Work Policies
Good Policies

Employee Recognition Programs

In the employee satisfaction studies we have done, we've never found a firm with low employee recognition scores and high employee satisfaction scores. There is some debate in the HR community as to whether it is better to reward employees with more money, or in non-monetary ways. These two methods need not be mutually exclusive.

Compensation is important. If the average compensation in your company is well below average for other competing firms (firms in competition for your workers, not necessarily direct competitors in your industry), then certainly it is an issue you should address. However, the most prevalent complaint we have observed about compensation is the lack of relationship between pay and performance. If there is a lack of a strong pay/performance relationship in your organization, a non-monetary recognition program will be of limited value. If your organization pays its employees market rates, and grants larger pay increases to top-performers, an employee recognition program should be able to boost morale.

A recognition program does not have to be expensive. The structure of a recognition program is limited only by your imagination. An effective program has the following components:

  • Fairness
  • High visibility and consistency.

To be fair, a program must not favor one employee over another, merely because of his or her position within the organization, or his relationship with his supervisor. There must be an effective means of identifying employees who should be recognized. In many programs, there is an easy means by which employees can nominate others for recognition. As a supplement to a nomination program, supervisors can keep lists of notable employee achievements.

Making certain that a program is highly visible helps to ensure consistent implementation. If a recognition program becomes viewed as management's "program of the month," nominations will drop and those who are nominated may well be those who are perceived in the eyes of many to be management's "favorites." Small, but meaningful achievements may be ignored unless there is a plan to actively solicit nominees.

The actual rewards can be anything you want. One approach is to have small rewards initially, and make each employee who receives eligible to receive a larger reward at the end of the year. Some of the awards to consider include the following:

  • Dinner certificates,
  • A trophy or plaque,
  • Cash bonus,
  • Pizza party thrown in the recipient's honor, or for an entire group that has done a great job,
  • Bonus miles for airlines,
  • A "top achiever" ribbon,
  • A reserved parking space,
  • An extra paid day off,
  • Movie passes.

The reward itself should be just part of the process. Recognition can be achieved by having the reward given at a gathering of employees, and by recognizing the award in corporate communications, such as the corporate newsletter or Intranet site.

If you know of an employee relations policy that works, please e-mail us at for publication on this site. Let us know whether to include your name or company, or a link to your company's site. We'll assume you want to remain anonymous unless you tell us otherwise.