How to Craft the Best Employee Recognition Programs, The MDC Group

What motivates employees besides pay and benefits? Most people say money motivates them, but studies show it’s not that simple. While earning enough money to meet their basic needs matters, everyone also needs to feel appreciated, and companies must understand how best to demonstrate that appreciation. Recognition programs have historically been based primarily on years of service benchmarks, and there was a time when that was important, but that isn’t what works today. Celebrating work anniversaries is great, but smart companies recognize their people for individual accomplishments and personal milestones.

A recent Forbes study found that 87% of current recognition programs are focused on tenure, yet such recognition has almost no influence over employee retention. Team members are not likely to stay with a company another year to get a 10-year commemorative watch or even a bonus if they aren’t happy in their jobs. Employees want to be seen and appreciated as individuals. Understanding the psychology behind recognition can be the key to building a successful recognition program.

The Psychology of Recognition

In his 1943 publication “A Theory of Human Motivation”, Abraham Maslow’s hierarchy of needs’ shows three of the five basic human needs concern social and psychological requirements. After the basic requirements for food, water, shelter, and safety come the needs for inclusion and belonging, esteem, and self-actualization. In other words, people need to feel they are being their best selves, belong to a group, and are appreciated. There’s a physiological component, too. Feeling appreciated causes our bodies to release oxytocin, a hormone that improves mood and enhances performance. By building a recognition program based on the basic psychological needs, a company motivates team members and helps them accomplish more.

What to Recognize

Recognizing someone for being on the team for a certain number of years is important. Staying with the company does mean they are loyal, have accumulated knowledge and experience, and helped achieve company goals. However, that kind of recognition is so expected that it doesn’t do as much to motivate people and help them feel appreciated as it used to. Years of service awards need to be part of a more extensive company program.

Some of the many other things employers can recognize include:

  • Educational accomplishments
  • Extraordinary efforts
  • Ideas and suggestions
  • Improvements
  • Recruiting
  • Personal events
  • Customer relations
  • Good works

How and When to Recognize and Commemorate

Annual Meetings or Awards Ceremonies

The most traditional time to recognize team members is during a yearly event like an annual meeting, awards night, or company picnic or retreat. These events often include family members who can join the celebration and cheer for the award recipients. Organizations award plaques, clocks, watches, and jewelry according to a preset plan for years of service. Sales awards might be given to the top salesperson or team. Suggestions or safety awards might be part of the event. Perhaps bonuses or prizes are involved. These annual events are important for company moral and cohesiveness.

If a company has weekly or monthly meetings, building in a few minutes to recognize individual accomplishments and milestones can be a simple but effective way to reward people. Give supervisors or team leaders a list of things to look for and have them submit information before the meeting about what recognitions they want to be included. This activity has the bonus of promoting more interaction and better communication between team members. For example, a leader needs to be aware of who has gotten engaged, completed a class, learned a new skill, participated in a charity event, or gone above and beyond during a project. The increased communication alone improves a group’s cohesiveness, reinforcing the feeling of belonging.

Unplanned Recognition

According to a study by Quantum Workplace, almost half of workers surveyed prefer rewards and recognition that are not preplanned. Companies should encourage team leaders to watch for opportunities to recognize good work in real-time. By mentioning someone’s accomplishment during the morning meeting or sending a quick thank you email or memo to them, you instantly boost the person’s morale and bolster their self-esteem. Companies can design recognition campaigns with titles and some collateral materials like posters and printed pens, or other small gifts. Something as simple as handing out pens reading “Great Work, Thanks from XYZ Company” or “XYZ Appreciates What You’ve Done” can encourage and reinforce positive behavior.

Campaigns can even allow and encourage teammates to recognize one another, either at work, on a social media platform, or on a virtual or physical “cork” board. In addition, there are companies specializing in recognition programs offering software choices. Peer-to-peer recognition can be highly effective, and it’s a great way to build team camaraderie. People need to feel like they belong and being accepted and praised by other group members reinforces those feelings. For businesses where employees regularly interact with customers, allowing customers to submit positive feedback also helps recognize accomplishments and good work.

Initiatives and Campaigns

Organizations can set a company goal and build a campaign around it. Whether it wants to improve safety records, hire more people, generate new ideas, or get more people to help in a community project, it can build a recognition campaign to help achieve goals. Usually, the initiative is time-limited, might have a campaign name or theme, and has some rules and participation instructions. Some companies monetize suggestions or ideas that save or make them money. Others distribute prizes, gift cards, or cash bonuses as part of the recognition. While people appreciate and enjoy these things, being told by their team that they have accomplished something often means as much or more. According to Psychology Today, 70% of people surveyed in one study said the most meaningful recognition had no monetary value.

According to the Forbes article, companies spend between 1 and 2% of their payroll on employee recognition, but too much goes for years of service awards. Annual awards dinners are fine, but people need to feel recognized and appreciated more often and for their individual accomplishments. They want to know they belong and are valued on a team. Companies should acknowledge any efforts or achievements they want to encourage and any personal milestones an individual might celebrate. Recruiters will tell you employees want to work for companies with positive atmospheres where they are valued as people, and their efforts are noticed and recognized. Well-designed programs ensure that team members are recognized consistently and often.


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