The Guide to Modern Employee Recognition

This guide provides the foundation of knowledge you need to build and support a culture of recognition in your organization.

What is Employee Recognition?

What can I expect from this guide?

The Guide to Modern Employee Recognition covers the knowledge you'll need to successfully understand, cultivate, and support a culture of recognition in your organization.

We'll start by laying a solid foundation for you to build on. Then we'll walk through the basic steps required to successfully prioritize recognition at your own organization, implement a successful recognition program, and maintain an atmosphere of appreciation and recognition in any organization.

How should I use this guide?

You can start with any section you find interesting or useful, but we recommend beginning with the fundamentals and building up from there.

If you're already familiar with the fundamentals, this is a great opportunity to brush up on current best practices and gain new insight.

Let's get started!

What does employee recognition look like?

At its core, employee recognition is the open acknowledgment and expressed appreciation for employees’ contributions.  🎉

It could be a high-five for a job well done, a special shout-out during an all-hands meeting, or even a bonus for meeting a monthly goal. 

Recognition can take many forms, but whatever your approach, it's one of the most valuable areas a team can focus on. Implementing the right kind of recognition program is a critical factor in giving your team the motivation to reach and surpass its goals. Effective employee recognition gives many successful businesses the competitive edge.

According to Gallup, “When recognition hits the mark, employees are five times as likely to be connected to company culture and four times as likely to be engaged.”  Additionally, companies with highly engaged employees are, on average, 23% more profitable, nearly 20% more productive, and have customers that are 10% more loyal. 

With that in mind, teams and organizations across the globe are increasingly adopting and rethinking recognition programs. 

Who gives employee recognition?

Ideally, everyone in an organization should be able to give each other recognition. That said, the most effective source of a particular piece of recognition is based on the situation and circumstance.


Top-down employee recognition

Recognition is traditionally given in a top-down system, where an employee’s supervisor, manager, or leadership team witnesses and appreciates their contributions. 

This is a great model for many reasons: since these leaders are typically in decision-making roles, their recognition often has monetary results, like a raise or promotion. These people are also in the best position to assist employees with their chosen career path or growth plans.

However, giving frequent, real-time, and specific recognition isn't always a simple undertaking for management. It requires managers to witness, catalog, recognize, and reward countless contributions.

In most cases, there are too many valuable contributions made on a daily basis for a recognition approach that is solely top-down to be effective. Most leaders just don’t have the bandwidth to keep track of and acknowledge everyone’s hard work. That’s why the most common form of top-down recognition is an employee’s annual review. 

Unfortunately, annual reviews can be a significant source of stress and typically only highlight an employee’s largest, most visible contributions. Annual reviews also include suggested areas of improvement for employees which can dilute acknowledgements and recognition. 

That’s not to say that managers shouldn’t give recognition at all. On the contrary, they absolutely should! When it comes to completing big-picture objectives, recognition from higher-ranking leaders can emphasize the magnitude of an employee's accomplishment. However, for the day-to-day, it’s a good idea to share the responsibility with the rest of the team.

Peer-to-peer recognition

In a peer-to-peer recognition system, managers as well as other co-workers are all empowered to recognize and reward the contributions of everyone else. It’s easy for managers to congratulate an employee on their general job performance, but their peers are working right beside them, day after day. They're in a much better position to recognize an employee's specific contributions and understand the immediate impact those contributions have.

It's simple. One teammate sees another teammate do something valuable, then praises them for it. 

We also can’t ignore the benefits of bottom-up recognition. Managers need appreciation, too! Recognition is motivating and insightful for everyone, even those in senior positions.

With 360-degree style peer-to-peer recognition, everyone in the company has a voice in expressing their positive feedback and gratitude. When employees recognize direct supervisors and other leaders for their work, it can reinforce positive leadership qualities and increase visibility into work that may have otherwise gone unnoticed. 

Will employee recognition work for my team?

Yes! 😁

Every team can benefit from a recognition program.

Every team can benefit from better, more frequent employee recognition. Having a dedicated employee recognition program can help ensure that recognition is truly effective on your team. 

When you implement a recognition program, you give your employees a way to celebrate one another's achievements. These interactions build stronger team connections, boost company culture, and motivate employees to do their best work. When executed successfully, recognition provides positive peer influence and communicates the notion that good work is valued by everyone in the company. 

Looking at the bottom line, companies that score highest for building a "recognition-rich culture" have 31% lower turnover rates than their peers. What’s more, employees who don’t feel recognized are twice as likely to quit within a year. 

After all, being appreciated just feels good. Why? It strengthens team connections by releasing the flow of oxytocin, the chemical our bodies create when we bond with others. In fact, in 2021, an average of 84% of Bonusly users gave and or received recognition every single month and 92% was peer-to-peer recognition whereas 28% was managers recognizing their direct reports. In addition, in our recent survey of over 2,000 workers, we found that 65% of participants said they would stay at a job with an unappreciative manager if their colleagues and peers still recognized their work.

A recognition-rich culture is a worthy and achievable goal for any organization, in any industry. It benefits the whole team, from the newest hire to the CEO.

The key to success is understanding how employee recognition works and how to implement an effective recognition program on your team.

What will it cost?

Most organizations without a formal recognition program are already spending money on recognition. From organizing celebratory lunches to bulk-buying gift cards, the labor and costs associated with “manual” recognition can add up quickly. This method of recognition tends to be sporadic, unpredictable, inequitable, and time-consuming for leaders or HR employees to manage. 

An effective program normally pays for itself and more in the form of increased motivation, productivity, engagement, and retention. Not to mention, they don’t take a lot of time to manage! In a survey of Bonusly admins, 73% said that they spend less than two hours a a month managing the program.

-> Read More: What is the ROI of Recognition and How to Measure It

But why?

Understanding employee recognition is the first step, and in the next chapter, we'll share why employee recognition is important. Read more below to learn about the many benefits of employee recognition and how using a recognition program like Bonusly can be an extremely effective way for teams to feel valued, perform better, stay engaged, and more. We invite you to start a free trial or join us for a demo to learn more about how you can start building a recognition-rich organizational culture.

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