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How Employee Recognition Shapes Your Company Culture

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With labor shortage challenges brought on by the COVID-19 pandemic and the Great Resignation, focusing on employee engagement is more important than ever for employers. Many organizations are responding by creating employee recognition strategies to boost morale and increase employee retention.

While this is a positive trend, many companies are so focused on the practical benefits of employee recognition that they’re missing the bigger picture: company culture. That’s right, a good employee recognition program has the power to holistically make your organization a positive place to work. Here’s how.

Transformative Power of Employee Recognition

Employee recognition should be a key aspect of any company’s strategy and values. That’s because recognizing and rewarding employees for their achievements and successes boosts motivation, morale, and satisfaction.

Each of these factors helps to boost employee retention, making it less likely for workers to leave your organization.

However, the effects of an employee recognition program on a company go beyond those benefits. A strong employee recognition program can also provide the foundation for great company culture, shaping it in a way that makes employees excited to work.

If company culture is lagging at your business, here are a few ways boosting employee engagement with rewards can have a positive impact on the workplace.

Individual Fulfillment

When you recognize employees for exceptional performance, you’re creating a cycle of feedback that begins with the individual.

So, whether you’re giving verbal praise or offering a tangible reward, your employees will feel like their work matters and that it is contributing to a greater purpose. That’s the key to creating a strong company culture — making employees feel like they’re a part of something bigger than themselves.

While recognizing employees is a hot topic today, it’s hardly a new concept. Forward-thinking organizations have been doing this for years. A decade ago, a report by Bersin & Associates — a company that offers human capital consulting services — found that engagement was 14% higher in organizations that recognize their employees compared to those that don’t. In this age of Covid, remote work, and other workplace changes, this number has undoubtedly increased.

The same report discusses the psychological elements that relate to employees and their needs on the job. The report talks about Abraham Maslow’s Hierarchy of Needs, which consists of five tiers, illustrated by a pyramid:

  • Physiological (at the bottom)
  • Safety
  • Love/belonging
  • Esteem
  • Self-actualization (at the top)

According to the study, recognition from managers and colleagues can help individuals fulfill their need for love/belonging, while recognition and praise, in general, can help build esteem and confidence.

Once each of these needs reaches fulfillment, an employee can move to the top — the self-actualization level. When employees reach this level, they feel motivated, engaged, and want to advance within the organization.

So, the more your organization fulfills employees’ needs, the more likely they’ll stay and grow within their role. As a result, they’re more likely to share their positivity with others. This, in turn, will create a more positive workplace culture that starts at the bottom level — with the individual.

Peer-to-Peer Fulfillment

By fostering a culture of recognition between employees, you can boost the strength of peer-to-peer relationships.

Being able to recognize their peers in an open way creates a culture of open and supportive communication. This helps to establish trust and transparency among peers as well as in their relationships with managers and leaders.

Meaning and Purpose

A recent report from McKinsey shows that employees want to play a meaningful role in their organization. So, when you’re building employee confidence, helping employees cultivate meaningful relationships with their colleagues, and building trust, you can foster a sense of meaning and purpose within an individual’s work.

As this deeper meaning originates with your organization’s mission and company values, it can have a significant impact on workplace culture.

Related: Personalize Rewards to Strengthen Manager-Employee Relationships

The Bigger Picture

Now that you know how employee recognition can, directly and indirectly, affect company culture, let’s discuss how it can benefit employees in more detail.

  • Increase employee satisfaction: Employee rewards and recognition can play a major role in boosting employee satisfaction. According to one study, 82% of employees reported feeling happier at work when their managers recognize their achievements. And happier employees can make the workplace a better place to be, which boosts morale and company culture.
  • Improve employee retention: Satisfied employees tend to stay at their jobs longer. They also tend to be more engaged and connected to a company’s goals and values.
  • Cultivate a culture of self-improvement: When you’re giving employees regular feedback and recognition, you’re encouraging them to improve their skills and job performance. This helps them grow, experiment, and learn new things.

How to Create a Culture of Recognition

Not sure how to implement an employee rewards program that provides a boost to your company culture?

Follow the practical tips we’ve outlined below.

Zero in on What Makes Work Meaningful

Finding meaning in the workplace differs from company to company. Employee recognition and growth might center around taking risks in one organization, while team spirit might take center stage at another firm.

So, before designing an employee recognition program to boost company culture, determine what makes work meaningful for your organization.

Doing so will help your employees understand how their contribution makes an important difference. And on the flip side, recognizing team members for their efforts can develop a sense of meaning as well.

The more employees feel like their work has meaning, the more likely they are to have a positive attitude and great work performance. Together, these benefits translate to positive work culture. That’s because when employees are happy and fulfilled, this impact can be felt across the entire organization.

Implement Employee Recognition From the Top Down

Top management support and participation are essential to establishing a true recognition culture.

Senior leadership should model the recognition behavior you want to see from employees. This is perhaps the most essential way to communicate to everyone the importance of establishing a culture of recognition.

Design Programs Around Your Values

Create an employee recognition and rewards program that aligns with your organization’s values. One way to do this is to create eCards — digital greeting cards — for each of your company values.

