What Are The Benefits Of Employee Recognition?
Recognizing your employees for a job well done is vital for company success. Nectar surveyed 800 employees in the United States to uncover some intriguing insights about the state of employee recognition and the many benefits it produces:
- 83.6% of employees believe that recognition motivates them to succeed at work
- 77.9% would be more productive if their employer recognized them more frequently
- 81.9% of employees agree that recognition for their contributions improves their engagement
Yet, even with these undeniable business advantages, only 52.6% of employees surveyed have formal employee recognition programs at their company.
What Employee Recognition Mistakes Do Companies Make When Acknowledging Their Team?
When organizations do recognition well, it can positively impact your employees and your bottom line. You'll have hard-working, motivated employees who want your business to succeed. But for your entire company to feel excited about your recognition program in the long term, you'll need to avoid the following 12 common mistakes:
Mistake 1: Not Getting Buy-In From All Stakeholders
Everyone in your organization, from company leaders down to individual contributors, must believe in the power of employee recognition and fully embrace your program. Otherwise, recognition may be inconsistent across the board, and you could quickly lose engagement and momentum in this vital initiative.
Unfortunately, many programs fail to drive impact due to a lack of buy-in from stakeholders. For example, a Gallup study of 7,500 US employees reveals that 81% of leaders don't believe recognition is a strategic priority for their organization, and nearly 2 in 3 companies don't have a budget allocated to recognition.
But lack of budget shouldn’t be a barrier to appreciating your employees. Simon Berry, a recognition expert and consultant, explains some of the best forms of recognition are entirely free and, therefore, accessible to all types of organizations:
“From my perspective, one of the most powerful forms of recognition is peer-to-peer—thanking and congratulating another colleague. It costs absolutely nothing to do it. That “Well done, I really think that was a brilliant contribution you made to that meeting,” taking the opportunity to reflect and say, “What you said in there was brilliant, you’ve changed the process, you’ve changed the mindset,” whatever it is, it costs nothing.”
Gaining buy-in all comes down to communication. Present the benefits of an effective recognition program to everyone in your organization, and ensure they understand their role in its success. Once you have results to share from an existing program, obtaining a budget for this initiative should also be easier.
Mistake 2: Not Setting Goals For Your Employee Recognition Program
Why are you implementing an employee recognition program? Being clear on this question is vital before launching or revamping your strategy as it’ll enable you to decide which progress metrics to track, such as:
- Who is using the program?
- What behaviors you're rewarding?
- How does your recognition strategy impact employee engagement?
Employee recognition can drive many positive business outcomes beyond simply making someone happy. HR leader and consultant Debra Corey encourages companies with recognition programs to think outside of the box:
“Employee recognition has so many amazing powers, but there’s a lot of people that only see it one-dimensionally. No matter who you are or what your business does, I would be very surprised if recognition could not tick the box of at least one, two, three of your overall objectives.”
A Gallup report on “From Praise to Profits: The Business Case for Strategic Recognition” reveals that recognition is linked to other key measures of financial success, such as:
- Increased productivity
- Decreased safety incidents
- Lower absenteeism
Select your goals and the metrics you'll use to track them, then continuously monitor the results of your employee recognition program.
Mistake 3: Not Involving Your Employees In Your Program
Defining and aligning your recognition goals with your business objectives should involve listening to your employees. But this is a missed opportunity for too many companies.
Use regular one-on-one meetings, employee engagement surveys, and pulse questionnaires to check in with your workforce and learn what matters to them, and how you'll use your program for their benefit. Regular recognition can support your workers in:
- Building teams: Encouraging collaboration and constructive dialogue between teams.
- Abolishing silos: Breaking down barriers between departments.
- Developing culture: Encouraging and creating a positive, productive company culture where everyone feels appreciated for their work.
- Eliminating workplace bullying: Taking a stand on unprofessional behavior and creating an environment of tolerance.
Not involving employees in your recognition program will prevent your teams from feeling connected to it. Instead, keep communication lines open and forge meaningful relationships with your team members to boost employee engagement and drive positive business outcomes.
Mistake 4: Not Recognizing Employees Frequently
Your recognition efforts can get off-track when your program has no regularity. But knowing how frequently to recognize employees is another roadblock; as HR leader Debra Corey explains:
“I get a lot of questions like, "Can you ever recognize too often? If I recognize someone on Monday and on Tuesday, they do a great job on something different, is that going to cause problems?”
The answer is no. The more frequently you can deliver employee recognition, the better. Encouragingly, around 49% of workers receive appreciation on a daily or weekly basis, according to Nectar's survey. However, more than a quarter only receive acknowledgments for their work in a quarterly or annual employee recognition program. Gallup data reveals what happens when recognition is infrequent.
If leaders only give employees recognition a few times each year, they’re:
- 5x as likely to be actively disengaged.
- 74% more likely to say they do not plan to be at the organization in one year.
- 27% more likely to be struggling at work.
