Designing a Recognition & Reward Program at Work

An effective recognition and reward program at work contributes to a thriving company culture. Employee recognition and appreciation can help drive loyalty and engagement—and that includes programs.

At the same time, cookie-cutter recognition programs do not generate the same goodwill as a tailored approach. It would be nice for leaders if there were a simple formula for developing a successful program. However, employees want to be acknowledged and rewarded in ways that are as unique as they are.

If you’re developing or revamping a reward program at work, read on to discover the keys to building an effective, tailored program that aligns with your organization’s values.

What is an Employee Reward Program?

An employee recognition program is a planned, systematic effort to recognize staffers in the workplace. While there may be independent initiatives to acknowledge workers led by team leaders or managers, these are often unofficial and can be inconsistently implemented.

To qualify as an employee reward program, it should:

Include clear and established criteria for management to follow
Be reviewed and approved by leadership
Be used consistently to reward employees

Also, employees should know when they are being rewarded and the work requirements it takes to achieve the results needed.

The most successful and impactful reward programs are dependable, highly visible, and tailored to the employee and work that is being recognized.

What are the Benefits of a Reward Program at Work?

When a recognition program meaningfully connects with employees, it can build goodwill and engagement with the company. Rewarding actions, results, and behaviors that align with your company’s values, mission, and strategy can support a constructive and cohesive company culture where individuals can thrive.

The benefits of reward programs at work may include:

Increased employee satisfaction and engagement
Improved employee retention
A culture of inclusion and belonging where employees feel seen and recognized for their contributions
Increased employee motivation (recognized and rewarded employees are more willing to contribute)
Improved relationships between employees, management, and the organization

Three Primary Types of Recognition

A robust and effective reward program at work will likely use multiple types of recognition. As long as the recognition is consistently applied, visible, and valued by the employee, it’s great to be flexible with how you are rewarding employees so it truly resonates with them.

Here are the three options:

1. Social Recognition

Social recognition can be manager-to-employee or peer-to-peer. It validates and acknowledges behaviors that support the team or align with company culture.

Social recognition can range from a public “thank you” in a meeting from a manager to the addition of a digital badge to your LinkedIn profile, or other online recognition. Some office messaging apps have a way to set up reminders to send recognition to a colleague or direct report. This can be helpful if you are looking for ways to remember to appreciate small wins as well as big ones.

Social recognition is typically a non-monetary way to consistently acknowledge and reward employees in a way that supports a positive company culture.

2. Monetary Recognition

Monetary rewards can make some employees feel appreciated, but only if they find this type of recognition valuable. For some, quality or time or hearing their work is valued will matter more. Examples of monetary rewards include things like gift cards, cash bonuses, paid trips, extra paid time off, parties, or events.

Some companies use a points-based system where rewards can be accumulated on a specific site or app. Those points can be traded in for rewards of their choice like gift cards or specific items—or even gifted to other employees to acknowledge them. While more complex, these programs can be very successful and budget-friendly—and even gamified to hit certain thresholds, providing an ongoing source of motivation.

3. Peer-to-Peer Recognition

Being recognized by your peers can be another great way to show employees how much you value them. This can be as simple as sending a quick message to say how impressive you thought a presentation was or buying them lunch after a big deal is closed.

This kind of acknowledgement can build positive dynamics and help forge better relationships. Remember that some employees will also like (or even) prefer to receive recognition from leadership, so it’s important to appreciate everyone in ways they find meaningful.

How to Design a Reward Program at Work

An effective employee recognition program takes time and planning to develop. To deliver results, it should be a program your employees believe in, feel rewarded by, and use.

Here are a few steps you can follow to develop yours.

1. Design the Program with Your People in Mind

How do your employees currently interact, and where do they spend most of their time? If you can efficiently integrate a reward program into their existing day-to-day, they are more likely to use it. If they regularly stop by your local coffee shop, gift cards from thee may be a great option. Do they often gather for happy hour at a local pub? Could your company cover the hosting costs next time as a reward?

2. Determine Program Objectives

What are your program’s objectives? Do you want to increase employee engagement, build a culture of recognition, improve productivity, enhance the team culture, or something else? Knowing what you want to accomplish and what your employees value is essential in designing an effective program.

