The 3 Types of Employee Recognition Programs

Choosing the right employee recognition programs for your employees can be challenging for Total Rewards professionals and HR leaders. The variety of program options can make it difficult to determine what to invest in for the best impact on employee engagement and satisfaction. This blog aims to clarify the different types of recognition programs and provide essential information to help you select a program that best fits your organization's needs.

Understanding Employee Recognition

Before we discuss the types of recognition programs, it's important to understand the basics of recognition. Employee recognition is a powerful tool an organization can leverage to build a positive, supportive work environment. Recognition plays an important part in creating a better employee experience, improving employees’ engagement, boosting retention, and more. 

There are a variety of ways to recognize your employees. When broken down, there are three main methods you can recognize someone, including:

• Public or Private Verbal Praise: Recognizing an employee's efforts or achievements verbally, whether in a team meeting or a private conversation, can be a powerful motivator and morale booster.
• A Token of Appreciation: Small, tangible gifts such as company-branded merchandise, gift cards, or other tokens can effectively convey appreciation.
• Digital or Handwritten Notes: Personalized messages, whether sent via email, messaging platforms, or traditional handwritten notes, show that you acknowledge and value an employee's contributions.

When strategically used together, these three types of recognition can help employees feel valued and appreciated.

What Type of Recognition Employees Value Most

Your recognition programs should be structured around your employees’ needs and preferences. If your recognition efforts don’t resonate with your staff, it can hinder your programs results. On the flip side, if your recognition programs are aligned with your employees’ preferences, it can have a significant impact – impacting everything from employee engagement to morale to your company’s bottom line.

Gallup conducted a survey to help uncover employees' recognition preferences. This survey reveals that employees prefer six specific methods of recognition. 

• acknowledgment via an award, certificate, or commendation
• private recognition from a boss, peer, or customer
• receiving or obtaining a high level of achievement through evaluations or reviews
• promotion or increase in scope of work or responsibility to show trust
• monetary award such as a trip, prize, or pay increase
• personal satisfaction or pride in work

These methods reflect a deeper understanding of what employees find meaningful. When planning or reevaluating your recognition programs, consider ways you can implement and incorporate the above six methods to ensure they have a lasting impact on your team.

3 Main Types of Recognition Programs

There are three main types of structured recognition programs, each designed to comprehensively recognize and reward employees. Understanding the differences between these programs can help you choose the most appropriate one for your organization.

#1 Traditional Rewards Program

A traditional rewards program is a one-time program that allows program administrators to recognize and reward employees on a specific date. This may include service anniversary awards, spot programs, holiday gift programs, or life occasion celebrations. Depending on the program, an organization may present a certificate, plaque, trophy, or gift to an employee to recognize their excellence or milestone.

Examples include:

• Physical or digital employee awards (i.e. Employee of the Month, DAISY award, etc.)
• Employee milestones
• Holiday and other special occasion programs
• Retirement
• Employee Appreciation Day

#2 Social Recognition Program

A social recognition program encompasses encouraging meaningful peer-to-peer recognition within a company. Often, organizations will use a digital recognition platform or the company intranet to encourage employees to celebrate each other’s achievements, dedication, partnership, and more. This type of program can help HR teams foster connection and belongingness regardless of where their employees are located.

Examples include:

• Recognition channel on company intranet
• Social recognition channel
• Recognition wall
• Nomination programs

#3 Monetary Recognition Program

A monetary recognition program is a recognition and rewards program that provides tangible rewards to employees for their accomplishments, contributions, and behaviors. These programs often incorporate peer-to-peer recognition, enabling eligible employees to send their fellow colleagues points in celebration of work accomplishments and teamwork. A monetary program is great for incentivizing meaningful peer-to-peer recognition to increase program adoption and create a more unified workforce.

Examples include:

• Points-based Recognition Program
• Yearly Bonuses
• Stock

Determining Which Recognition Programs Best Suit Your Organization

Choosing the right recognition program can be a game-changer for your organization. To find the best fit, start by thoroughly understanding your organization's unique culture, goals, and challenges.

Here are a few factors to consider when developing your recognition programs:

Aligning Your Program with Your Goals

To ensure your recognition program supports your HR team's or organization’s goals, begin by clearly defining those goals. Are you aiming to improve employee engagement, reduce turnover, or foster a culture of appreciation? Once your objectives are clear, review various recognition programs to see which ones align best with these goals. For example, if enhancing team collaboration is a priority, a peer-to-peer recognition program could be ideal. If you’re focused on improving individual performance, a program that highlights achievements might be more effective.

Evaluating Program Flexibility

When selecting a recognition program, consider its flexibility and scalability. Your organization may evolve, and so might your recognition needs. Opt for a program that can adapt to changing circumstances, such as growth or shifts in team structure. A flexible program ensures that recognition remains relevant and effective over time, helping sustain long-term employee satisfaction and engagement.

Non-Monetary vs. Monetary Program

Another aspect to consider is whether or not to include a monetary value in some (or all) of your programs. Often companies will incorporate a combination of non-monetary and monetary recognition programs into their strategy. Depending on the significance of the recognition, HR teams and employers will categorize their programs into the two when outlining the budget and structure.

• Non-Monetary Recognition: These programs focus on providing recognition without financial rewards. They often include verbal praise, certificates of achievement, special assignments, or public acknowledgment during company meetings. The emphasis is on appreciating employees' contributions in a meaningful way that doesn't involve monetary compensation.
• Monetary Recognition: These programs include financial rewards as part of the recognition process. Bonuses, gift cards, salary increases, or paid time off are examples. Monetary recognition can be highly motivating, especially when linked to specific achievements or milestones.

It’s important to note that as you budget for your recognition programs consider adding a category for “spontaneous acts of recognition.” There may be times throughout your fiscal year that you may need to allocate a few dollars towards an unexpected achievement or occasion. In these instances, it’s nice to have a portion of your budget readily available to limit stress and worry.

Utilizing Feedback to Shape Your Strategy

As you implement your recognition program, ongoing feedback is crucial for its success. Conduct a company-wide employee survey to gauge how well your recognition efforts are resonating with your team. Additionally, providing employees with access to a 24/7 pulse survey can provide continuous insights into the impact of your recognition initiatives, allowing you to make timely adjustments.

Streamlining Employee Recognition with Software

A challenge HR teams often run into with recognition programs is that they can be difficult to maintain and manage when handled internally. Implementing and managing a recognition program can be time-consuming and complex. When a team is strapped for time or resources, internal programs can be sporadic or disorganized, limiting the impact of the program.

This is where a software solution can come in handy. A digital recognition platform, like Inspirus Connects, can streamline the entire recognition process by providing a centralized platform for managing recognition and rewards activities. It reduces the manual effort required to set up and maintain programs, ensures consistency, and offers robust analytics to measure the program's impact.

Are your recognition efforts limited due to time and resources? Talk with an Inspirus specialist today to see how we can help you scale your recognition efforts with our all-in-one recognition platform.

Summing It Up

Understanding the three main types of recognition and implementing a mix of recognition programs can significantly enhance the employee experience and foster a more positive company culture. By implementing strategic programs, you can create a better experience for your employees that makes them feel appreciated, motivated, and valued, leading to higher retention rates and a more engaged workforce.