Employee Recognition and Rewards Program: A Practical Guide

Recognition & Rewards
May 15, 2024

As an HR professional, you might be looking to launch your company’s very first employee rewards and recognition program. Or you might already have a program in place and want to implement a new type of initiative. Either way, we are sure you landed here because some questions are circling your head, like:

  • What type of program should I launch?
  • What type of program will employees prefer?
  • Will they even participate?

This is a big initiative and responsibility. Of course, you want your program to succeed. So, conducting this preliminary research is an important part of that equation.

Launching a thriving recognition and rewards program

That said, at Qarrot, we’ve helped countless companies launch successful employee recognition and rewards programs. Over time, we have learned some lessons about what it takes to design, launch, and maintain a successful program.

In this article, we’ll discuss everything related to recognition and rewards – the key differences between the two, ideas for rewards and recognition, and how to overcome common challenges.

Whether you’re looking to launch your first program or thinking about updating an old one, some ideas and best practices are important to remember. By the end of this short guide, you’ll better understand the reality of launching a successful program. You’ll also have the knowledge and feel more confident taking the next steps!

Rewards and Recognition: What’s the Difference?

While the terms "rewards" and "recognition" are often used interchangeably in the workplace, it's important to note their distinct roles. Both are crucial for celebrating successes, boosting morale, and showing employee appreciation, but they operate differently.

Employee rewards are tangible incentives or perks. They can sometimes be monetary or can also take non-monetary forms.

For example:

  • Performance bonuses 
  • Raises
  • Trophies
  • Tangible gifts
  • Gift cards
  • Paid outings 
  • Extra time off

In other words, rewards are a visible and concrete way of showing appreciation to employees for their effort and hard work. They can be powerful motivators by providing some level of extrinsic motivation.

That said, rewards are often offered with some form of verbal employee recognition. In our experience, the best reward experience always includes some level of personalized recognition.

To that end, recognition is not always about money but also about verbally acknowledging and showing appreciation for employees’ efforts, behaviors, and progress. 

It can include things like

  • Thank-you cards or letters
  • Verbal shout-outs at meetings or in private
  • A recognition message posted in your work chat tool or recognition software.

Verbal recognition is not only the most desired form of employee appreciation worldwide, but it's also the easiest and least expensive way to show appreciation. Research consistently shows that a simple 'thank you' can go a long way in boosting employee morale and satisfaction.

For example, Dr. Paul White is a psychologist and expert in workplace recognition, and he and his team have been studying appreciation in the workplace for years. Recently, they reached a huge milestone, where over 400,000 employees have taken their workplace survey to gauge how they prefer to be shown appreciation at work. Unsurprisingly, “words of affirmation” continue to be the most desired form of appreciation by employees worldwide. 

“words of affirmation” continue to be the most desired form of appreciation by employees worldwide. 

What’s the takeaway here? 

When planning a rewards program, it's crucial to remember that tangible rewards like gifts or team outings are not always sufficient.

Verbal recognition is a key component that should not be overlooked. Offering effective employee recognition is not just about saying 'good job,' it’s about acknowledging an employee's unique contributions and highlighting what they did well. When recognition is genuine, sincere, and personalized, it becomes a potent tool for stimulating intrinsic motivation.

Types of Reward and Recognition Programs in the Workplace

Let’s be honest: if you’re in HR, you probably know managers aren’t always the best at giving regular recognition. Even though we all know it’s important, sometimes it’s hard to get in the habit of doing something regularly. This applies to many things in life; giving recognition at work is definitely one of them!

This is where an official program can help.

One critical benefit of an official rewards and recognition program is formalizing and structuring the process of recognition giving. This helps give leaders a framework for when and how to offer recognition. As a result, this makes it more likely that employees will get the regular recognition that they need to stay happy, engaged, and motivated. 

That said, rewards and recognition programs come in all shapes and sizes. There is no “one-size-fits-all” formula. However, you can categorize them into two major buckets: formal and informal programs.

More “formal” programs usually involve initiatives like:

  • Years of service awards 
  • Milestone programs
  • Performance awards
  • Birthday celebrations
  • Employee of the month
  • Nomination programs

More “informal” programs usually involve initiatives like:

  • Shoutouts in meetings
  • Organizing paid outings or events
  • Thank you letters
  • Offering small gifts for a job well done

Key differences between program types

Whether you’re looking to implement a more formal or informal initiatives, there are some key differences to remember between these two types of recognition programs.

Formal programs often need more time and resources to roll out and launch. They also need budgeting as they offer monetary or non-monetary rewards to employees. As such, these types of programs often use third-party recognition tools, like Qarrot, which provides a platform for employees to shop and redeem their rewards or gifts.

But, once a formal program is on wheels, it can essentially be automated and become simple and easy to run. This is especially true with the help of modern recognition tools like Qarrot. Most importantly, the greatest advantage is that it provides structured and predictable moments for employees to get regular appreciation from their leaders and peers.

On the other hand, informal programs can be simple and quick to put in place and usually involve a very small or no budget at all. For example, managers set up a recognition segment in meetings where anyone can give each other recognition. This type of initiative is 100% free and can be rolled out without hassle. 

