A guide to employee rewards and recognition
Last updated: September 12, 2024
When you work hard at something, you want to feel like other people notice and appreciate your effort. Employees know they’ll get a paycheck for their work, but it’s not the same as feeling valued by the company. That’s where creating a culture of employee rewards and recognition can be valuable.
What are employee rewards and recognition?
Employee rewards and recognition are programs or initiatives meant to show employees that their work is appreciated. While the terms are related, they’re not identical:
- Employee recognition involves acknowledging an employee’s accomplishments through praise, awards, or public recognition.
- Employee rewards are material incentives given to employees, such as gifts or cash. Rewards often accompany recognition, adding a tangible element to the acknowledgment.
Why is employee recognition important?
Recognizing employees for their contributions boosts their confidence and fosters a sense of belonging within the organization. Research from Gallup and Workhuman reveals that when employers acknowledge work milestones and life events, employees are 3 times more likely to feel connected to the company culture and cared for by the organization.
Employee recognition also significantly affects mental and emotional well-being. The same study found that employees who feel recognized are 73% less likely to experience burnout and 44% more likely to thrive overall. Only 23% of employees today, however, feel that they receive adequate recognition for their work.
Why are employee rewards important?
While recognition alone can have a positive effect, rewards enhance the impact by providing something tangible. According to the Workhuman report, at companies offering financial rewards, employees are 30% more likely to feel a strong sense of belonging and 41% more likely to see growth opportunities. This translates to higher job satisfaction and a 28% greater likelihood of recommending their company as a great workplace.
Benefits of implementing an employee rewards and recognition program
Happier employees lead to a more successful organization. According to recent research, companies with strategic recognition programs have 41% higher retention and 34% higher employee engagement than those without such programs. Additionally, such companies are 12 times more likely to have strong business results. A separate study reveals that 63% of employees would prefer to work for a company that regularly praises good work over one that offers higher pay but no recognition.
In short, meaningful recognition and rewards improve performance and reduce hiring and recruitment costs.
“Pay and basic benefits aren’t the endgame. You need to be actively listening to what employees need and want. One of our first added benefits was providing Uber credit for rides, so people could get a ride for work or for fun. We wanted employees to spend the credits however they wanted to use them.”
Ryan Carter, Founder and CEO, Parachute Media
How to design a holistic rewards and recognition program
To maximize the benefits of employee rewards and recognition, strategic planning is essential. Here are 7 steps to help you design an effective program:
1. Start by gathering employee feedback
Your program should revolve around employees’ preferences. Solicit suggestions for the types of rewards and recognition they value most. Use this information to shape the program’s design.
2. Determine your criteria for successful performance
Set clear, measurable goals for your rewards and recognition program. Identify the KPIs (key performance indicators) that’ll help you track the program’s success.
3. Define how recognition and rewards will be provided
Decide how employees will earn recognition and rewards. Options include management discretion, specific performance goals, or a points-based system. Consider whether to hold an annual awards ceremony, announce achievements in a newsletter, or offer rewards digitally or in person. Many companies use employee recognition software to manage points-based systems, virtual feedback, and reward options.
4. Specify your rewards
Choose rewards that employees will truly appreciate. Generic rewards like branded items might not resonate with everyone. Instead, offer a range of options so employees can select what matters most to them.
5. Develop a communications plan for the program
Determine the best way to introduce the program to employees, whether through emails, webinars, or meetings. Make sure the communication clearly conveys the program’s benefits and encourages participation.
6. Collect employee feedback on the program
After the program is implemented, find out from your team how effective they think it is. Encourage employees to share their thoughts and suggestions for improvement.
7. Evaluate the program’s impact
Regularly review the KPIs and feedback to determine if the program meets its goals. Be prepared to make adjustments based on this evaluation in order to meet employee needs better and improve outcomes.
Employee reward and recognition ideas
Successful programs recognize employees in ways they appreciate and provide rewards they value. Here are some ideas:
Public recognition
Service award programs, employee awards ceremonies, or company-wide announcements allow employees to shine in front of their peers. This can boost morale and foster a positive work environment.
Social recognition
To avoid perceptions of favoritism, implement social recognition, where employees can recognize one another’s successes. This lateral recognition can improve team morale and collaboration.
Monetary rewards
Cash, gift cards, vouchers, or other monetary rewards are always appreciated. They provide flexibility, allowing employees to spend their rewards as they choose. An Uber gift card or voucher offers an opportunity for a fun outing, for example, while cash might be spent on necessities.*
Gifts and experiential rewards
Consider personalized gifts or experiences that align with employees’ interests. Options could include a stylish watch, a gourmet gift basket, or tickets to a concert. These thoughtful rewards show that you understand and value your employees as individuals.
Expanded benefits
Tying rewards to employee benefits is another effective strategy. Extra paid vacation time or incentive-based bonuses, for instance, are popular choices that demonstrate your commitment to employee well-being.
Reward your employees with Uber for Business
Implementing a successful rewards and recognition program requires intentionality and investment, but the benefits far outweigh the costs. To simplify the process, consider using Uber for Business, which offers easy-to-administer rewards that employees will love. With Uber gift cards and vouchers, employees can enjoy convenient transportation or a delicious meal delivered right to their door. The Uber for Business platform also makes it easy for HR to manage and track expenses, ensuring that your rewards program stays within budget.
Elevate the employee experience with flexible perks that support recruiting, productivity, and retention goals—all in one place. Get started today.
Disclaimer: Gift cards in US dollars are issued by The Bancorp Bank, N.A.
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