Rewards vs Recognition and How to Keep Your Employees Happy

Employee recognition can make or break those important employee turnover figures. According to Gallup, well-recognized employees are 45% less likely to leave an organization and these employees are less likely to turn over within two years. But despite the obvious benefits of retaining top talent, recognition remains a shortfall for some organizations.

You might be tempted to think money is the only thing that matters when it comes to rewarding employees, but employees need both rewards and recognition to feel fully satisfied with their job. According to Nectar—a recognition and rewards platform and BambooHR Marketplace partner—83.6% of employees feel that recognition affects their motivation to succeed at work.

Both rewards and recognition are important when it comes to employee satisfaction and engagement. They motivate in different ways, but how? When is a reward appropriate, and when is recognition the right route? What’s the real difference between the two? Getting it wrong can lead to an unengaged workforce, burnout and even employee turnover.

Read on to learn the differences and get tips for creating your own employee rewards and recognition program using BambooHR and our robust integration Marketplace.

What is employee recognition?

Employee recognition involves acknowledging the work and effort put in by your team. It provides your staff with a sense of accomplishment and helps them feel valued for the work they produce. Employee recognition isn’t a one-size-fits-all approach and it can go beyond communicating appreciation—it also helps to create a picture of success to other employees.

Employee recognition is as much a tool for personal reward as it’s a chance to reinforce workplace culture for the rest of your team.

What’s the difference between employee rewards and recognition?

As you develop an employee rewards and recognition program, you should thoughtfully consider the difference between these two incentives so you can assess when each of them will make the biggest impact.

Rewards are transactional; recognition is relational

• A reward  is generally a tangible gift given to an employee from their manager or the executive team to celebrate something they’ve achieved. For example, if someone hits their sales goal, they might get tickets to a sporting event. Or if the company hits their yearly goals, every employee might get an end-of-year bonus.
• Recognition  is personal praise or gratitude for good work and can be given by anyone at the company at any time. This can be as simple as a written note, a shout-out during a company meeting, a social media post, or even a personal phone call.

Employee rewards are tied to goals and accomplishments

An employee reward can be a great way to encourage employees to give your organization their A-game. They can also serve as a recruiting tactic to include in your employer branding.

A good guiding principle when it comes to employee rewards: they should be generous and reserved for truly exceptional work and achievements.

Recognition doesn’t require a budget

It can be hard for businesses to reward employees all the time, especially when budgets are tight. But giving recognition doesn’t have to cost a thing. Managers don’t need to ask the executive team for budget to write an email celebrating the great work an employee is doing. A simple “thank you” is free, easy, and can potentially help employee retention.

Recognition can happen at any time and be given by anyone

Recognition can be done frequently and provided right there and then, so employees aren’t waiting to be praised for a job well-done.

And because recognition isn’t costly, it can be an employee-led initiative. For example, we use the peer rewards and recognition program Employee Community at BambooHR, so co-workers can easily and publicly recognize the amazing work their peers are doing.

10 tips for creating an employee rewards and recognition program

1. Identify what to recognize

Use your company’s mission, vision, and values to map out the behaviors and actions you’re looking for from employees. This helps you ground your recognition in concrete, objective criteria. It also ensures that everyone at your company has equal opportunity to be recognized.

For example, one of our values at BambooHR is Make It Count, so an employee may receive recognition for going above and beyond on a project. And it can come from anyone, not just an immediate supervisor.

2. Make it timely

To get the most out of your efforts, act immediately. Give recognition or a simple reward when you notice behavior you’d love to see again. Look for small and unique ways to recognize employees regularly, like shoutouts in a team meeting or handwritten thank you notes.

3. Make recognition genuine

An automated email won’t cut it when it comes to employee recognition, but a sincere “thank you” can mean a lot. To make the most of a simple thanks, be sure to include  what  you’re thankful for and  why  it had an impact on you and your team. Not only will this make the recognition especially pointed, but it will also encourage the employee to repeat the action that earned the recognition in the first place.

4. Get personal

If you’re going the recognition route, praise an employee in a way they’re comfortable with. Some might feel embarrassed to be shouted out in a large company meeting, whereas some might thrive under the spotlight. And if you’re giving a reward, try to select something that will be truly meaningful to that employee. A gift card for somewhere you know they visit or enjoy will make them feel even more seen and appreciated.

5. Make it collaborative

Let everyone be a part of your rewards and recognition program. Encourage employees to praise each other often and consider creating a program that allows people to nominate their coworkers for employee recognition.

At BambooHR, we recognize peer-nominated employees at our monthly company meetings. This gives employees a dedicated, structured opportunity to shout out their teammates.

6. Make employee recognition a habit

If leaders and managers set a standard of regular recognition, it will quickly become a part of the company culture and something everyone wants to be a part of.

Pro tip: For recurring department meetings, dedicate five minutes on the agenda to team shoutouts. Your team members will begin to count on that time as an opportunity to recognize their peers.

7. Be fair

Look for the underdogs whose quality work might not be as obvious. It’s important to make sure your employee recognition program spans all teams across your organization. Encourage cross-functional recognition between team members wherever possible.

8. Don’t forget remote workers

It’s easy for remote workers to be out of sight, out of mind. They can often feel disconnected from the office, so recognition from peers and management can help them stay engaged with the team. For example, is your team getting lunch catered to the office to celebrate a success? Send them a food delivery gift card so they can participate from afar!

9. Get creative

Have fun with your reward and recognition ideas. Find ways to recognize and reward different groups, departments, and individuals in ways that are unique to their accomplishments, needs, and wants.

10. Keep employee recognition and criticism separate

Avoid the dreaded compliment-criticism sandwich. Recognition shouldn’t be used to soften the blow of criticism. Although feedback is important, try to keep these two conversations completely separate.

Six popular employee rewards ideas

When deciding which rewards your employees would value most, look to the source. Get feedback from current employees on what helps to motivate them. Here are some ideas to consider:

• Monetary bonus. If you’re ever at a loss, make it easy on yourself and remember: Who doesn’t love a little unexpected cash?

• Gift card. Gift cards from major credit card providers (for example, Visa or American Express) provide your employees more flexibility than gift cards to specific retailers. Or if you know what retailers they enjoy shopping at, personalize it to the employee.

• Extra vacation days. Time is money, as they say. Extra vacation days pack a double punch. They offer your employees a chance to refresh, and they also confirm that the employee has  earned  extra time off with their stellar performance. Many companies add vacation days as an employee’s tenure grows or even offer up a block of days when an employee hits a milestone work anniversary.

• Gourmet treats. It goes without saying that food is usually a pretty good option when it comes to showing appreciation.

Pro tip:  You could collect sizing and interest information during onboarding so you always have it on hand—in BambooHR, you can add a custom field in the Personal Info tab for just that, which employees can update themselves. You can also track food allergies in BambooHR too so you never accidentally send something an employee can’t eat!

Next steps: Start recognizing and rewarding your team

Feeling inspired? It’s time to kickstart the motivation in your team. Take some time to consider the rewards and recognition plan you have in place and how this can be tailored to encourage engagement and boost morale.

Keeping top talent engaged and motivated is essential for business success. Follow our tips and make sure those who do a fantastic job are receiving the spotlight they deserve.