Employee recognition is a critical aspect of any organization looking to create a great workplace culture. Organizations need to design and implement a good recognition system that impacts key business metrics such as employee engagement, retention rates, and even employer branding. Hence organizations need to be aware of the important steps involved in developing such employee rewards and recognition programs. We have created this step-by-step guide on how to set up an employee recognition program to help organizations to design and implement a program that delivers on its business objectives.
What is the Significance of a Good Employee Recognition Program?
1. Appreciation is a basic human need
Being appreciated for their efforts and hard work is a basic human need cherished by most employees. Recognizing employees is about investing time into their existence and acknowledging their contribution by saying thank you when it matters the most.
Receiving timely acknowledgement and appreciation assures the employees that their work is truly valued.
2. Motivation to perform better
This, in turn, motivates them to keep repeating their good work and positive behaviour besides encouraging them to go beyond their established limits.
3. Commitment towards the business goals
Employee recognition satisfies an employee’s desire to feel special and inspires them to invest their time and effort in an even more improved manner towards the fulfilment of set business goals.
4. Positive work culture
Organizations having effective employee rewards and recognition systems in place generally boast of a positive and productive work environment.
Such environments naturally motivate the employees to contribute their best in the way of helping the organizations to fulfil their objectives.
5. Focus on performance and innovation It also helps in creating a culture of high-performance and mutual acceptance as well as a strong focus on driving 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 to gain all the aforementioned benefits and save valuable time and effort.
Here are the steps, one by one:
1. Define the business objectives clearly: The first and the most important step towards creating a credible and result-oriented employee recognition system is for the organization to clearly establish the business objectives of the program. It should be well-aligned with the mission, vision and the 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.
For example, an organization that is looking to grow rapidly as its mission and also foster collaboration among its employees as one of its core values should incorporate these as business objectives of the program.
This will help the organization consider the recognition strategies focused on the fulfilment of these objectives.
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 is a critical step as it helps the organization to identify the strategies that would work best in their context.
However every employee rewards and recognition program needs to be tailored based on the specific business objectives, and employee needs and expectations.
In most cases, the organization may need to use a combination of multiple best practices to develop the most effective recognition system for them. For example, peer-to-peer recognition as a practice is growing in popularity.
However, the traditional practice of awards given by the management is also important for employees. Hence, a combination of the above methods might be considered by the organization.
3. Define appropriate rewards and recognition policy: Defining the right policies for employee rewards and recognition helps the organization to create a strong framework for executing the system efficiently.
The process includes identification of the different categories for which recognition will be awarded, deciding the criteria that would make the employee eligible for recognition for each category of recognition, and establishing a process in which recognition will be given to the employees.
Organizations may choose to reward employees for their performance, behaviour, or even their loyalty and commitment to the organization. Similarly, they need to set appropriate criteria to ensure that the recognition program sees the involvement of a maximum number of employees while remaining aspirational for them.
The reward and recognition policy would define how frequently and in what way is the recognition given – digitally, in person at a team meeting or in an annual meet.
4. Decide on the budget and get it approved: Every recognition program should have a well-defined budget based on the rewards and recognition policies established by the organization. The budget for the program needs to be decided and approved by the relevant authorities within the organization.
To define the budget, the organization needs to carefully assess the different aspects of the recognition program such as the form of recognition, the number of employees to be recognized, and the frequency of recognition.
The important point here for the organization to understand is that it is possible to have an effective recognition program even with a limited budget. It is not necessary for an organization to invest in expensive rewards to recognize their employees.
Rather it is the timing and intent of the recognition that matters the most. Hence simple handwritten thank you notes from the CEO may provide better results than the iPad given by the organization to every top performer.
5. Choose the right technology platform: Investing in a good employee rewards platform can make the whole process simple and more effective. Organizations, today can choose from a wide range of recognition software and platforms or even invest in the development of a platform specifically tailored for their needs.
The technology platform should make the recognition process more convenient and transparent and provides a better employee experience. It should also reduce the administrative overheads of the HR team involved in managing the program.
