A guide to employee rewards and recognition
Last updated: January 22, 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 that’s not quite the same as feeling as if the company appreciates their contribution. 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 any programs or initiatives meant to show employees that their work is appreciated. While employee rewards and recognition are related and often go hand in hand, they’re not quite the same thing:
- Employee recognition is about acknowledging an employee’s accomplishments, often through praise, awards, or public recognition.
- Employee rewards are material incentives you give employees, like gifts or cash amounts. Rewards are a common form of employee recognition.
Why is employee recognition important?
When an employee knows that their input is understood and valued, it can boost their confidence and provide a sense of belonging in the organization. Research from Gallup and Workhuman found that when employers address work milestones and life events, employees are 3 times as likely to feel connected to the company culture and feel like the organization cares about their well-being.
Employee recognition can also have a big impact on their mental and emotional well-being. The same study found that when employees feel their work is recognized, 73% are less likely to experience burnout and 44% are more likely to be thriving in their life overall. But only 23% of employees in the survey strongly feel as though they’re getting recognized the right amount for their work now.
Why are employee rewards important?
Recognition on its own can go a long way, but rewards attach something tangible to the gesture. That makes a difference. The same Workhuman report notes that at organizations that offer financial rewards, employees are 30% more likely to strongly feel they belong and 41% more likely to say they see a path for growth. That adds up to higher overall satisfaction with the workplace—and they’re 28% more likely to recommend their company as a great place to work.
Benefits of implementing an employee rewards and recognition program
When employees are happier, the organization benefits as well. Deloitte reports that employee engagement, productivity, and performance are 14% higher at organizations that have recognition programs.
These programs can also lead to improved retention. In Workhuman’s survey, employees who didn’t feel their work was appropriately recognized are 4 times as likely to be looking for a new job. Making sure rewards are in the mix matters here, as Workhuman also found that financial rewards were 20% more effective than virtual thanks at decreasing turnover.
In short, providing employees with meaningful recognition and rewards improves performance, while saving you money on hiring and recruitment.
“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 safely 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 get all the benefits of providing rewards and recognition to employees, you need to be strategic. Following a few best practices can help:
1. Start by gathering employee feedback
Your program should center around employees. To make sure your rewards and recognition program matches their preferences, start by listening to their input. Solicit feedback on what kind of rewards and recognition they value most, then design the program based on what you learn.
2. Determine your criteria for successful performance
Define your goals for the rewards and recognition program. What do you most want it to accomplish? Be specific and select measurable goals. Then identify the best KPIs (key performance indicators) to track how successful the program is based on those goals.
3. Define how recognition and rewards will be provided
Now think through how the program itself will work. How will you decide when employees earn recognition and rewards? For instance, you could leave it to the discretion of management, tie it to specific performance goals, or develop a points-based system.
Also consider how recognition and rewards will be provided. Do you want to set up an employee awards ceremony each year or announce outstanding employees in the staff newsletter? Will you provide employees a way to select whether their rewards are to be delivered straight to their home or by email? Or will managers distribute rewards to employees in person?
Some companies choose to invest in a technology platform to help with this part. Employee recognition software can help you establish and track a points-based rewards system, enable virtual feedback and recognition, and/or provide a way to give employees choice over their rewards options.
4. Specify your rewards
When selecting which rewards to offer, try to think about what employees will genuinely want and value. If you give branded tote bags to employees who already have a closet full of totes at home, it won’t mean much to them. Aim to select rewards that will have fairly universal appeal. Even better, consider giving employees multiple options to choose from so that they can select something meaningful to them.
5. Develop a communications plan for the program
When your program is ready to launch, determine the best way to let employees know about it. What communication format makes the most sense at your organization? You could distribute a detailed email, schedule a webinar, or have management announce it in a team meeting. And consider how best to convey the program’s benefits to employees. You want them to understand that the program is for them and meant to make their experience better. Good communication is key to getting that across.
6. Collect employee feedback on the program
One of the best measures of the program’s success will be whether employees are happy with it. Once the program is active, ask employees to weigh in on how it’s working. Try to understand their general feelings about the program, and encourage them to give specific feedback and suggestions on how to make it better.
7. Evaluate the program’s impact
Gathering employee feedback will be a big part of evaluating the program’s impact, but you’ll also want to check the KPIs you established at the beginning of your strategy. How well is the program helping you achieve your goals? Be willing to adapt the program’s particulars as you go, to better meet employee preferences and improve results.
Employee reward and recognition ideas
Providing recognition in a form employees appreciate and rewards they genuinely like is essential to your program’s success. This can take a few forms:
Public recognition
While it’s possible to provide recognition privately, as in one-on-one meetings between employees and managers, providing public recognition gives employees a chance to shine in front of their colleagues. Public recognition can happen through formats like service award programs, an employee awards ceremony, or employee achievements shared in company-wide announcements.
Social recognition
If recognition comes specifically from executives and managers, some employees may feel that their bosses are showing favoritism. Social recognition involves giving employees the chance to recognize one another—laterally rather than hierarchically. Giving employees a platform for highlighting the accomplishments of colleagues can be good for morale and team building.
Monetary rewards
Money is an obvious reward that employees will always appreciate. You can stick with cash (plain and simple), or you can offer gift cards or vouchers for brands and services that you know employees like. The latter can increase the odds that they’ll put the reward toward something fun rather than something necessary. An Uber gift card or voucher gives an employee the opportunity to splurge on a nice restaurant, where the same amount in cash could just end up going toward bills.*
Gifts and experiential rewards
If you know what particular employees might like, selecting gift items or offering prepaid access to an experience are also strong options. Gifts could take the form of a nice watch, a gift basket, or an indoor plant to spruce up their office—anything you’re confident that that particular employee will appreciate. Experiential gifts could include tickets to a show, a cooking class, or a trip to a winery.
Expanded benefits
Another option is to tie rewards to more typical employee benefits. Everybody appreciates extra time off, so giving employees more paid vacation time can make for a popular reward. And incentive-based bonuses are a tried-and-true reward for a reason. Getting an extra payday will always make employees feel good.
Reward your employees with Uber for Business
Implementing a well-designed rewards and recognition program requires investment and intention, but the benefits make these programs worthwhile. One way to simplify the overall process is to stick with rewards that are convenient for your team to provide, manage, and access.
Uber gift cards and vouchers have the double benefit of offering rewards that are easy to use and anybody can appreciate: gifted rides wherever employees want to go, and complimentary food for delivery from their favorite restaurants. With Uber for Business, anyone authorized can send an exceptional employee a gift card or voucher in a few simple steps. Accessing the gift is equally seamless for the employee. And for HR, the platform automatically tracks expenses as you go, to help you keep your rewards program on 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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