Rewards and recognition in the workplace show employees that you see their value. When so many modern workers are unhappy, dissatisfied, and disengaged, employee rewards and recognition can’t be overlooked, underutilized perks. They are crucial tools to influence company culture, engagement, motivation, turnover, and productivity. 

With this guide, you’ll learn key definitions—plus everything you need to get buy-in, effectively implement, and steadily increase your company's employee recognition and improve your reward offerings.

What are recognition and awards in the workplace? 

After hearing the terms so many times, they might start to feel like HR buzzwords rather than helpful designations for workplace best practices. Let’s take a step back to the basics to define rewards and recognition. 

• Recognition is an acknowledgement of an employee’s value and contributions. It involves noticing and naming individual contributions. 
• Rewards are tangible perks for accomplishments of some kind. A reward involves giving employees something, like a bonus, gift, or experience. 
• Recognition and rewards work together to create a workplace culture where individuals are seen, valued, and compensated for their effort. 

In modern workplaces, it isn’t enough to say “good job” or rely on annual bonuses to form employee relationships. People respond when both happen together. Recognition followed by reward says: We see what you do, recognize who you are, and respect your value.

The business case for employee recognition

Check out these employee rewards and recognition stats to help you answer the question, “Why is recognition important?”:

• 94% of employees who feel highly appreciated love their workplace.
• Employee recognition lowers turnover by 31%.
• Employee recognition increases engagement and productivity by 14%. 
• Incentives and rewards lead to a 22% boost in productivity.
• Employees are 3X more likely to be loyal to an organization with a culture of recognition,
• High performing companies are 10X more likely to put a central focus on recognition.
• Recognition decreases the chance of employee burnout, while a lack of recognition increases the chance of burnout by 48%.

All these benefits mean that creating a culture of frequent and genuine recognition in the workplace can completely transform a company’s productivity, retention, and performance. Get an analysis of the exact ROI you can expect with Awardco’s recognition ROI calculator.

Here’s the problem: only 27% of employees feel recognized, and 50% of people feel undervalued at work. Knowing the benefits of rewards and recognition isn’t enough—you have to build programs that offer them in an effective way.

How to build a culture of recognition

Not all recognition is created equal. Whether you’re trying to improve recognition from managers, facilitate team member recognition, or strengthen leadership recognition, there are best practices that will make each type more effective. 

When implementing or improving employee recognition programs, you must have some foundational practices in place that make it easy and rewarding to recognize. These foundational concepts are what makes rewards and recognition programs work:

• Make recognition easy to do. Executives, managers, and employees all have a lot on their plates, so when recognition is complicated or cumbersome, most won’t bother. However, with an innovative recognition platform, people can quickly give shoutouts on the spot. And don’t forget to encourage in-person compliments and public praise!
• Make recognition specific, timely, and genuine. Whenever you recognize someone, it should be for a specific reason, it shouldn’t be weeks after the fact, and it should be heartfelt. Only with these key features will recognition give you the benefits you’re looking for.
• Tie recognition into company values. Value-drive recognition is a sure-fire way to build a healthy work culture. When recognition reinforces value-driven behaviors, your employees will come to understand your values and put them into practice.
• Utilize monetary and non-monetary recognition. Monetary recognition is a great way to reward employees for excellent work or celebrate special events or holidays. However, non-monetary recognition is perfect for smaller occasions or to shoutout employees for hard work.

When recognition is easy, meaningful, and value-driven, your culture of recognition will reach everyone effectively.

Barriers to rewards and recognition in the workplace—and how to overcome them

What are the main reasons effective recognition isn’t happening at your workplace? The most common roadblocks are:

• Leaders assume that they already do recognition
• Recognition is inconsistent across departments, teams, or locations
• A lack of structure, tools, or training

What can you do to overcome these challenges? Here is a short framework to help you find and eliminate recognition roadblocks:

• Audit your current efforts. Where is recognition happening? Where is it missing? Do employees feel valued? Find out where the gaps are to give yourself a starting point.
• Educate and equip managers. Manager recognition is the most impactful for employees. Make sure leaders know when, why, and how to recognize effectively. Give them the tools and training they need to be successful.
• Automate and systematize. Make recognition easy for everyone with a recognition platform that automates reminders, offers helpful AI prompts, and consolidates all administration into a simple package.

