Finding and retaining talented workers has always been a challenge. But in the post-pandemic world, it's become even more difficult.
According to a survey from Manpower Group, 77% of employers are having trouble filling roles, which is a 17-year high. In addition, Gallup predicts that in these post-pandemic years, the employee turnover rate could reach 24% due to shifting employee expectations around flexible work arrangements.
One way employers can flip the script is by establishing an effective employee recognition program.
What Is an Employee Recognition Program?
An employee recognition program privately and publicly acknowledges employees and their efforts within the workplace. It’s a way for employees to show that they appreciate their employees and want them to prosper in their positions. These programs can acknowledge individual employees as well as teams.
There are different types of employee recognition, including the following:
- Awards, like Employee of the Month
- Bonuses and raises
- Gifts, like gift cards or free meals
- Unexpected time off
- Written praise that is private or public, e.g. in a company newsletter, on Slack, or on social media
- Investing in employee wellness with free gym memberships and health classes
- Peer-to-peer recognition, such as rewards they can send each other
Having a formal plan for recognition is key to a program’s success. It’s also helpful if the program is multi-faceted and recognizes employees for a variety of achievements.
The Importance of Employee Recognition
In a time when workplaces are being increasingly employee-centered, an employee recognition program is more important than ever.
According to a Workhuman-Gallup study, if a business of 10,000 were to double the number of employees who receive praise or recognition for their work in the last week, they would experience a 22% decrease in absenteeism and a 9% increase in productivity. This would result in an estimated $92 million gained in productivity.
Along with having a positive impact on productivity, an employee who has been recognized is 63% more likely to stay at their job for the next three to six months. Another statistic shows that more than 40% of employed U.S. workers feel that if they received more recognition, they would put more energy into the work they’re doing.
When workplaces recognize employees for their work, employees are typically more motivated to succeed and demonstrate signs of high engagement.
Overall, recognizing employees can make a huge impact on a company’s bottom line. Next, we'll talk about the 5 key steps to creating an amazing employee recognition program.
5 Steps for Creating an Amazing Employee Recognition Program
Ready to create your employee recognition program at your company? These are the five essential steps you’ll need to take.
Step 1: Decide on recognition program type
First, you’ll have to decide what type of recognition program you’re going to use. Utilizing both public and private recognition is essential. For example, private praise in the form of raises, bonuses, gifts, and one-on-one feedback with managers should be key parts of your program. Employees may receive bonuses when they’ve helped the company increase their bottom line or worked particularly hard on a project. You can also give out bonuses when an employee is celebrating their birthday or a work milestone, like a one-, five-, or 10-year work anniversary.
Public praise is also necessary in order for your program to succeed. This can come in the form of shout-outs on the company newsletter, Slack, or social media. You may have a public bulletin board in your office where you show off the Employee of the Month or the Team of the Week. If you have a sales team, you might publicly list their accomplishments for the day, week, or month. This will not only help with recognizing the employees who worked hard – it will also encourage other employees to do the same.
Recognition can come from a superior or from a colleague through a peer-to-peer recognition program. For instance, a superior can publicly acknowledge a subordinate’s achievements, or a peer can send a reward like a spot bonus recognition.
Remember that it’s important to tailor the employee recognition program to your company culture as well as praise every individual according to what they would like. For instance, perhaps one employee is very shy and wouldn’t like to have a party thrown in their honor. Instead, you could just leave a gift on their desk. On the other hand, another employee may enjoy having their picture on the wall and a shout-out in the company newsletter.
Part of your program must include recognizing and appreciating every person for who they are, and not acting as if your program is one-size-fits-all. Then, your employees can truly feel seen.
Step 2: Decide which tools to use
You’ll need the right tools to start your employee recognition program. This includes employee recognition program software that will make it seamless to put your program into place.
Software like Compt, which is for small, medium, and enterprise businesses, centers on recognition through the form of perk stipends, a sum of money given to employees dedicated to lifestyle benefits. You can give bonuses for real-time recognition and reward so your employees can receive funds to spend on goods or services that are personally meaningful to them.
The software also has options for birthday and anniversary bonuses, along with peer-to-peer recognition, where peers can send each other kudos and a spot bonus recognition. With Slack integration, you can easily notify your team about their new bonus and let people share how they spent their perk purchases. The software is always 100% IRS compliant, without you having to make any extra effort.
In addition to Compt and Slack, you should also use tools like your company’s LinkedIn, Facebook, and Twitter, and website to give praise, as well as your email newsletter provider to send out public recognition.
Step 3: Implement the program
After you know which tools and program type you’re going to use, it’s time to implement it. Set up your software and the tools you need and pick a date to start – this could be right away or at the beginning of the year or quarter, for instance. Make sure that all the necessary stakeholders are involved and educated on the ins and outs of the program. You could hold training sessions for management and employees, to show them how recognize their peers for a job well done, for example.
Step 4: Promote the program to employees
Along with training employees on peer-to-peer recognition, communicate with them when the program launches. Send out a company-wide email, send a message on Slack and any internal message boards, and post about it on social media. Additionally, when you make a new hire, tell them about the program and include information on it in their employee handbook. Once you make the initial announcements, remind employees about the program and how it works whenever you recognize an employee.
Step 5: Measure program effectiveness
To see if your employee recognition program is truly effective, conduct a survey amongst HR, managers, and employees to see how well it’s performing. Track employee engagement and productivity; then, you can see whether or not your program has had a positive influence on both. If not, you can send out an anonymous survey to determine where improvements can be made.
Keep in mind: Compt’s average utilization is 90% -- it’s proven to be an effective way to launch and implement an incredible employee recognition program.
Why Start an Employee Recognition Program?
In the past, the workplace was employer-focused; when employees clocked in and out every day, their sole mission was to make money for the company. But now, the role has switched. To stay competitive and find and retain the top talent out there, employers need to cater to employees’ needs. This means they must recognize them for their efforts, giving their public and private praise when it’s well deserved. Then, they can increase engagement, productivity, and their bottom line.
A structured and effective employee recognition program is a win-win for both employers and employees. By implementing an effective program, you can ensure the longevity of your organization, while demonstrating that you care about workers’ happiness and satisfaction at the same time.
Using Compt for Employee Recognition and Rewards
With Compt, you can use meaningful peer-to-peer recognition and send employee rewards in just a few seconds, making recognition easy and meaningful. No more noncompliant gift cards (you're welcome, CFOs) or an endless marketplace of stuff nobody wants.
Find out more by scheduling your customized demo with Compt today.