Rewards and Recognition: When to Use What

But what if you’re an HR manager or recognition leader charged with “building a culture of recognition” or a “culture of performance” for your company? Is it really possible to “build” a workplace culture? Sure, we can influence culture, contribute to it and nurture it — but can we put all the pieces in place to build it?

Someone’s doing it. Studies show that organizations with a culture of recognition benefit on several levels. Employees who are recognized and rewarded for a job well done are more engaged. Studies show one of the most important drivers of great work, is to be recognized. Engaged employees who feel valued and respected are happier and more productive — which has a direct impact on the company’s customer satisfaction, efficiency, profitability, and tons of other business outcomes. Engaged employees are less likely to join the current ‘Resignation Tsunami,” staying put in their current position instead of searching for a better job. Companies that have higher retention rates spend less time looking for new people and save a bundle on the costs associated with training new employees.

And that’s just the tip of the iceberg.

Google the phrase “culture of recognition” and 594 million entries pop up — all of them offering a link to someone’s opinion or advice about what to do and what not to do. Similarly, “culture of performance” displays over 9 billion entries. That’s a lot of reading.

To save you time, we’ve compiled a “cheat sheet” of employee rewards and recognition — and when to use them. Together, they lay a powerful foundation that you can put into action in 2022 that will help you recognize, engage and inspire your people in strategic and targeted ways — employee engagement strategies that can boost your company’s success.

This quick summary covers four categories — service milestone recognition, employee recognition, “spot” recognition and performance rewards. Each category is designed to reach your workforce in a different way that drives either a culture of recognition or a culture of performance. Let’s look at each category and the specific types of awards included in each.

A Culture of Recognition

Want to make your people feel valued and appreciated? Service milestones and employee recognition awards are a powerful combo.

Service Milestones

How does the company bid a fond farewell to Hank when he retires after 47 years of loyal service? How do you congratulate your boss on her 10th anniversary with the company? How do you encourage the account service newbie who just completed his first 90 days on the job?

Retirement, onboarding, and service awards acknowledge significant or strategic milestones. “They are considered an important “first step” in building a culture of recognition,” says Terri Moore, Senior Vice President of People and Culture, for Inspirus and Sodexo Benefits and Rewards Services, USA. “By thanking people for their service and tenure, you let them know how much they are appreciated and valued for the contribution they make to the overall success of the company.”

Never underestimate the powerful effect of milestone recognition. After all, the need to feel appreciated and to belong top Maslow’s hierarchy of human needs. Employee anniversary recognition sends a powerful message to recipients, coworkers and the entire company: We respect your service, dedication, and commitment. We value you and your work.

Employee Recognition

How do you inspire and motivate employees to embody work behaviors that optimize productivity and performance? Employee recognition encourages and rewards the key behaviors your organization has identified as drivers for success. Two types of recognition fall into this category — nomination and peer-to-peer recognition.

Nomination awards are popular with many companies because they let exceptional employees know they are the “best of the best.” These awards are selective honors given to individuals who:

• Best exemplify the spirit of the organization
• Embody the qualities and characteristics of an ideal contributor within the organization
• Consistently perform in a way that drives excellence

Whether they are given in only one category or several categories, these awards carry prestige within an organization. Executive leadership usually determines nomination criteria, deserving employees are nominated, and a selection committee chooses the winner(s).

Peer-to-peer recognition is less formal, but very powerful because employees are active participants in recognition. Want to thank the coworker who covered for you while you were on maternity leave? Want to let the graphic designer who always makes your proposals look flawless know you appreciate his help? Empowering your people to show how much they appreciate their colleagues does a lot to foster a culture of recognition.

A Culture of Performance

When you want to inspire people to be more productive, achieve new goals or exude behaviors aligned with business strategies, “on-the-spot” recognition and performance awards can do the trick.  

Spot Recognition

This award tactic uses an immediate, and mostly informal approach. When an employee demonstrates a desired behavior or excels in some way, he or she is rewarded right away.

Spot rewards encourage recipients to keep up the good work. Maybe your customer service team worked over the weekend to meet an insane deadline, or your facilities manager just found a brilliant way to cut energy consumption by 25%! Spot recognition not only reinforces positive behavior in the recipient, but it also inspires other employees to step up their performance, too.

Our best practices show that recognition is most effective when it is given immediately. On-the-spot awards are a spot-on way to build your culture of recognition.

Performance Rewards

It’s no secret that incentives are very effective when it comes to motivating people to achieve goals. How do you inspire your sales team to exceed their quarterly goal by 25%? How do you encourage Emma to keep up the good work when she goes 90 days without a cigarette? How do you reward Jordan for dropping 20 pounds and lowering his blood pressure in the process? It’s easy to inspire success with coveted rewards that employees appreciate and want.

• Sales awards fire up your team and motivate them to excel in ways they might not think are possible.
• Safety awards foster a safer workplace and help reduce injury rates. Research shows that every dollar an employer invests in a safety award program can save the company $4 to $6. That means the minimum return on investment an employer can expect from creating a well-defined safety program and culture could be as high as 400%.
• Health and wellness programs and awards reduce employer healthcare costs, improve employees’ quality of life, foster a positive team culture, and positively affect business outcomes by increasing productivity, decreasing absenteeism, and more.

Whether you want to build a culture of recognition, a culture of performance, or both, employee rewards and recognition not only engage your workforce but drive better business performance.