Employee rewards and recognition best practices

Now that you know why and how to implement recognition, here are some strategies to make it easier to get started.

Offer various recognition programs

Every employee is different, which means everyone has different preferences for recognition. In fact, many employees would rather have recognition delivered privately, not publicly. But that doesn’t mean social shoutouts or public praise are bad.

Another tip: cash is great, but it isn’t your only reward option. Many employees respond better to rewards like development opportunities, greater trust, or more responsibility.

Survey and talk to your employees to figure out what types of recognition and rewards mean the most to them. After all, creating multiple different recognition programs and reward networks is a piece of cake with Awardco.

Make rewards and recognition more frequent

Employees spend eight hours every day, 40 hours a week, at work. Being recognized once a month or even once a quarter simply is not enough. 40% of employees are recognized only a couple times each year or less, and 82% of employees don’t feel recognized enough at work.

The key to solving this problem is to build a framework for recognition at every stage of the employee journey. By doing so, you’ll build an employee recognition culture where everyone feels valued starting from day one.

Keys for recognizing throughout the employee journey:

• Onboarding: Offer a welcome package with new hires’ favorite things, recognize early contributions often, and check in with new employees at regular intervals.
• Growth: Offer avenues of professional development for each position, including skill building, certifications, promotions, and more.
• Milestones: Always remember to recognize each work anniversary, and keep personal milestones in mind, too.
• Transitions: Make transitions easier by focusing on the employee’s contributions, whether they’re changing roles, leaving the company, or retiring.
• At-risk moments: Talk to employees who display signs of burnout, stress, or disengagement. Recognize consistently through one-on-ones and performance reviews.

Recognize and celebrate milestones

Besides work accomplishments, employee recognition should encompass professional and personal milestones. Some examples of fitting milestones like birthdays, marriages, or graduations.

These work and life events are a huge deal for your employees, so when you recognize these milestones, you show that the company cares about its people, both in and out of work.

Promote and recognize employee wellness

Burnout and stress are the new workplace pandemic, with 67% of employees saying stress and burnout have gotten worse since 2020. 83% of Americans regularly deal with work-related stress, too.

Employee recognition doesn’t only celebrate those who prioritize wellness—it can also incentivize participation in wellness programs and initiatives. Create programs centered around walking a certain number of steps, eating certain healthy foods, or taking care of their mental health. Then, incentivize employees to participate and recognize those who do their best.

Mix digital and physical recognition

Digital recognition is convenient, fast, and easy, but it may not reach everyone. Using physical recognition, such as notes of gratitude, gift cards, or an in-person compliment balances your recognition programs.

Reward and recognition ideas for the workplace (examples included)

So what does all this look like in practice? Try one (or more!) of these ideas to make your employee recognition efforts more effective. Keep logistics easy with Awardco’s HR dashboard.

Built-in celebration cycles 

Every employee has a birthday, and everyone celebrates holidays throughout the year. Use built-in markers to prompt recognition in the workplace. 

• Birthdays. A birthday or holiday recognition program is great because you can give personalized gifts, cards, or point amounts to every employee throughout the year. Remembering a day that is important to them goes a long way. (Someone at your office not into birthdays? Try celebrating Employee Appreciation Day instead.)
  
• Employee milestones. When you recognize and celebrate employees’ personal milestones, you show that you care about them as people. Some examples of milestone celebrations include giving employees some points when they graduate, when they get married, when they have a child, or when they move.
  
• Service anniversaries. Even if your big awards are every five years, make sure to offer some form of reward for every year an employee stays with the company. This consistent recognition shows that you're always grateful for all the work each employee puts in.
  
• Above-and-beyond program. Recognition can drive healthy employee behaviors, so recognizing those employees who go above and beyond is important. A program that rewards those who really excel is a great way to recognize effort, especially when the reward is sizable.

(Extra tip: Use Awardco’s Lifestyle Spending Account feature to spread your service award budget throughout the year instead of leaving it for a single occasion. We’ve found that regular recognition is much more effective than a yearly reward.)