The downside is that these informal methods can make it more difficult for leaders to remember to offer recognition or get in the habit of doing it consistently. These types of informal programs can easily be neglected and fall by the wayside. Also, with informal recognition methods, there is usually a missing tangible reward, which can make recognition lack impact. 

Common Challenges with Employee Rewards and Recognition Programs

No matter what type of recognition initiative you choose to launch, some challenges and obstacles will likely arise. 

Let’s discuss some of the most common challenges faced by HR professionals and leaders when launching employee rewards and recognition programs. And most importantly, we’ll cover some simple strategies you can implement to mitigate these issues and even completely overcome them.

1. Lack of participation or enthusiasm

If you're allocating a budget to this new program, employee enthusiasm and participation are obviously big concerns. You want this to be a success! We have found some simple and effective strategies that can help alleviate this concern and maximize program participation.

Create a strong internal promotion

It's important to build hype and buzz around a new initiative. It's time to remove your HR hat and put on your marketing hat. The key to success is repetition.

In short, sometimes, people must hear things multiple times for the information to stick. Don't just plan for one announcement right before launching; plan a rollout schedule that involves several announcements over multiple touch-points like email, in-person announcements, manager meetings, etc. 

Ensure senior leadership stand behind it

Rewards and recognition programs are more successful when employees see the company's senior leadership support them. This encourages employees to get involved and participate. Ensuring leaders are involved is as simple as having them contribute to creating the buzz around the program and proactively participating in recognition giving, for example.

Training and empowering managers

Managers set the tone for the company and employees; if managers don't initiate recognition, neither will employees. So, it's critical to get buy-in from them and to get them properly trained and educated on the program's components. When leadership stands behind your program, you'll have the best chances of widespread adoption and long-term success. 

2. Budget constraints

If you work in HR, you know that getting even a tiny slice of the budget for extra initiatives can be difficult. Executives are often wary of investing in programs with ambiguous ROI. Of course, HR teams will have difficulty launching recognition or reward programs if they don't have buy-in from senior leadership.

To make the hurdle of getting financial buy-in easier, we suggest you approach this conversation more logically. In short, you want to build a business case for employee recognition. To achieve this, the first thing you need to do is prove to leadership that there is a problem in the business that needs to be addressed. 

For example:

  • High turnover
  • Low morale
  • Low satisfaction
  • Low average tenure

Pro tip: You'll build an even stronger case if you can put a hard price tag on how much money the business loses due to these challenges. Hopefully, with more strategic conversations, you can free up a budget to help fuel your recognition and rewards initiatives.

3. Ensuring fairness and avoiding biases

A common worry among leaders when launching a recognition program is whether employees will get jealous of each other or will people feel it’s unfair.

While this is a normal worry, the reality is, that when recognition is genuinely earned and given in a sincere and personalized way, other employees are rarely jealous. In fact, they get behind the appreciation message because they see their peer working hard, too! 

In other words, here are a few ways to ensure fairness and avoid biases in recognition giving.

  • Train managers on what actions and accomplishments deserve recognition. This will ensure everyone gets a chance to receive it.
  • Make sure recognition messages are personalized and highlight employees' efforts.
  • Ensure peers know they can recognize each other, too.

If you find jealousy starting to brew among your employees, a deeper cultural issue is usually at play that is simply being brought to the surface. 

4. Sustaining the momentum

Like most things in life, excitement fades over time. That’s human nature. Even if your recognition program was initially well received and widely adopted, you may find that employee enthusiasm and participation fade over time. This is normal!

With a few simple strategies, you can easily mitigate this issue and ensure that people are always excited and eager to get involved.

Monitor participation

First, make sure you’re monitoring participation in the program. If you use a recognition tool like Qarrot, these analytics features are integrated into the platform. This way, you’ll always have your finger on the pulse of program involvement.

Give a refresher

When new employees and managers enter the company, they might be told about the program, but if they’re not exposed first-hand, that might lead to a dip in participation. Occasionally, hosting refresher sessions for those new employees or leaders can help keep the program's momentum up over time.

Embed appreciation into your culture

Consider making “recognition” or “appreciation” a part of your core cultural values. Have your executive and senior leaders stand behind this effort. Ensure these new cultural values are promoted and visible at various touch points with which employees interact. 

For example, the company website, social media, and office walls are emphasized at company meet-ups and meetings. When employees see that this program isn’t just a surface-level initiative but a deeper reflection of the company's values, they’ll be more likely to practice this habit continuously. 

Final Thoughts

Sharing appreciation for employees is critical. However, an employee rewards and recognition program goes beyond simply ensuring people give each other regular "thank you's." 

These programs formalize and provide a framework for the process of recognition giving; they also help embed appreciation deep into your work culture. As a result, employee recognition isn't something people passively do from time to time; instead, it's a regular habit that everyone enthusiastically participates in.

With this guide, we've not only shed light on the differences between rewards and recognition, but also provided insights into different types of programs and the challenges you may face using them in the workplace. This guide is designed to equip you with the knowledge and tools you need to succeed.

Hopefully, this brief guide will make you more confident and informed about institutionalizing a recognition program in the workplace. Subsequently, you'll be better positioned to take the next steps!

Are you looking to launch your first employee recognition program? Check out our complete guide!
The Team at Qarrot