3 Mistakes to Avoid in Employee Rewards and Recognition Programs

What’s one word you would use to describe the feeling you get when a team member gives you a shoutout at work? 

Happy? Touched? Proud? 

Recognition is such an integral part of effective team culture. In fact, 90% of HR respondents have said that an effective employee recognition and rewards program drives business results, and 91% of them agree that it has a positive effect on employee retention. 

Despite this, many employees would rate their company’s rewards program with a net promoter score of -15, and only 21% would recommend their program to others.

Here are five common mistakes to avoid when implementing and maintaining your employee rewards and recognition program: 

Mistake 1 - Giving recognition infrequently

Despite how simple the act of recognizing someone is, 82% of American professionals feel that they aren’t adequately recognized for their contributions in the workplace. Recognition is an excellent tool for improving employee engagement and team morale; more than 40% of employed Americans feel that if they were recognized more often, they would put more energy into their work. 

Increasing the frequency of recognition is a powerful practice that employees respond well to. A study by Globoforce found that employees who receive regular small rewards, in the form of money, points, or thanks, are eight times more engaged than those who receive compensation and bonus increases once a year.   

In addition, one of the best tools for recognizing employees is peer-to-peer recognition. Often, leaders don’t work closely with team members and miss out on the little wins and great work being performed on a daily basis. Empowering team members to participate in recognition (and not gatekeeping it!) ensures that more kudos are given frequently, which helps build a great culture of recognition. Studies show that peer-to-peer recognition is 35.7% more likely to have a positive impact on financial results than manager-only recognition. 

Mistake 2 - Giving rewards that aren’t meaningful or impactful 

Understanding what kind of rewards are the most meaningful and impactful to your team goes a long way. It’s not a practice that’s widely practiced, as only 8% of organizations in this year’s Global Human Capital Trends survey said that their rewards program was “very effective” at creating a personalized, flexible solution.

Rewards don’t have to be all cash-based. When a reward is monetary, it can feel like there’s a dollar amount assigned to your effort. Often, managers like to send out gift cards to acknowledge extra effort being put into a particular project. While it’s a nice gesture with the best intentions, a $50 gift card can convey that the employee’s extra time and effort was only worth $50. Interestingly, 65% of employees prefer non-cash incentives. 

Sticking with traditional benefits (such as health insurance or vacation days) is a missed opportunity to tailor your program to your employees to bring truly delightful rewards that your team will appreciate. Being able to align rewards with individual preferences and company values is extremely impactful. As an example, Patagonia is a company that has aligned its rewards and benefits with its company culture and sense of identity. 

To compensate and reward its team, Patagonia has an unconventional approach that caters to employees’ lives both inside and outside of work. This includes 26 three-day weekends per year, a surfing policy that allows employees to surf or do other exercises during work hours, and extensive family benefits, such as onsite daycare to support parenting and breastfeeding. They strongly believe in hiring passionate and motivated people who stand behind what they believe and have seen a rise in performance and productivity when they are rewarded accordingly. 

At Bucketlist, we value the idea of helping people achieve life goals, especially those goals they have outside of work. Because of this, one of our benefits is a yearly monetary fund that team members can use to achieve items on their bucket list. Earlier this year, Maddie used her Bucketlist Benefit to purchase new gear to cross off more camping spots that have been on her list. 

Cody used his benefit to visit one of the most highly ranked restaurants in Canada, which has been on his personal to-do list for a long time!

Mistake 3 - Recognitions aren’t tied to company values 

Core company values are the things that your organization values the most; they are the things that guide the company forward and is the foundation of what every company culture is built upon. 

“Your values and mission are what ultimately drive your team’s performance. When your core values are truly ingrained in your way of doing business, every decision will be made with those values in mind. This helps align every decision with your brand and what it hopes to accomplish. It creates accountability to yourself and others.”

- Steve Grau, Founder & CEO of Royal Ambulance

Unfortunately, less than 50% of employees know their company’s core values and only 27% strongly believe in them. Tying recognitions to values will push them front and center on a daily basis. Rewarding people based on their embodiment of core values will define a company’s behavioural norms.  

When you enable staff to recognize one another for living company values, employees feel more connected to the mission, vision, and values. Purpose-oriented employees reported 64% higher levels of fulfillment in their work than those who were non-purpose-oriented. 

Studies show that companies whose employee rewards and recognition program are tied to their core values perceive greater benefits on ROI (70% VS 38%) and maintain stronger employer branding (80% vs 49%). 

“[Core values] can be unique from company to company. Rewarding employees for embodying organizational values demonstrates the employer’s commitment to these values. This practice can help align workplace culture with these values and develop trust among employees.”

- SHRM

Bonus: Mistake 4 - Only recognizing work-related output 

With the rise of a remote/hybrid and distributed world, the defined line between our home and personal life is becoming even blurrier. Over the past few years, many of us have gained more insights into our colleagues’ personal lives over video calls. In the background, we can see pets and family members, memorabilia from vacations, pictures, decor…all things that are glimpses into what their passions and interests are outside of work. 

“This idea that work is work, and your life should be separate from it, [is] really kind of a fiction, right? We're all people. And employees should be valued [as a whole person], not just as a part of the machine.”

- Scott Behson, Author of “The Whole-Person Workplace"

Typically, leaders stick to celebrating work-related performance. But it’s important to recognize and support who people are outside of work too. Sincerely taking an interest in understanding and celebrating the achievement of life dreams, personal goals, bucket list items, hobbies, passions, and important milestones goes a long way in building a culture where team members feel safe, included, and connected.  

How to build a Culture of Recognition

Looking to build a Culture of Recognition in your organization? Giving employees the opportunity to recognize each other through various tools and channels is a great way to begin building healthy habits.  

If you don’t currently have an employee recognition and rewards program, or you’d like to revamp your current one, here are some tips on how to get started: 

1 - Define the goals and objectives of your employee rewards and recognition program

2 - Give people easily accessible ways to recognize each other. Make recognition a habit to start building a Culture of Recognition 

• - Dedicate time in meetings to giving recognition 
• - Create a Slack channel (or any other company communication platform) for kudos and appreciation 
• - Normalize recognizing people for their passions and milestones outside of work

3 - Survey your team and see what kind of rewards resonates with them

4 - Implement a rewards and recognition platform, like Bucketlist Rewards! 

Curious about Bucketlist Rewards and the impact employee rewards and recognition programs can have on your team’s culture? Contact us for a product demo with one of our friendly Culture Evangelists to learn how Bucketlist’s employee reward and recognition software can help you keep your team happy and engaged.