3 Important Differences Between Rewards and Recognition
You might be tempted to think money is the only thing that matters to your employees. As long as employees get their paycheck, they’re happy, right? Not quite. 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. And in one of our own studies, we found that nearly one-third of employees reported they would rather be recognized for their work accomplishments in a company-wide email from an executive than receive a $500 bonus that wasn’t openly publicized.
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?
Read on to learn the differences and get some tips for creating your own rewards and recognition program using BambooHR and our robust integration Marketplace.
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 accomplished. 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
Employee rewards 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 it’s really the recognition and not employee rewards that so many employees are craving. Research from OC Tanner found that just by personalizing the recognition they give employees, leaders can boost two categories of the employee experience by 126% (autonomy) and 145% (connection).
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 lead to better employee retention.
Recognition Can Happen at Anytime and Be Given by Anyone
Recognition can be done frequently and in the moment, which means people don’t have to wait 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 recognition platform WorkTango at BambooHR, so coworkers can easily and publicly recognize the amazing work their peers are doing.
10 Tips for Creating an Employee 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. And make sure 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.
Get Rewards and Recognition Right
Rewards and recognition increase employee engagement and retention. Plus, they’re an easy (and cheap!) way to show your employees that you value them as people. Our Rewards and Recognition Ebook offers up to 13 ways to get your program right.
2. Make It Timely
To get the most out of your efforts, act immediately. Give recognition or a simple reward right 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, 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. Say your employee just bought a house. A gift card to Home Depot or a custom doormat would let them know you share in their excitement, which will make them feel even more seen and appreciated.
5. Make It Collaborative
Let everyone be a part of your rewards and recognition program. Employees feel great being recognized, but also recognizing their peer’s work. 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 bi-annual 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 5 minutes on the agenda to team shoutouts. Your team members will begin to count on that time as an opportunity to recognize their peers.
How do rewards and recognition shape company culture?
A rewards and recognition program can encourage better performance and communicate a lot about your organization’s culture.
7. Be Fair
Look for the underdogs whose quality work might not be as obvious, make sure your employee recognition program spans all teams across your organization, and encourage cross-functional recognition between team members.
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.
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6 Popular Employee Rewards Ideas
When deciding which rewards your employees would value most, look to the source. These were the top perks employees preferred to receive for work accomplishments and performance according to a BambooHR poll, along with some ideas on how to get creative with them.
1. Monetary Bonus
If you’re ever at a loss, make it easy on yourself and remember: Who doesn’t love a little unexpected cash?
2. Gift Card From a Major Credit Card Provider
Similar to a monetary bonus, gift cards from major credit card providers (e.g., Visa, American Express) give your employees more flexibility than gift cards to specific retailers.
3. 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. REI employees get access to paid four-week sabbaticals after 15 years of service and every 5 years after that.
4. A Gift Card to a Favorite Retailer
The great thing about this option is that it can be truly personalized. One BambooHR customer told us she includes a question about each new hire’s favorite local business on her company’s Getting to Know You survey during onboarding so she can easily personalize rewards for that employee.
5. Brand-name Consumer Products
Consumer products are a great way to keep rewards job-specific. A new pair of AirPods for managers who love to walk and talk. A new branded zip-up for employees who regularly serve as brand ambassadors.
Pro tip: Collect sizing and preferences information during onboarding so you can 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.)
6. Gourmet Treats
In the immortal words of Audrey Hepburn, “A nice creamy chocolate cake does a lot for a lot of people.” We’re not saying chocolate cake is always the answer, but we are saying food is usually a pretty good option when it comes to showing appreciation.
Pro tip: Track food allergies in BambooHR too so you never accidentally send something an employee can’t eat!
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