It is advisable to choose a platform after careful consideration of its compatibility with the recognition policies defined by the organization. Organizations also need to look at the ease of use of the platform and its integration with social media channels and key IT systems.
Other important aspects to be considered may include the level of employee engagement offered and the availability of customizable peer-to-peer 6. recognition features.
6. Plan the roll-out and communication for the launch: Once the basic prototype of the employee reward and recognition system has been developed and tested, it is time to start planning for the final roll-out.
The organization needs to decide on the launch plan for the program and how the communication about the same would be done to the employees. The plan should ensure that all the aspects of program roll-out are managed, implemented, and executed in a smooth and hassle-free manner.
Contrary to the popular belief, it is advisable for the organization to plan the recognition program roll out with a big bang. A hush-hush affair in this context may make the employees feel sceptical about the whole concept from the moment it is implemented.
A phased-roll-out might be considered if the workforce is large and distributed and there are challenges associated with certain sections of the workforce in relation to the usage of the platform. Irrespective of the roll-out plan, the communication plan needs to properly crafted with a series of communication using multiple modes and with the involvement of the senior management.
7. Train the key users of the program: Providing proper training to the key people involved in the recognition program is essential to ensure its successful implementation. The key users would generally comprise of the HR Team, managers, and supervisors and even employees empowered to nominate their colleagues or confer recognition on their peers.
Making them aware of the policy details, recognition categories in the program and the key criteria for such recognition are some of the essential aspects of such training.
If the organization is using a technology platform to implement its employee recognition program, then it is also important to ensure that the key participants are well-versed in the use of the specific recognition platform.
Without adequate training or orientation, program participants may find the platform too cumbersome or complicated to use and might lose interest in the same. This will hamper the proper execution of the program and delivery of expected results.
8. Track the program metrics and usage post-launch: Once the employee recognition program has been launched, tracking its usage and measuring the key metrics is of utmost importance. In this context, the organization needs to monitor the performance of the recognition program vis-à-vis the program objectives i.e. whether or not it has been successful in driving expected results.
In addition, the organization also needs to measure the impact of the program on important metrics such as the level of employee engagement, satisfaction, happiness at the workplace, and improvement in their efficiency and performance.
It would be unrealistic for organizations to expect immediate results after launching the rewards and recognition program.
However, by measuring the key metrics and analyzing the program usage over a reasonable period of time, it is possible to determine its relative success or failure. This will help the organization to take any corrective action that may be required to ensure its success.
9. Reporting program performance to the Top Management: Apart from measuring and analyzing the program performance, it needs to be reported to the top management on a regular basis. 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 results that were expected for them to continue funding the program. The management might also reconsider the budget approved for the program if they are convinced that is what is hindering the success of the program.
The management might also ask the HR team to re-look at the program including the policy and implementation to drive better results or even revamp it completely.
10. Get regular feedback from users and beneficiaries: No recognition program is perfect, although some are created better than others. Hence, every program has a scope for improvement.
It is important to get regular feedback from both the end-users and the beneficiaries about their overall experience and various aspects of the program. Such feedback provides vital inputs for making changes in the recognition policy framework, process or the system.
The organization can use various methods to seek feedback from employees about the recognition program. They can use an online feedback survey with a questionnaire that is emailed to the employees. In addition, organizations can also use feedback sessions with different groups of employees.
11. Act on the feedback: The whole idea of taking feedback is to analyze and act on the data captured. This would require a careful analysis of the data to find the most common and critical grievances against the program. Once these issues are defined, the organization needs to find the best ways to resolve the same.
The organization needs to realize that employee needs and preferences, as well as the business realities, might have changed over time diluting the effectiveness of the program developed several years ago.
In most cases, the data captured from the feedback might require the organization to simply tweak the program only slightly to get the desired results.
However, many times it might be necessary to make drastic changes to prevent the program from failing completely. In either case, implementing the necessary changes is the key to building 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 several organizations that have successfully implemented employee recognition programs. Each of these steps plays a critical role in laying a strong foundation for building a recognition driven organization culture that promotes innovation, performance and business growth.
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