Employee Recognition And Rewards: Key To Building A High-Performance Workforce

In today’s fast-paced business environment, an effective employee rewards and recognition program has emerged as a strategic tool that enables businesses to achieve their objectives. By aligning employee behaviour with organisational goals, these programs not only foster a high-performance culture but also drive engagement, loyalty, and accountability across the workforce.

The Power of Rewards and Recognition

Employee recognition is much more than a pat on the back. It’s a critical lever for business success. Aon’s ‘Trends in Global Employee Engagement’ survey identified Rewards and Recognition as the top driver of employee engagement, ahead of factors like Senior Leadership and Career Development. This link is even more pronounced when considering financial performance. Aon’s research shows that a 5-point increase in employee engagement correlates with a 3% revenue increase.¹

Supporting this, a recent Gallup study revealed that companies with highly engaged employees saw significant business outcomes: 81% less absenteeism, 18% lower turnover for high-churn companies, and 23% higher profitability.²

Yet, despite this clear ROI, recognition programs remain underutilised in many organisations.

So, why are employee recognition programs so effective? They boost motivation, engagement, retention, and performance, while also shaping a positive workplace culture. When implemented strategically, these programs serve as a direct bridge between individual actions and company objectives.

Key Benefits of Employee Recognition Programs:

• Increased motivation and engagement: Recognised employees are more connected to the organisation and motivated to go the extra mile.
• Improved retention: Employees who feel valued are 3 times more likely to stay with the company³.
• Enhanced performance: Motivation leads to better performance across the board.
• Positive workplace culture: Recognition fosters a supportive, collaborative environment.
• Alignment with business objectives: Rewarding employees for actions that contribute to business goals creates a shared sense of purpose.
• Ownership and accountability: Employees take pride in their work and feel a deeper connection to the organisation and their work colleagues.

Aligning Strategy and Culture

For optimal impact, employee recognition programs must align with both company strategy and culture. Strategy-based recognition focuses employees on metrics like service, sales and quality that are tied to business goals, while culture-based recognition drives values, practices, and behaviours that reflect the company’s ethos.

Without this alignment, even the best-laid business strategies fail to optimise results. By driving both performance and culture simultaneously, organisations ensure that their workforce remains engaged and motivated and delivering what is important to the business.

It’s Not Just About Rewards – Recognition is Key

While monetary rewards certainly play a role, non-monetary recognition is equally vital to fostering a thriving workplace. Recognising employees frequently, visibly, and authentically ensures that they feel fully appreciated.  Combining these factors, optimises the power of the recognition and creates a multiplier effect on performance.

Seven Key Principles for Effective Recognition:

1. Inclusivity: Recognition should reach all levels of the organization.
2. Frequency: Regular recognition keeps motivation high.
3. Visibility: The more recognition is seen, the more it motivates.
4. Immediacy: A timely connection between performance and recognition maximizes impact.
5. Authenticity: Genuine, heartfelt recognition is more meaningful.
6. Autonomy: Allow employees to choose how they are rewarded.
7. Agility: Recognition programs must be able to adjust quickly to business priorities.

A well-structured recognition framework spans informal to formal recognition, with each layer providing increasing levels of formality and value. Starting with non-monetary recognition, moving to performance-based rewards, and culminating in high-profile events where top performers are celebrated by senior leadership, a well-rounded program creates a culture of appreciation.

Anatomy of a Best Practice Employee Recognition Program

Achievement Awards Group has developed a nine-box systems framework that ensures each component of a successful employee recognition program is addressed fully:

1. Program management: Strong leadership and C-suite buy-in are essential. Involvement from line managers is crucial, as employees often value recognition from their immediate supervisors most.
2. Clear goals: Set recognition objectives that align with business goals and ensure they integrate both performance and values-based recognition.
3. Program metrics: Establish a measurement framework that allows business to track the effectiveness of the program and its impact on the company.
4. Launch and onboarding: Build excitement and buy-in with a structured rollout plan.
5. Sustained communication: Ongoing communication ensures that recognition remains top of mind and fosters participation.
6. Training: Customised training helps employees understand how to engage with the program and highlights the benefits for them.
7. Rewards: Tangible rewards provide additional motivation and sustained participation. As a rule of thumb, the reward budget should be between 0.5% to 3.0% of salary costs.
8. Technology: Source a robust technology platform that enables seamless 360^o recognition and reward at scale, and access through desktop and mobile.
9. Feedback Systems: Continuous feedback and measurement ensure that the program remains relevant and delivers results.

Make Recognition and Rewards a Strategic Priority

An employee recognition and reward program is more than just a nice-to-have – it’s a business imperative. By strategically aligning recognition with business objectives, involving leadership, and rigorously managing implementation, organisations can create a culture that not only retains top talent, but also helps drives traction, high performance and business results. When businesses recognise their employees, they’re investing in their most valuable asset – their people.

References:

1 – Aon 2018 Trends in Global Employee Engagement – found at:  https://www.aon.com/getmedia/08c8d127-a8f0-4872-b03a-355361c7e000/trp_infographic_#:~:text=The%20best%20employers%20boast%2075,3%25%20increase%20in%20revenue.%E2%80%9D

2 – Gallup’s 10th employee engagement meta-analysis – found at: https://www.gallup.com/workplace/236927/employee-engagement-drives-growth.aspx

3. Towers Watson/WorldatWork: Global Strategic Rewards Report