Low-cost recognition methods 

Meaningful recognition doesn’t have to be a big line item in your budget. These low-cost recognition methods are great for SMBs or as supplements to your other rewards.

• Spot recognition. Whenever anyone does something admirable, this type of program allows their manager or their peers to immediately send them a message of gratitude, congratulations, or praise. Spot recognition is great because it’s immediate and specific.
  
• Public and private shoutouts. Some employees really like being brought up in front of the company. Others, not so much. For this, consider creating both public and private avenues for recognition. For those who like the spotlight, recognize them in front of the company or on social media. For those who like anonymity, a private compliment or a handwritten card are great ideas.
  
• Rotating trophy. A goofy trophy, such as a handmade cardboard one or a stuffed animal of some kind, is the perfect reward that employees can share. For example, pass the trophy around each week to the employee who did the best on that week’s challenge. This is a creative way to recognize effort and push employees to do just a little better each week.
  
• LinkedIn recommendation. Leaders can recommend their employees on LinkedIn, which can be a huge boost to an employee’s social profile. That sort of public demonstration of gratitude and confidence can also make employees feel great.

The sky's the limit for your recognition programs. Create custom programs that excite and involve your employees, and they’ll respond by building a culture of engagement.

Rewards with personal and institutional impact 

When you have the budget, rewards that improve employee well-being and development do more than just encourage a positive culture. They can shape employees’ access, skillset, and contributions in significant ways. 

• Workspace upgrades. For those who work from home for any amount of time, helping them upgrade their workspace is a great way to recognize them. Ergonomic gear, noise-canceling headphones, a webcam, or even a new office chair all empower employees to continue doing their best work.

• Professional development opportunities. Recognizing that employees want to learn and improve is vital to your workplace. In fact, 71% of employees say that training and development increases their job satisfaction. Offer training courses, shadowing opportunities, tuition reimbursement, and online classes to help employees grow.

• Off-site events. Host both company-wide and team off-site events to give employees a chance to get out of the office and get to know their coworkers better. Allow families to attend larger events. These parties are a great way to show how much you value employees while strengthening relationships. 

• Employee wellness programs. Wellness programs can be anything from gym membership reimbursement and a small stipend for groceries to team fitness challenges and healthy office perks. One great way to push wellness initiatives is by incentivizing healthy behaviors—and Awardco helps you make incentives easy.

How do you effectively support mental health in the workplace? Supported employees do their best work—and are more excited to do it. 

Classic incentives that still drive results

Some common employee incentives have been used for years. That’s because they work. Don’t neglect these well-established rewards and programs as you shape your recognition culture.

• Free food. Providing free meals and treats to your employees is a great way to show them you appreciate their efforts and are cognizant of their finances. This is also a great recognition idea for remote employees—simply have the food delivered to their house.
  
• Philanthropic support. Employees want their company to care about the issues that they care about. Recognize that employees have movements that they’re passionate about, and support them by matching charitable contributions, giving them time off to volunteer, or planning a company-wide service project.
  
• Sabbatical programs. In addition to traditional employee milestone awards, consider a program that offers extended time off at key intervals. Sabbatical programs reward seniority and loyalty, plus they allow employees to come back to work refreshed and ready to achieve.
  
• Breaks and PTO. Employee mental health needs to be a focus for companies, especially because burnout levels are so high. Recognize employees by giving them extended breaks throughout the day and providing extra PTO. Learn how to help employees with burnout.

If you’re ready to implement one of these ideas, our step-by-step guide for rewards and recognition programs in the workplace can get you started.

How technology amplifies rewards and recognition

You may be wondering why you need a software platform to empower your recognition and rewards efforts. There are a few benefits to keep in mind:

• Make recognition simpler and more streamlined for everyone to participate in.
• Foster engagement and interaction with social features.
• Support remote and hybrid employees.
• Manage and track budgets, reports, engagement, and more in a single platform.
• Self-service rewards to take fulfillment and tracking off your shoulders.
  

