Establishing Criteria for Employee Recognition: A Comprehensive Guide

Employee recognition. If it’s something that’s not yet top of your organization’s agenda then it really should be. A powerful tool that helps you attract, retain and engage the very best talent - employee recognition is vital for success in the current climate. But what exactly is it? How can it help your business? And what are the criteria for employee recognition?

In this comprehensive guide, you’ll find out everything you need to know about the criteria for implementing effective employee recognition and rewards programs.

Why Employee Recognition Programs are so Powerful

Employee recognition is so much more than just saying “thank you” for a job well done. It’s a basic human need, something that our brains are hardwired to respond to. 

That’s because receiving praise and recognition triggers the release of dopamine. Known as the “happy hormone” dopamine stimulates the part of the brain that deals with positive emotions like satisfaction, happiness and pride. This physical desire to be appreciated goes back to the earliest days of civilization, when humans had to prove their value to the tribe - otherwise, they wouldn't survive. 

Today, we’re no longer fighting for survival, but our reaction to recognition is still the same. So when it comes to the workplace, it’s no surprise that employee recognition results in higher levels of motivation, engagement and lower staff turnover, as well as an increased ability to retain and attract top talent. 

It’s not just a vital part of a thriving work culture, however, because employee recognition also boosts the bottom line. Indeed recognition has been shown to have a strong influence on financial success by increasing productivity and lowering absenteeism. So, put simply, rewards and recognition programs can boost just about every aspect of an organization. 

Employee recognition by the numbers

44% of surveyed employees who said they were planning to leave their jobs cited a lack of recognition as their main reason. Zippia

53% of employees say they would stay longer in a company if they feel appreciated. Glassdoor

72% of businesses agree that recognition impacts engagement positively. Harvard Business Review

With a recognition program in place, employees are 44% more likely to feel like they are “thriving.” Gallup

Employees who are regularly recognized are 5x as likely to feel connected to their workplace culture. Gallup

79% of millennials said an increase in rewards would make them more loyal to their employer. SHRM

5 Criteria for Successful Employee Recognition Programs

(Image from Parabol)

If you haven’t already implemented a program in your organization, the good news is that it’s never too late to start. Today it’s easier than ever to get your employee recognition program off of the ground, especially with the help of intuitive platforms like Bucketlist. 

The key to unlocking the potential benefits of any program is to establish the criteria for rewards and recognition. Questions like “What are you going to reward?” “How will you reward employees?” “And how will you know if it’s working?” will all need to be answered in order to make your program a success.  

But before we can even begin to think about measuring the success of any employee recognition activity, we first need to look at what makes an effective program in the first place. These days the occasional “good job” or an employee of the month award simply won’t cut it. So what are the criteria for successful employee recognition programs? Here are six things you should consider. 

1. Top-down vs. peer-to-peer

Traditionally recognition has been the responsibility of managers and supervisors, who hand out positive feedback as part of formal performance reviews. This top-down approach may be how you decide to structure your own employee recognition program. But what if recognition didn't have to be handed out by managers? What if it was something that everyone had access to? 

That’s the idea behind peer-to-peer, a form of social feedback that democratizes recognition. Put simply, this incredibly effective technique empowers everyone, not just managers, to recognize each others’ achievements. 

Building a culture where your people are empowered to recognize one another can be incredibly powerful. 

Because it’s no longer bottlenecked by supervisors and managers, peer-to-peer feedback is often more timely, more specific and more frequent. It can also be more effective. One study found that peer-to-peer recognition is 35.7% more likely to have a positive impact on financial results than manager-only interactions.

2. What will your rewards be? 

Another important criteria for employee recognition is to determine exactly what you’re going to reward your people with. Are you going to offer a financial incentive? A gift card? Some kind of prize? Or even something unique to your company like an extra day of vacation or even a money-can’t-buy experience? 

There’s a common misconception that you need to spend big in order for employee recognition to be effective. But that couldn’t be further from the truth. Instead, it’s the simple act of giving something that makes people feel recognized, not the reward that they receive. 

If you don't believe us, just look at the employee recognition and rewards programs run by some of the world’s best employers. Google, for example, has found that value alone doesn’t motivate staff. In fact, the company discovered that cash incentives actually made people less happy while rewards like personalized gifts or experiences were far more effective at motivating its people. 

The lesson here is that it really is the thought that counts. So take the time to come up with employee rewards that people will cherish - something that they’ll truly value and that ties in with your company’s culture. 

3. Should you recognize milestones? 

Milestones matter. Whether it’s a birthday or a work anniversary there are occasions that are unique to every person in your organization. Often these milestones are a time to reflect, to take stock of achievements and to track progress. That’s why they’re a crucial criteria for employee recognition. 

By building milestones into your program you can make sure that your people feel recognized. It’s a simple act that shows your people you genuinely care about their personal and professional progress. 

It’s up to you to decide which milestones should be recognized. Celebrating someone’s work anniversary is a great way to show employees how important they are to the organization. While, at the other end of the spectrum, celebrating someone’s birthday or another personal milestone shows them that you recognize them as a person and not just an employee. 