3. Consider Existing Company Culture

As you determine the program’s objectives and systems, you’ll want to keep them aligned with your company’s values. A successful reward program at work can support and nurture your company’s culture.

What you choose to reward will be reinforced.

What you choose to reward will be reinforced. The psychological law of effect says what you reward will be repeated. You want to ensure you reward the behaviors that will drive success for individuals, teams, and the organization.

At this step, you strategically align your program’s goals with the big-picture desired outcome.

4. Set Your Budget

While non-monetary awards can be as effective as monetary ones for some employees, combining the two is one formula for creating a robust and successful program. Determine the budget you can allocate for a program, including any monetary rewards or costs of awards, travel, or gifts. If you choose to use a software system, look for one that seamlessly integrates into your company’s day-to-day operations—and maybe even includes a peer-to-peer feature.

You will also want to settle on a way to track and adjust the program from the start.

5. Outline the Hows and the Whens

An effective program includes clear policies about how and when to recognize and reward employees. Without this, the program may be inconsistently applied by different managers or even seen as unfair.

Consider offering a company-wide training program with examples of aligned and effective recognition. Introduce the concept of and share why leaders see it as an essential part of your company’s culture. Your training should also dive into how the program works and how employees can engage with it (especially if there is a peer element to it!).

6. Communicate and Train

New habits take a while to develop, so communicate consistently as you roll out the program and allow it to take hold in the culture. Set aside time to train everyone involved, from executives to individual employees.

Some people are natural at acknowledging and appreciating their staff and peers, but others have to learn how to do it well. Offer additional resources and support to any leaders struggling to make it a common practice for their team.

Also, keep in mind you are asking people to add a new task to their to-do list. While most of them will likely appreciate the program once it’s up and running, initially, some inertia is natural. Consider scheduling 30-60-90-day reminders to leaders to follow up.

7. Set KPIs and Track Your Program’s Progress

Clear metrics are an important part of tracking the success of any program. In this case, you want to establish key performance indicators (KPIs) for your rewards program. This can include everything from how employee performance will be measured for rewards to adoption and participation.

These KPIs can help you assess and adapt the plan as needed, and they can help leadership understand and measure the team’s engagement.

Common reward program metrics to track include:

Recognitions sent
Recognitions received
Monthly active users
Activation rates as new people use the system
Number of leaders participating
Increases in engagement

Keys to a Successful Program

While the specific ideas you employ to reward and recognize your employees will depend on your goals and culture, there are some essential components to consider for developing an impactful program.

Consistency

For recognition to have a lasting impact, it needs to be offered consistently across all departments and employees. If possible, it may also be helpful to acknowledge the team or individual soon after they achieve the goal, meet the KPIs, or showcase the leadership trait, for example.

Visibility

For acknowledgment to have an impact, it must be visible—which can be accomplished either privately or publicly. Some employees are uncomfortable with a lot of attention. Others will feel more appreciated with a public acknowledgement.

Either the way, it’s important for the employee to receive the recognition in the way they enjoy and for everyone to know why they’re receiving it if you want the behavior or action to be replicated across your entire team.

Tailored

The best recognition is specific to the employee’s preferences. One option is implementing a points-based program that allows employees to choose their award, another is to offer a flexible system of rewards that honors the preference of the recipient (i.e. paid vacation time or a cash bonus).

Managers can also meet with their team members individually to learn about the style of recognition that feels best to them. One approach is having all team members learn their language of appreciation in the workplace. This knowledge will help you more effectively recognize your team members.

Specific

If everyone gets the same reward no matter what they do, it can feel less meaningful than if the reward matches the level of impact and effort involved. Be specific about an employee’s contribution when you recognize and reward them.

Build a Culture of Recognition

Employees devote a significant amount of time to their work. When you find ways to make it a gratifying and rewarding experience, you can improve their work experience while contributing to a productive and healthy company culture.

But company culture is more than rewards and recognition. If you’re looking to improve your company culture, Compass is hosting an upcoming webinar on team culture.