1. What Are Employee Recognition Programs?
2. The Psychology of Recognition
3. Ways to Recognize Employees
4. Bonuses
5. Types of Recognition 
6. Frequency of Recognition
7. Designing an Appreciation Program
8. Increasing Engagement and Productivity
9. Resources to Improve Engagement

What Are Employee Recognition Programs?

Employee recognition programs are important for organizations because they keep employees engaged and feeling like they are valued. In turn, companies experience less turnover and receive better performance from employees. Recognition can be given out at all levels of a company from managers and supervisors, peers, senior leadership, and customers. So it behooves a company to create an employee recognition program to increase engagement and create a positive work environment.

An estimated 1-2 percent of company payroll is spent on recognition supplies like awards, pins, plaques, and other tokens of gratitude. The history of recognition stems from the start of the 20th century when labor unions made company managers award employees for their service and provide a raise in their hourly rate.

Implementing an appreciation program does not have to add any significant costs or unnecessarily burden the management. Taking the time to craft a program with small gestures to show employees are valued is a smart overall investment. Employees who are valued are motivated to do better work and get more work done. They will also stay engaged and work for the company over a longer period of time.

The Psychology of Recognition

In the workplace, receiving a paycheck and benefits meets fundamental human needs. But this is not enough. Recognition inspires individuals to do more for an organization and makes them feel appreciated. Feeling better about the work being done leads to increased work performance and trust. Organizations that thank their employees on a regular basis have a higher overall performance than those not making a regular practice of employee recognition.

Increased performance is reflected internally as well as externally. Customers who come in contact with happier employees are more likely to return. The top 20 percent of companies that choose to prioritize employees decrease the likelihood of employee turnover by 32 percent.

Regular recognition and feedback gives an employee a better idea of their performance and indicates where they need to improve and how they can continue benefiting the organization as a whole. It boosts morale around the organization too.

But recognition is no good if employees only receive it from their peers. Without recognition from management, engagement from employees plummets, as does the performance. 

Ways to Recognize Employees

An employee recognition system that starts from the management down is one way to keep employees engaged and feeling that they are valued in the workplace. In this system, management observes the contribution of the employee and rewards it. 

Employees who continually contribute to a company over years of work may appreciate years of service awards. A company may choose to give these out when employees reach milestones like 20 years of service or once every 5 years. Award ideas for years of service awards include:

  • Certificates
  • Company greeting cards
  • Engraved item such as pens, award statues, or trinkets

Organizations have also been known to dedicate a day to appreciate their employees. Days like this include a company lunch, theme park visit, or having treats brought to employees like coffee, in-office massages, performances, and others. 

March 1 is the official Employee Appreciation Day. It is a semi-formal holiday started by a man named Bob Nelson, He's a board member of the company Recognition Professional. Since Employee Appreciation Day began, other organizations have used this day as a way to appreciate employees. 


Companies also might use a monetary bonus as a way to show their appreciation for the work of their employees. A bonus is paid to the employee in addition to their regular yearly salary or payment schedule. There are three types of bonuses:

  •  Yearly
  •  Quarterly
  •  Spot

Yearly bonuses are usually paid out in the fourth quarter at the end of the fiscal year. The bonus is given to the employee as a reflection of the employee's contributions or works during the year. An organization may opt to pay out a bonus based on its performance too.

Quarterly bonuses are paid out more often, typically 4 times per year compared to annual ones. Organizations that specialize in sales often pay quarterly bonuses to provide increased sale incentives to their employees.

Spot bonuses are smaller in amount and reward employees for things like productivity, turning in items early, or exceptional performance. These bonuses can also be given by a manager or supervisor to an employee as a direct recognition of the employee's work.

Types of Recognition 

Peer-to-peer systems allow everyone in an organization to recognize the contributions and accomplishments of colleagues. This includes managers and peers. These systems allow managers, supervisors, and employees to give recognition at will.  An example of such a system might involve the awarding of a small item like a gold star that is, in turn, exchanged for items of value. Offering recognition verbally is another example. It is a long-standing and effective way of recognizing a peer at work without a lot of effort. It's usually given by colleagues to highlight a recent effort.

Micro bonuses are a lightning quick way of giving a monetary bonus. Like with a spot bonus, micro bonuses are given in the moment for a contribution. They are given to other colleagues, from managers to those under them and vice versa. Since micro bonuses are small payments to individuals, they can be made on multiple occasions without altering an employee's regular payments from an organization.

Frequency of Recognition

Recognition is time-sensitive. When offered right away, it is immediately associated with the contribution that prompted it. Without providing recognition right away, employees will spend more time than is necessary believing that their contribution wasn't valued. Or they think that they didn't contribute to the project in a significant manner.

The more frequently recognition is given to someone, the more effective it is, especially since employees contribute in a variety of ways throughout the work week. Used in combination with feedback, recognition is made and rewarded immediately as opposed to waiting. Regularity is also crucial. Without regular feedback and recognition for accomplishments, an employee feels undervalued in the role that they serve. For example:

"Thank you for calling the client Jane. Without your follow-up, this project would have remained open and uncompleted."