4. How do you match your rewards to your company culture?

From startups to billion-dollar giants - the secret sauce that makes the very best employers stand out from the crowd is company culture. 

But culture isn’t something that you can simply write in an employee manual, or convey through inspiring messages written on your breakroom walls. It’s something that people need to live and breathe, the building block of every decision, discussion and interaction within your organization. 

That’s where employee recognition can help. 

This isn’t about recognizing the organization’s top seller or your team’s best performer. Instead, it’s about recognizing the efforts and accomplishments that contribute to your company culture. 

Maybe you have an employee who always has a smile on their face, a coworker who goes the extra mile to help, or someone who delivers the kind of customer service you want to be known for. Those are all the kinds of actions that deserve recognition. 

By connecting your recognition to your values and company culture, your employees will be able to draw a link between their positive actions and your organization’s overarching purpose. 

5. How often should you reward your employees?

Remember earlier on when we were talking about dopamine? Well, one thing we didn’t mention is that dopamine can wear off, fast. That means that frequency matters when it comes to employee recognition. 

“Recognition is a short-term need that has to be satisfied on an ongoing basis - weekly, maybe daily.” Jim Harter, Gallup Chief scientist.

If you only celebrate people every few months, or worse, every year, then the impact of your efforts will quickly lose its value. So if you truly want your recognition to be effective you need to deliver it regularly. 

This is where a little recognition can go a long way. 

Instead of just celebrating major achievements, why not take time out to recognize the little wins? Whether you set aside a few minutes at the start of team meetings or utilize existing communications tools like Slack, Teams and email - you have the platform to regularly recognize the little things that people do to contribute to your organization’s success. 

Often, this kind of micro-recognition can be just as effective as rewarding people for major milestones. And don’t worry about overdoing it. The experts say that as long as your recognition is honest and genuine, you can never give too much of it. 

How to Measure Employee Recognition 

You’ve established the criteria for employee recognition and put your program into action. But how will you know if it’s working? 

Tracking your progress and measuring your success is vital to ensuring your employee recognition is effective. So what kind of things should you be looking out for? Here are some employee recognition criteria examples. 

1. Participation

A simple KPI that you can use to measure whether your employee recognition program is successful is to see how many people are participating in it. In essence, the more team members that are using your employee recognition program to send and receive recognition, the better it is performing. 

Generally speaking, a participation rate of about 80% means that you have a very strong program. But don’t worry if your activity takes a little bit of time to get off the ground. Building a culture of recognition and rewards takes time, so any increase you experience is a step in the right direction. 

2. Employee engagement

Perhaps the easiest way to see if your rewards and recognition activity is working is to simply ask your employees. 

Employee Engagement Surveys are an invaluable tool to help you measure your people’s commitment, motivation, purpose and passion for their work. These surveys will tell you what your organization is doing right, but also, where it needs to do a little bit more work. 

Tracking any improvements in your engagement surveys against your employee recognition and rewards activity is a great way to see if your program is working. If you want an even clearer line of sight on your success you can even ask your employees directly. Whether it’s as part of your annual engagement survey or a supplemental pulse-style questionnaire, you can ask for direct feedback on how your people feel about your program. 

3. Top performers

Who is recognizing who, and how often are they doing it? By taking the time to analyze how involved your employees are in your program you will be able to see if it is working, or if you need to take steps to ensure that everyone is involved. As a general rule of thumb, you want recognition activity to be spread evenly throughout the organization rather than dominated by a few individuals. 

This information can provide a snapshot of which managers, employees and even departments are embracing your recognition activity, and which need a little extra encouragement to get involved.

4. Budget usage 

Just as you can measure your top performers you can also measure your organization’s top spenders when it comes to recognition. Who is using their budget allocation and how much do they spend? 

If these figures are high it’s a good sign that your program is having the desired impact. It might even prompt you to expand your budget to make it even more effective. However, if it’s low, you might want to have a think about how you can increase your engagement. 

5. Key KPIs

One way to track the performance of your employee recognition program is to monitor specific metrics that you are hoping to boost as a result of your activity. As we’ve already discussed, employee recognition and rewards can boost productivity, reduce turnover and improve engagement. And while any gains you might experience in these areas won’t be solely attributable to your program, it certainly won’t be a complete coincidence that your newly implemented program correlates to any increases that you experience. 

The benefits of employee recognition

✅ Improve engagement.

✅ Elevate motivation.

✅ Enhance productivity. 

✅ Reduce turnover.

✅ Reinforce company culture.

✅ Attract talent.

✅ Raise morale.

✅ Boost your bottom line. 

Building a Strong Employee Recognition Program

I’ve you’ve read this far then you’ve learned everything you need to know about the criteria for employee recognition and the criteria for measuring the success of your employee recognition program. 

Now, all that’s left to do is for you to go and implement it. 

That’s where we can help. Bucketlist Rewards' industry-leading platform can help you build a robust program that unlocks the power of recognition and rewards for your organization. To find out how Employee Rewards & Retention Software can improve your employee recognition efforts, book a free demo today.