For example, imagine that one of your values is to push boundaries. If a contributor really raises the bar on a project they’re working on, encourage other team members to send them eCards that recognize their innovative spirit. In this example, the eCards might say something like, “Great job pushing the limits” or “Think outside the box!”

Another workplace value might be to “be a great teammate”. Here, you might encourage each employee to go to lunch with a coworker, bring in food to share, take a walk together, help a coworker with a project, or request recognition for others.

Use software that gives employees points for working together and allows them to spend those points on various rewards, whether online, in raffles at company meetings, or through annual auctions at holiday parties.

Create a Positive Work Culture

Employee engagement, productivity, and stronger relationships all create a positive workplace culture. So, recognize employees for certain behaviors. For example, you can give rewards to team members who participate in work events and theme days as well as go to off-site lunches. You can also use an employee recognition app that allows for peer-to-peer recognition using a social wall, which can help to build personal relationships between coworkers.

Overall, employee rewards and recognition reinforce company values and offer a means to consistently acknowledge employees for hard work, success, and being part of a team.

Tell Meaningful Stories

Another way to build connections among employees and foster a positive work culture is to encourage team members to tell stories. For example, you can create recognition experiences in which employees will tell their stories to others.

The tone and content of employee work stories can be powerful forces in shaping and strengthening your company culture.

Managers can also tell compelling stories. For example, maybe a manager wants to recognize an employee with a gift card. The manager can tell that story and publicize it to other employees. This will let employees know what’s necessary to gain recognition, which can help illuminate the path to success. It also tells them that their manager personally notices their good work.

But on a larger scale, telling stories creates a sense of openness and transparency within your organization. This makes team members feel more comfortable sharing things with each other. And a more comfortable work environment makes for a more positive atmosphere. This, in turn, leads to improved motivation and a greater will to produce top results.

Make Recognition Experiences Personal

Generic, transactional, or automated recognition has no meaning behind it and won’t have a significant impact on building a great organizational culture. On the other hand, when managers and leaders personalize recognition efforts, the experience tends to be more meaningful for employees.

Create customized recognition strategies that are flexible enough to meet the needs of each employee, while still being cohesive to your company’s mission, values, and goals. To do this, make it a point to know and keep in mind the preferences for each individual and what reward is most appropriate for a given accomplishment.

Use a Rewards System

Rewards like gift cards, food vouchers, and other tangible items are common. However, if you want your rewards to have the biggest possible impact, let employees choose their own rewards from several that you’ve handpicked for them. You can do this by using a rewards system.

Allowing employees to choose rewards based on the number of points they’ve generated (from certain accomplishments) adds a bit of fun and delight to the experience. Not only is this helpful when you’re not sure what to reward employees with, but it’s also great because you’re empowering employees with a sense of autonomy.

Workers can reward themselves with things they like, which means they’re likely to enjoy the reward. Beyond offering individual rewards, a rewards system can also allow employees to acknowledge each other’s accomplishments. This can be powerful for so many reasons, such as:

  • Boost work relationships
  • Promote team spirit
  • Improve employee confidence and self-esteem
  • Enhance work performance

Each of these benefits contributes to positive company culture.

Build a Designated Culture Wall

Want to show off your hardest-working employees? You can do this with vivid photos and visuals of top performers. So, consider designating a wall in your office space, and fill it with photos of your employees working hard, celebrating achievements, and enjoying life at work. Just make sure you find a way to include all departments and not just the “obvious” achiever departments, like sales.

If you don’t have enough space for a physical wall, you can create a digital space on your employee engagement platform. This can help connect employees and improve company culture with visible, value-based eCards and nominations.

Make Recognition an Everyday Part of the Culture

For your employee recognition program to be effective, recognition efforts should be consistent and frequent.

So, don’t reserve recognition and appreciation for just once a year. The best recognition programs operate daily or weekly, which helps them to become a normal, meaningful part of company culture. By recognizing often and designating the types of behaviors and achievements you’re going to reward, engagement will be increased.

And for the best strategy, don’t just recognize large efforts. Honor smaller accomplishments as well. From rewarding workers for taking care of family obligations and still doing great work, to acknowledging employees for lifting team members’ spirits, the opportunities are endless. Why not take advantage of them?

Choose a Customizable Employee Recognition Platform

Is your current employee recognition platform just not cutting it? Or are you still relying on outdated and mediocre methods to give out and keep track of employee rewards? Whatever the case, you could be seriously missing out on a rewards system that equips your business with the tools you need for an effective, impactful program that makes your company culture come alive.

At Xceleration, our employee recognition platform offers a wide range of features, including:

  • Customization: We’ll build a program that’s uniquely yours, from a branded user experience to custom communications and program notifications.
  • Engagement tools: Benefit from dynamic leaderboards, gamification tools, quizzes, and more to engage your employees.
  • Reward experience: Choose from our curated catalogs to offer the best rewards for your team. Reward your employees with merchandise, e-gifts, travel rewards, and experiences.

To learn more about how Xceleration can help boost your company culture through employee rewards, contact us today.

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