Organizational Wellness

Eye On the Prize: Types of Employee Recognition

Feb 15, 2023

Last Updated Jun 1, 2023

One of the best things you can do to foster loyalty and a positive work environment is recognize employees for their great work. Without employee recognition, workers can all-too-quickly begin to feel undervalued, underutilized, and unknown.

This can be more challenging in our dispersed modern work environment. When everyone was in the office every day, it was easy for managers to find a time to provide one-on-one group recognition. Today, organizations have to be more intentional about creating these opportunities. And it’s worth the effort: Recognition often leads to greater job satisfaction and employees who are motivated to do amazing work. Unfortunately, Gallup research has found that only 36% of employees report their organization having a recognition system in place.

The good thing is, most companies would love to highlight and reward employees more often. It feels great to spread those warm fuzzies! It’s just a matter of figuring out how to show the appreciation you already feel.

To help you out, we’ve compiled different types of employee recognition so that you can confidently reward your workforce without missing a beat. Let’s go over employee recognition, the types of rewards and recognition for employees, and everything in between.

What is Employee Recognition

Employee recognition is how a company acknowledges its staff members based on their efforts, improvements, and contributions by identifying and rewarding specific individuals. Doing so shows employees that they matter, encouraging the entire workforce to put their best foot forward. It supports an environment where people feel comfortable and appreciated. An employee recognition program should aim to highlight achievements, applaud efforts, and reinforce company values.

Importance of Employee Recognition

If you want to retain your top talent, boost morale, and up the productivity of your workforce, you cannot neglect an employee recognition program. There are many benefits of recognizing people in the workplace, but some of the most notable ones are:

Talent acquisition. The culture you create at work has a major impact on the kind of employees you attract to your organization. Especially in an online environment, people talk! Trust us, potential employees do their research, and the reputation of your company influences whether or not they submit an application for your posting. If you recognize your employees frequently and authentically, not only will your employees be happier, but you’ll attract top talent in your industry that wants to be more supported.
Employee retention. Employee turnover is one of the biggest drains on businesses today, and lack of recognition is a major contributor. In fact, 79% of people who quit their jobs cite a lack of appreciation as a driving force for the change. Employee recognition is a great way to increase retention in an organization. This outcome decreases turnover costs, saving money and effort for the company.
Organizational culture. Organizational culture exists whether or not you are actively working on it — but how employees are seen and rewarded does a lot to shape the culture. Employee recognition helps improve the employee experience and can boost employee’s morale, happiness, and work environment. Recognition helps reward behaviors that reinforce company values and pull the best out of people.

Types of Employee Recognition

So, helping your employees feel seen, important, and appreciated is key to a thriving and competitive business. Let’s now go over recognition types and how you can best implement these opportunities in your organization.

Formal

Formal recognition opportunities tend to be structured or scheduled rewards, such as employee of the month, work anniversaries, a weekly team highlight, or any other type of recurring events where you acknowledge your employees. This includes:

Celebrations. Anniversaries, holiday parties, employee appreciation days, etc.
Performance reviews. When you have regular performance reviews, take time with each person to discuss their general performance and successes and contributions to the business.
Bonuses. Offering bonuses is a formal way to encourage employees to achieve stretch goals and show them that they are appreciated.
Raises. Especially for employees who consistently deliver their best work, improve, and have been at the company for a long time, rewarding that loyalty with a raise can be extremely effective.

Informal

Informal recognition doesn’t have set timeframes, so while it may be less consistent, it has fewer limitations and can reach more individuals. Instead of holding an event, these informal moments tend to be more off-the-cuff and can even seem more genuine. These may include:

Awards. An award is a great, informal way to recognize employees that have done outstanding work or are consistently bringing valuable qualities to the workplace. Even a small award can make a big impact — something like an “Excellent Brainstormer” award may sound simple, but it shows a teammate their contributions are being noticed.
Empowerment. Shoutouts in your weekly team meetings or even a quick direct message online for a job well done can make people feel great, even if there isn’t a specific title or reward attached to that praise.

Monetary

We all appreciate a monetary reward now and then. As already mentioned, this can include formal recognition like bonuses and raises, but you can also go beyond those typical incentives.

Personalized rewards beyond compensation. Look at what your individual staffers are interested in. Are there specific places you could get a gift card for someone?
Point systems. Some companies use a point system, where employees receive a set number of points every month or quarter which they can spend on items in a catalog or other platform.

Social

Social recognition is a powerful tool if you want people to feel seen and celebrated, and it usually doesn’t even take a great deal of time or effort. Not only does it show individuals that you care about them and their work, but it also acts as a motivator for other employees.

Peer-to-peer networks. Anytime you can foster a community where peers can complement each other, do it! Managers and company leaders should take the lead and set examples, but encourage it at a peer level, too.
Group chats. A shoutout in the team, department, or company chat can be a casual but meaningful way to highlight an employee. It also encourages others to interact and congratulate others, or even learn from someone else’s example.

Recognition Examples

We’ve gone over types of recognition for employees, but what does that look like in real life? Here are some examples you can model your recognition efforts.

Verbal affirmation. Small acknowledgements still go a long way, so even occasional praise for doing a great job on a task can be an easy day-to-day way to recognize employees. These verbal boosts of encouragement, connection, and acknowledgment can also help employees avoid burnout.
Written affirmation. A thank you note or email is a thoughtful way to appreciate someone’s contribution. This kind of encouragement is a concrete piece of feedback for employees that can remind them of the unique positive impact they have in their role.
Unstructured recognition. Don’t be afraid to think outside of the box or limit your awards to formal events. Casual compliments, positive feedback, and spontaneous praise are great ways to work outside of a budget, acknowledge more people, and break boundaries.
Structured recognition. Offer a reward each month for an employee who goes the extra mile in your department, such as who has the most sales or who had a meaningful impact on a customer.

Extra Tips

There isn’t one way to recognize employees or put a program in place — the most important thing is to be sincere and intentional with your employee recognition. These are some best practices as you perfect recognition in the workplace.

Tailor praise to the employee. You are recognizing individuals and reminding someone that the employee knows and appreciates their work. Try to steer clear of generic rewards! Instead, think about what that individual employee would like and get excited about.
Be specific. When it comes to identifying the work people do, get specific with both their efforts and their praise. Don’t just say, “Our employee of the month is awesome!” Find unique examples and adjectives for your recognition that call out why that person is being recognized now.
Praise on special occasions. If someone has a work anniversary or if your company has a yearly holiday party, don’t miss the opportunity to celebrate and highlight your people.
Goals/contests. Let your employees know about your recognition program! Get them excited and involved with work contests, or set goals to add a little extra motivation.

Gympass Makes Recognition Easy

Your company is constantly evolving and striving to be a better place to work, so as you work on acknowledging employees, remember that everything is a work in progress. And keep in mind: employees who are appreciated and celebrated have a more fulfilling employee experience, which means your recruitment, retention, and culture efforts will improve, too.

If you want to really show that you really care about them, give them the tools and resources they need to take care of themselves inside and outside of work. Talk to a wellbeing specialist, who can help you discover new and effective ways to care for the health of your employees!

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