By recognizing the skills that an employee used, companies motivate them to find new ways to use those skills, which benefits everyone. Colleagues are also more likely to recognize these contributions the next time and be prepared to make their own contributions

Designing an Appreciation Program

An appreciation program provides the opportunity for public recognition. This often increases the impact of the contribution and gives co-workers an opportunity to participate in recognition. It is more likely that others will contribute to the organization after seeing another person recognized. Tips for designing an effective recognition program are:

  • Expand the program design to involve the most diverse population in the organization.
  • Create transparency to increase the likelihood of participation and produce excitement.
  • Maximize involvement in program design, where you can involve a diverse a group in the design of a project.
  • Make it possible for everyone to participate regardless of level or department.
  • Keep the process of giving spot awards easy and make them readily available.
  • Nominations should be simple to make using a designated process.
  • Explain the program in person prior to implementing it. 
  • Make spot award programs easy, informal, and accessible.
  • Have employees make their own rewards program.
  • Talk about the program in team meetings.

Introduce your appreciation program to new employees when they join the company. Continually promote achievements and recognition to encourage employees to use the new program and use items or events as an incentive.

Increasing Engagement and Productivity

In addition to creating a recognition program, there are other ways to keep employees engaged and make them feel recognized. Let employees choose their own projects and work as much as possible.

Supporting their continuing education is important too. For companies that have the means, offer scholarships or reimbursements for courses. Low-cost ideas include finding and distributing free courses, offering mentorships from higher level executives, and letting employees lead an office in-service or course to increase engagement and growth.

Company meetings, retreats, and fun days should incorporate the ideas of employees. Increase engagement and fun by putting up a bulletin board where people can post items for sale, child care or pet needs, or those renting or in need of housing.

Mark birthdays and company anniversaries in the office or send out notifications online through email. 

Host an annual awards event where employees can receive recognition for their yearlong actions in the company. The awards committee should be represented by each part of the company at all levels, and the committee should be changed out each year. Be sure to include former winners. The annual awards should be a celebration of everything that has gone on during the year.

Use creative opportunities like logos or designs to host a design contest and increase company-wide engagement.

Provide training to people in the company so that they will be able to recognize when their colleagues are making contributions. If the contribution is something like a best practice, encourage employees to submit them to management for consideration as a company-wide improvement. 

Communicate with staff about recognitions so that team leaders and managers are aware of the achievement on their team. Continually promote achievements and recognition to encourage employees to use the new program and use items or events as an incentive.

Resources to Improve Engagement

Many Apps are designed to make company communication, collaboration, and recognition easier. Choose one or any combination of them to make your experience with employee recognition a smoother one.

Bonusly Analytics gives employers the ability to determine which employees are contributing and stand out in the crowd. Plus, it also reveals the employees who need extra help. It uses social data created through the giving of micro bonuses. 

Bonusly has a blog that covers:

  • Employee reward ideas  
  • Employee engagement 
  • Inspiring employee loyalty 

It also offers interviews with industry experts and articles. Other publications cover everything that there is to know about HR and employees including how to recognize contributions.

Slack, a team messaging app, makes communication among individuals and teams much easier than email. Bonusly, an employee recognition guide, works within Slack. It sends out activities to a team and allows micro bonuses to be awarded without stopping work. 

HipChat is another messaging and video app that also offers communication and includes the ability to share files and search. It has the ability to broadcast appreciation from staff and micro bonuses can go directly to the employee inside the app.

Yammer's social network is built for business use. It encourages connections and the sharing of information.  Yammer has file sharing, user profiles, and a feed. Its Bonusly integration uses peer recognition features to broadcast them out to the company.

Small Improvements simplifies feedback and reviews by offering both in the program. It also offers communication and goal tracking. Its Bonusly features show an employee's contribution during reviews, so there's no need to look for them.

Office Vibe works with Slack and features a bot called Leo that encourages communication without interrupting work. It also sends out surveys to employees asking how satisfied they are and encouraging engagement. It even offers advice!

When I Work is a scheduling and communication application. It assists with communication between management and hourly employees. It offers tips for recruiting new employees, helps onboard them, and gives advice on how to better manage people.

TLNT is a publication that features HR news and insight from HR basics, to more complicated subjects like on boarding techniques, narrowing workforce skills gaps, and improving employee retention.

TalentCulture covers HR, technology, recruiting, leadership, social business, etc. It is a great source for keeping up to date with the latest HR news and techniques.  Guest posts are often added to the site by experts in the HR industry. The site also hosts a weekly Twitter chat with "#TChat"

Switch & Shift is a website that covers the human part of human relations. It gives tips and tricks for management and engagement. The Work That Matters podcast centers around the idea of work with meaning and features thought leaders on this topic.

Recognizing the contributions of employees can be done in many different ways. Doing so with a plan in place and in designated intervals ensures a happy work environment.

Do you need help with employee recognition programs? You can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.