If peers only give recognition to each other a few times each year, they’re:
- 3x as likely to be disengaged.
- 39% more likely to say they don't plan to be at the organization in one year.
- 24% more likely to be struggling at work.
Build your recognition strategy knowing employees want their leaders and peers to acknowledge and reward their successes and contributions consistently.
Mistake 5: Not Personalizing The Recognition
No two employees are identical, and your recognition system should reflect that. A Deloitte study highlights that personalized recognition has double the impact of generic feedback—this means adding context and details about the ideal employee behaviors you're rewarding and why.
Take care to personalize both the content and the delivery of your recognition. For example, do your employees prefer to receive private or public recognition?
Simon Berry elaborates on this point:
“Every single human is different. Everybody has a different interpretation of recognition, what's right, what's wrong for them. A lot of it is driven by the people they work with—their peers, their line manager, and how he or she interacts with them. And some people might think, "Oh, I loved that they pulled me up on stage and recognized the work I'd just done." Another person will say, "There's no way he's getting me on that stage; he's going to embarrass the life out of me."
Gallup research indicates that:
- 29% of employees prefer private praise.
- 7% crave acknowledgment in a public setting.
- 64% prefer a mix.
But only 10% of companies go the extra mile by asking employees their preferences. Join them by establishing yourself as an organization that recognizes your employees as individuals.
Mistake 6: Not Incorporating Flexibility Into Your Rewards Program
Dishing out blanket incentives will miss the mark with some of your employees. As Debra Corey puts it:
“We focus so much on that recognition award, and we don’t focus on how the person is going to feel at the end.”
For example, companies offering an elaborate gold watch as a token of long-term service might be out of touch with employees who don't wear a watch or would prefer to select their own reward. Likewise, prizes such as vintage wine or whisky might be appreciated by one employee, whereas others who don't drink alcohol might prefer exclusive movie tickets, a hotel voucher, or a monetary reward.
Nectar Tip: Extend the theme of personalization by using Nectar’s rewards system to meet each employee's needs. Choose from a direct Amazon integration, a catalog of gift cards, branded company swag, charity donations, or customized rewards.
Mistake 7: Not Celebrating Failures
Not all employee efforts will result in business success—and that’s okay. Every failure is a learning experience and must be recognized as such. From product design to NASA's space shuttle program, every winning organization follows the same pattern: persistent practice and experimentation, punctuated by failures. So when an employee fails at something, take a moment to celebrate it. Encourage them and thank them for trying something new.
A Harvard Business Review article on “Strategies for Learning from Failure” details how pharmaceutical company Eli Lilly has held failure parties since the 1990s to “honor intelligent, high-quality scientific experiments that fail to achieve the desired results.”
Follow their example by rewarding employees who take ownership of their mistakes and learn from them. Acknowledge the effort behind these lessons, whether through public recognition or a unique reward.
Mistake 8: Not Investing In High Performers
Delivering consistent recognition can be challenging across varying ranks, positions, and performance levels. But recognizing employees in a balanced way must include motivating everyone to stay engaged in their work without pushing themselves to the extreme.
Melanie Naranjo, VP of People at Ethena, explains what happens when leaders and business owners willingly dish out recognition but neglect the needs of high performers.
“High performers volunteer for projects. They go the extra mile. They get things done, and they get them done well. Instead of investing in our high performers, we trust them to keep chugging along effectively and divert all our time and energy to our underperformers.
Eventually, the cracks start to show because the more work higher performers take on, the more we praise them. The more they shield us from challenges, the more we perceive them as self-sufficient. The more projects they execute with minimal issues, the less attention we pay to opportunities for improvements. And high performers start to get the wrong message. They start to define high performance as:
- Always saying "yes" to every project, no matter what.
- Never acknowledging any challenges.
- Figuring everything out for yourself so that you never have to use up anyone else's time.
And then one day we look up and ask ourselves in complete shock why our highest performing employees are all burnt out, disengaged, and starting to let things slip.”
Ensure you're not using recognition as a substitute for investing in your people. High-performing employees need your attention to stay happy, fulfilled, and engaged. Provide them with resources they need to succeed, such as training and career development opportunities, and track their workloads to ensure no one is taking on too much.
Mistake 9: Not Giving Meaningful Recognition
Messages of recognition should be genuine and heartfelt for your employees to believe in them and feel continuously motivated. Automated or generic recognition will come across as lip service, as Matthew Phelan, Co-Founder of the Happiness Index, agrees:
“A techie could easily write an email that goes out every week thanking their team, but obviously, that’s not going to work.”
Small business coach and consultant Henry Lopez explains how some businesses go through the motions of giving recognition to their employees:
“It has to be as genuine as possible; it has to be something that has some meaning or people read through that pretty quickly. You see at a lot of poorly-run fast-food restaurants—the plaque of the “Employee of the Month," or you'll go somewhere and see the soaring eagle poster. There is no meaning behind it, the owners don't really believe it; it's just something they think they're supposed to do."