Awardco has multiple unique features to make rewards and recognition easier for executive teams to support, HR teams to implement, and employees to participate in, including:

• Lifestyle Spending Accounts to empower employee wellness
• External Recognition to allow customers, patients, and third parties to recognize your employees
• AwardCodes to reach deskless and frontline employees
• Reward options that offer millions of choices for employees all over the world‍
• Automation to simplify HR tasks and save time

Employee rewards best practices

Recognition, as important as it is, is only half of the solution. Employee rewards need to be fitting, personalized, and meaningful for each and every employee. But how do you accomplish that, especially when every employee probably wants something different?

There’s one answer that can solve this conundrum: giving employees the power to choose. That’s probably why gift cards are so popular, because it gives employees the freedom to spend the money on what they want. (However, Amazon is even better than gift cards.) Here are some other strategies for offering stellar rewards:

• Make them personalized. Never, ever give cookie-cutter gifts because most people will be disappointed. Not everyone wants a cooler or a pair of Converse. Talk to your employees to figure out what they’re interested in, then sculpt your reward options around them.
• Gift career advancement. Not every achievement needs to be rewarded with cash or a gift card. In fact, promotions, raises, training opportunities, and new responsibilities are fantastic rewards for those employees who are motivated to improve themselves.
• Give the gift of team building. With remote and hybrid work getting more and more popular, rewards shouldn’t always be specific to one person. Instead, reward entire teams with the opportunity to get out of the office and have fun together.

Rewards need to be rewarding, or else they do more harm than good. But with effective recognition and fitting rewards, employees will love the culture you create.

How organizations put this into practice [Case studies]

When done right, recognition improves the employee experience while contributing to company productivity. Here are some examples of how Awardco programs delivered: 

South Oregon Head Start. With a limited nonprofit budget, this organization implemented low-cost recognition programs that included birthday shoutouts and values awards. Their culture strengthened, and their annual attrition rate dropped from 45% to just 8%. 

Quick Quack Car Wash. Facing the morale challenges of the service industry, Quick Quack Car Wash wanted to recognize and retain good employees. With Awardco, they implemented six-month celebrations and annual service awards, resulting in a 20% reduction in turnover.

‍See more case studies that drive engagement and ROI.

Start small, stay consistent, and drive big impacts

Employee recognition and rewards are the solution you need for an ailing culture, which is a common problem in today’s work environment. Awardco can help you create customized programs, curate personalized reward networks, and implement an easy-to-use solution that reaches all of your employees. Schedule a demo today!

FAQs 

Do rewards and recognition really improve performance?

Yes. The consensus is clear: Rewards and recognition really do improve employee engagement and performance. Data backs this up, like Zippia's analysis of employee recognition research, which found that 37% of employees are more engaged with recognition. 

But the relationship between rewards and performance is easy to see for yourself. Watch what happens as you implement systems to recognize employees at your own organization. If you don’t notice an impact, audit the process. Are you using the kind of rewards your employees actually want? 

What are the best reward and recognition ideas for small teams?

Personalization is a key element of reward and recognition, especially for small teams. Your actions are more visible—and less likely to be drowned out by other noise—the smaller your team is. 

Some of our best ideas for small teams include shoutouts in team meetings and birthday traditions that everyone can enjoy. Get creative, based on your unique team dynamics. Try an art class, game night, or matching keyboard accessories. You know your people best.

How often should employees be recognized at work?

Ideally, employees should be recognized at least once a month. That doesn’t mean you need to offer a grand prize every 30 days, but it does mean you should offer sincere, specific praise based on contributions. This might look like a spotlight moment during a meeting or an on-the-spot comment after a well-completed task.

Recognition always works best when it's regularly reinforced. While a once-a-year tenure award is a meaningful gesture, it can begin to fall flat if that is the only time an individual feels seen. Bump up the impact of milestones and award cycles with smaller, thoughtful gestures at periodic intervals.

Can one platform manage rewards and recognition together?

Absolutely, one platform can manage both rewards and recognition. The key is finding the platform that meets your organization’s needs. 

With Awardco, you can easily integrate reward programs with recognition opportunities. Choose your own schedule, delivery method, and more. Automate special milestones or events for each employee that deliver personalized rewards and lasting impact.