Leads to Better Customer Service

When an employee feels valued, they are more likely to provide exceptional customer service. This, then, can have a compounding effect through repeat business and word-of-mouth growth, two hallmarks of any successful and respected business.

Employee Recognition Leads to Increased Sales

One sign of growth is through increased sales. An incentive program established to recognize and reward top contributors to sales targets is an easy win for any company to achieve. The specific reward can often be tied to the target itself. For example, an agent that books the most timeshare signups can be rewarded with a weeklong trip to a predetermined destination, where a timeshare is the source of accommodation.

Service Milestone Recognition Program

Several types of recognition for employees are predicated on positive performance. Incentive rewards programs are a great way to encourage healthy competition between employees and departments. It can help to create an environment where people strive to be better than they were yesterday.

But not all gifts and rewards need to be attached to business success or a met goal.

Another way to implement a recognition program is to base it on company service milestones, or service anniversaries. This means that employees are recognized for how long they’ve been employed with a company.

When an employee is recognized for tenure and loyalty, the benefit goes beyond what the employee receives. In fact, a hidden benefit tied to service anniversary rewards is the direct positive impact on the employer. Employee retention means less time and money spent hiring and training replacement employees, as well as less loss of productivity while said search and instruction is taking place.

When and Where to Provide Employee Recognition

We’ve covered the how and why to provide recognition to employees, but what about the when and where?  This is equally important to a successful reward program.

Annual Awards Dinner

An annual awards dinner is one way to recognize employees for their hard work and dedication. The opportunity to bond with colleagues promotes healthier dynamics in the office, and the increased comradery can lead to healthy competition, which ultimately improves a business.

Top Performer Rewards Program

An employee-of-the-month program is a cost-effective way to recognize employees. By offering recognition at regular intervals and on a familiar cadence, employers motivate employees to always work hard, as the next award is right around the corner.

Peer Recognition Awards Ceremony

A peer-to-peer recognition program is perhaps one of the most effective programs a company can initiate. Peer-to-peer praise can easily be given daily via message boards or chat platforms. While tangible gifts carry a monetary value that everyone can appreciate, praise and recognition from a colleague is often the most valuable reward an employee can receive in the workplace.  

Good employee relations are the basis for a positive and communicative culture in the office. A combination of peer recognition and tangible gifts to celebrate that recognition is even better.

Sourcing Employee Input on Recognition Programs

Employee buy-in to a recognition program and the reward structure implemented is critical to success. One easy way to involve employees is to give them a say in the type of rewards received. When an employer takes this step, employees feel like their voice is heard and their opinion matters.

Employee opinions can be solicited via a company-wide survey. Or, a launch party could serve as a venue for speaking to team members in person, increasing the human component of the initiative.

Another opportunity to collect employee proposals is during an all-hands meeting, for instance at a goals day. Employees can break out into small groups to brainstorm ideas together, offering suggestions via a comment box or through a manager at the end of a session.

Regardless of the path chosen, open communication and employee participation are the keys to success.

Top Tools for Setting up an Employee Recognition Program

As we’ve seen, recognition in the workplace is beneficial to employees and employers alike. Employees feel valued, leading to improved performance and higher levels of engagement; and employers have teams of happy workers, leading to increased loyalty, a stronger employee culture, and an overall healthier work environment.

There are many ways to set up and involve employees in a recognition and reward program. A few determining factors include the type of business being operated, the roles and functions employees have, what employees are being recognized for, and what size budget is available to fund the program.

When employees are informed of the progress of the program and know what to expect, they’ll be more likely to participate. No matter how great the rewards are, if employees cannot access information easily or do not know where they stand, they will lose interest.

Take Employee Recognition to the Next Level

While many businesses attempt to administer a rewards program internally, they quickly learn offering incentives is easier said than done. Department directors or Human Resources teams are often tasked with the job, however, their time is better spent on business-critical objectives. So, who does that leave to pick a customized collection of rewards, offer solutions when questions arise and keep the program feeling fresh year after year?

Xceleration is a full-service recognition, rewards, and incentives company ready to support any type of program. Designed to be flexible to meet any client’s needs worldwide, our proprietary web-based platform, RewardStation, makes it easy for businesses to administer a robust platform for participants — from developing a recognition strategy from scratch to curating a catalog of rewards and offering high-touch concierge travel. Contact us today to see what we can create and deliver.

Share this post!

Subscribe to get the latest from our blog!

We use cookies to measure our website's performance and enhance your browsing experience. By continuing to browse our site, you agree to our use of cookies, in accordance with our privacy policy.