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A Step-by-Step Guide on How to Set up an Employee Recognition Program

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A Step-by-Step Guide on How to Set up an Employee Recognition Program

Most organizations are looking to have a good recognition system that boosts employee engagement, retention rates, and even employer branding. This step-by-step guide on how to set up an employee recognition program can help organizations implement a program that delivers great results.

What is the Significance of a Good Employee Recognition Program?

Significance of a Good Employee Recognition Program

1. Appreciation is a Basic Human Need

Employee Appreciation

Being appreciated for their efforts and hard work is a basic human need cherished by most employees.

Recognizing employees is about acknowledging their contribution by saying thank you when it matters the most. 

Receiving timely acknowledgment and appreciation assures employees that the organization truly values their work.

2. Drives Motivation to Perform Better


This, in turn, motivates them to keep doing good work and displaying positive behavior.

It also encourages them to perform beyond expectations.

3. Increases Commitment towards Business Goals


Recognition can make employees feel special and inspire them to put in more effort toward the fulfillment of business goals.

4. Creates a Positive Work Culture

Integrating Employee Recognition with the Organizational Culture

Organizations having effective employee rewards and recognition systems in place generally boast of a positive and productive work environment. 

Hence, such work environments naturally motivate employees to contribute their best towards the growth and success of their organizations.

5. Promotes Performance and Innovation

Committed Employees

Also, it helps organizations create a culture of high performance, mutual respect, and innovation.

How to Set Up an Employee Recognition Program?

This step-by-step guide on how to set up an employee recognition program can help organizations derive the desired benefits from the program.

Here are the steps, one by one:

Key steps to set up an effective employee rewards and recognition program

1. Define the Business Objectives Clearly

How to Build an Effective Business Case for Employee Recognition

The first important step towards creating a result-oriented employee recognition system is to establish the business objectives.

Hence, it should be well-aligned with the mission, vision, and core values of the organization.

These objectives can help in creating the framework for the recognition program and enable it to achieve the desired outcomes.

2. Gain a Thorough Understanding of the Best Practices

The next step involves conducting in-depth research about the various best practices prevalent in the domain of employee recognition. 

This can help the organization identify the strategies that would work best in their context.

However, every program needs to meet the specific business objectives, as well as employee needs and expectations.

In most cases, the organization may need to find the best combination of best practices for themselves.

3. Define Appropriate Rewards and Recognition Policy

Key Aspects of Designing Rewards & Recognition Policy

Defining the right policies for employee recognition helps the organization create a strong framework for executing the system efficiently.

It includes the identification of the different categories of recognition, deciding the eligibility criteria, frequecy and mode for each, and defining the process.

Organizations may choose to reward employees for their performance, behavior, or even their loyalty and commitment to the organization.

Similarly, they need to ensure that the recognition program sees maximum coverage while remaining aspirational.

4. Decide on the Budget and Get the Approvals

Seek Funding For The Program

Every recognition program should have a well-defined budget based on the rewards and recognition policies established by the organization. The management needs to decide and approve the budget.

To decide on the budget, the organization needs to consider factors such as types of recognition, headcount, employee profile, etc.

However, the organization should understand that it is possible to have an effective recognition program even with a limited budget.

Rather it is the timing and intent of the recognition that matters the most. 

5. Choose the Right Technology Platform


Also, investing in a good employee rewards platform can make the whole process simple and more effective.

Importantly, the technology platform should make the recognition process more convenient and transparent and provide a better employee experience. 

It should also reduce the administrative overhead of the HR team involved in managing the program.

It is advisable to choose a platform after considering its compatibility with the recognition policies defined by the organization.

Organizations need to look at the ease of use of the platform. Also, they should consider its integration with social media channels and key IT systems.

6. Plan the Roll-out and Communication for the Launch

traction for employee recognition programs

Once the employee reward system has been configured and tested, it is time to start planning for the final roll-out.

The organization needs to decide on the launch and communication plan for the program.

The organization should plan the recognition program rollout with a high-visibility launch campaign or event.

There should be a series of communications through multiple channels, with the proper involvement of the senior management.

7. Train the Key Users of the Program

Learning and Development can Promote Employee Engagement

Providing proper training to the key people involved in the recognition program is essential to ensure its successful implementation.

This should include the HR Team, managers, supervisors, and others empowered to nominate employees.

The recognition policy details, recognition categories, eligibility, and key criteria should be part of these training sessions.

It is also important to ensure that the key participants are comfortable with the usage of the recognition platform.

8. Track the Program Metrics and Usage Post-launch

Determine What Systems Are Required

Also, after the launch of the program, tracking the usage and other key metrics is of utmost importance.

Hence, the organization needs to monitor program performance vis-à-vis its objectives to see if it is driving the right results.

The organization also needs to measure the impact of the program on metrics such as employee engagement, satisfaction, happiness at the workplace, and improvement in efficiency and performance. 

However, measuring and analyzing the key program metrics over time and taking any corrective action that may be necessary for its success.

9. Report Performance to the Top Management

Apart from capturing the key metrics of the program performance, they need to be reported to the top management regularly.

The management needs to review the impact of the program and the returns on investment in launching the program.

They need to be convinced that the program is delivering the expected results so that its funding should be continued, increased, or reduced.

They may also ask HR to relook at the program design for better results or even revamp it completely.

10. Get Regular Feedback from End-users and Stakeholders


It is important to get regular feedback from all end-users about their overall experience of the program and its nuances.

Such feedback provides vital inputs for making changes in the recognition policy framework, process, or system.

The organization can use various methods to seek feedback from employees about the recognition program.

They can use online feedback surveys and interactive feedback sessions to collect feedback from employees.

11. Act on the Feedback

Measuring the Success of Employee Recognition Programs

Careful analysis of the data collected through employee feedback to find the most common and critical grievances against the program.

After identifying the key issues, the organization needs to find the best ways to resolve them.

So, it is important to understand that employee needs and business realities, change over time impacting the effectiveness of a program designed years ago.

Hence, by implementing the necessary changes, the organization can build a truly efficient, engaging, and result-oriented rewards and recognition program.


This step-by-step guide on how to set up an employee recognition program is based on best practices from organizations that have successfully implemented employee recognition programs. It can help build a recognition-driven organization culture that promotes innovation, performance and business growth.

Sagar Chaudhuri

Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of experience in the corporate world and entrepreneurship. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank, in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn

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HiFives is a global employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. It is used by 100+ large enterprises, small businesses and startups in manufacturing, retail, technology, financial services and media, across 25+ countries.