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Why does recognition matter?
According to Psychology Today, feeling appreciated is a cornerstone of positive self-worth. It also strengthens the bond between two individuals. Studies show that workplace recognition is important to employees of every generation. And it’s a key driver in employee engagement. 40 percent of American workers would put in more effort if their employers recognized them more often, and employees with “excellent” well-being had a 19 percent higher work output than employees with “poor” well-being, according to the O.C. Tanner Institute.
Recognition plays a key role in creating psychological safety at work. This feeling of safety allows employees to feel comfortable offering feedback, making mistakes, and sharing differing opinions.
Recognition is all about acknowledging behaviors that should be rewarded. We do this to establish or reinforce organizational culture and values as well as to motivate and engage performance expectations. But, when you manage people with different needs and behaviors, what does effective recognition look like?
A pizza party or happy hour might be fun for some employees, but excruciating for others. A coveted parking spot would reward an employee who seeks prestige but might embarrass someone who doesn’t like to be on display. A handwritten note of thanks might be very meaningful to one employee but feel cheap to the next.
While leadership has a responsibility to model core values and recognize cultural champions, employees at all levels should be encouraged to recognize those who embody the organization’s core values. It’s important that employees feel valued, recognized, and appreciated—and it’s unreasonable to think the organization and managers alone can provide that recognition. Encouraging peer recognition throughout your organization can foster healthy work relationships, increase employee engagement, and improve employee retention.
Public or Private recognition?
While choosing the right reward can feel like a balancing act, one thing’s for sure: As human beings, employees thrive on positive feedback.
Your employees may have a preference of whether they receive recognition publicly or privately. Providing recognition in a way that motivates them creates a psychologically safe environment.
Our Manager’s Guide to Reference Profiles will provide managers with details about whether a person prefers public or private recognition. In your initial meeting with a direct report, you can confirm their preference.
When reviewing the results, emphasize the strengths in the beginning. Celebrate these characteristics and ask how these have helped the individual succeed on the job. Then, move on to potential pitfalls. Be frank about these, but remember: when it comes to our shortcomings, a little awareness goes a long way.
Employee recognition shouldn’t be limited to once a quarter or the end of a big project. Consider celebrating an employee’s growth and contributions to the team in real time. Pave the way for lateral recognition by encouraging employees to recognize one another for their hard work and progress.
How to reward employees and recognize great work
1. Say “thank you”, and mean it.
It’s surprising how often leaders throw rewards like parties or bonuses at employees without ever saying “thank you.” Hosting a monthly beer night to thank employees in bulk is nice, but it isn’t going to cut the mustard. It won’t make your employees feel special and it won’t deliver the engagement results you want.
Take the time to understand what your employees are bringing to the table. Then thank them—and really mean it. Dropping by someone’s desk with words of heartfelt thanks can do more for morale than a whole season of free drinks. You could even try penning a handwritten note and mailing it to the employee at home.
2. Be specific about what an employee did that was so great.
Being specific about why you’re recognizing an employee can actually give that person an extra dose of dopamine. People who tend to be more analytical, in particular, like hearing what they’ve done well. This is because it transforms praise from something empty to something targeted and tangible.
The bonus of being specific? People will understand exactly what you like to see, and they’ll do more of it.
3. Personalize employee rewards.
By “gifting” an introvert tickets to join you at a sporting event, you could be burdening them with forced fun. A work from home day might be more appreciated. Someone who’s driven to receive public praise might prefer the prestige of being employee of the month—and getting that coveted parking spot.
Understanding your people is key to keeping your best employees motivated and engaged. Use what you know about your employee’s goals, needs, and traits to tailor your reward to them.
Not sure what your employees would like? Don’t be afraid to ask them. One company we know asks employees what their favorite stores and snacks are, and how they prefer to be recognized, as part of onboarding. Then they use that intel to tailor rewards and recognition down the road. Even the simple act of asking can go a long way.
4. Use gift cards or monetary bonuses.
There are conflicting points of view about the efficacy of using gift cards, money, and other tangibles as a way to reward employees. Some experts say that these rewards don’t inspire loyalty. Also, employees need to pay taxes on cash awards, which can leave a sour taste in one’s mouth.
However, once again, it all comes down to understanding the employees you manage. Are your employees entry-level and strapped for cash? If so, money can help them pay their bills—and that can lower stress levels.
If you decide to give money or gift cards, consider outlining specific times when these rewards should be given. For example, you might choose cash rewards when an employee’s hard work has gone above and beyond. This way they’ll feel less transactional and more special. Cash can be a great way to make employees happy, but our advice is to consider making cash or gift cards just one part of your employee appreciation program.
5. Let your team do the gifting.
Allowing employees to reward their peers can be good for employee engagement. Employees like to receive kudos from peers. Consider having employees nominate each other for important rewards. Make sure you require them to be specific about why they’re nominating this person—you don’t want employee appreciation to become a popularity contest. When it comes time to present the award, read nominations out loud so the recipient can hear all the nice things his or her colleagues said.
At Google, employees recognize each other through a successful internal peer recognition and reward system. At Zappos, employees nominate their peers for rewards according to how well they lived up to or promoted company values.
How much should you be spending on employee rewards? Experts recommend setting aside one percent or more of payroll for recognition and rewards. If you don’t have that room in your budget, spend what you can on tangible gifts and be sure to say thank you often.
Here are some additional resources on this topic.