Unfortunately, Gallup research reveals only one-third of employees “strongly agree” that they receive authentic recognition. Unsurprisingly, this has a ripple effect on how employees think about their organization. When employees receive impactful recognition from the heart, they're 6 to 8x more likely to believe that their organization cares about wellbeing.
Mistake 10: Not Making Recognition Equitable
Favoritism towards certain people or teams will quickly erode workplace morale. Equitable recognition is vital to cultivating a healthy working environment and preventing feelings of inequality or injustice. Unfortunately, only 26% of employees "strongly agree that feedback is equitable," with white employees 50% more likely to report that recognition is equitable than their black peers.
Keep the following groups of people in mind when crafting your recognition program to ensure their input is acknowledged appropriately:
- Remote and hybrid workers: Proximity bias may sway how leaders treat non-office workers.
- Minorities: Ensure recognition isn't closed off from minority groups or anyone with a different background and perspective.
- Younger workers: Avoid patronizing or talking down to the younger members of your team as you acknowledge their hard work.
- Frontline employees: Client or guest-facing employees are the face of your business; don't overlook the importance of their customer relations skills.
On this last point, David Novak, former CEO of Yum Brands, recalled how a conversation about an exceptional and long-serving employee named Bob turned his focus toward recognition after his colleagues praised him:
"Bob taught me more in four hours than I learned in my first three years here. Bob is so good, you should see him with customers. You go into Bob's stores, the displays look fantastic, nobody's better than Bob, he's amazing.” I looked across the table, and said, "Bob, why are you crying?" and he said, "I've been in this company for 47 years, I'm retiring in two weeks, and I didn't know that people felt this way about me." That just hit me in the gut. This guy's obviously the best at what he does. Just think, if people had paid attention, he could have done even more. From that day forward, I made recognition of frontline employees the number one behavioral driver of any culture I was a part of building."
Your employees are the lifeblood of your business. Take the time to recognize each of them and the unique contributions they make.
Mistake 11: Not Acknowledging Smaller Wins
Large wins such as project completions, new contracts, and promotions should always be celebrated. But not at the expense of recognizing the smaller, consistent contributions that keep your business growing. These actions are typically less glossy, but they still deserve to be celebrated.
Example: An individual contributor who goes above and beyond to help a colleague with an unfamiliar task or regularly offers valuable feedback in team meetings may not get the same recognition as the person who closes six-figure deals.
Aoife O'Brien, founder of Happier at Work, explains why she's behind the practice of identifying positive behavior:
“I like this concept of catching someone doing something right and recognizing them for it rather than the typical, easier response to catch someone doing something wrong because you know what needs to be done.”
Make an extra effort to spot and reward the understated but exceptional behaviors that happen daily. Get into the habit of appreciating the employees who always provide timely project updates or approach every business hurdle with an open mind and creative spirit.
Focus your attention on recognizing and reinforcing these patterns. Think about it, it's not easy for an employee to replicate the act of closing a six-figure deal. Employees will get better at it, but it can't be done daily. On the other hand, employees can easily replicate behaviors like helping with a project or keeping up with their receipts. So when you consistently recognize small behaviors that lead to significant results, your team will want to replicate those behaviors often.
Mistake 12: Not Embedding Employee Recognition In Company Culture
Employee appreciation shouldn't be treated as a separate practice or program—it should be a way of life.
Sadly, Gallup data confirms that fewer than 1 in 5 employees consider recognition an important part of company culture.
Workplace recognition shouldn't only take place from the top down. Once managers and executives are on board with embedding employee recognition in company culture, teams must foster a collaborative, supportive environment that allows each other to feel seen and heard.
Building a culture of recognition where everyone is appreciated will create an environment where employees thrive, and your business succeeds.
- Incorporate resources on employee recognition into your onboarding process, in your company handbook, and make appreciation a workplace norm.
- Once an employee has been with the company for a while, continue to show the importance of recognition. Programs like Nectar ensure that recognition happens often. Points are reset every month to get employees to provide praise throughout the year.
- When an employee is ready to leave, you also have a few moments to show your gratitude. Let employees know that you will be there for them after they leave. If it makes sense, you can even write them a LinkedIn recommendation. Privately, you could also send each person who leaves a quick email to let them know what their time with your organization has meant.
Overall, you want to ensure that employees understand their value and get the credit they deserve throughout their time with you.
Design An Effective Employee Recognition Program With Nectar
Avoid all these common staff recognition mistakes (and more) by building a simple and frequent program with Nectar. Our Recognition tool encourages meaningful shoutouts and enables employees to embrace your company values daily. It works as follows:
- Step 1: Peers and leaders tag an employee and write a personal shoutout to them.
- Step 2: They add Nectar points for the recipient to save or redeem.
- Step 3: They attach a core company value they recognize in the recipient to keep these top of mind every day.
Ready to overhaul engagement in your recognition program? Book a demo of our employee recognition software with Nectar today.