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Create A Culture Of Innovation Through Employee Recognition

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Create A Culture Of Innovation Through Employee Recognition

If organizations were to have to generate new business ideas, they need to promote creativity and innovation in the workplace. Creating a culture of innovation through employee recognition is one of the best ways for organizations to build a workforce that constantly churns out new ideas, products, and services.

Nearly 35% of the revenues generated by businesses are from products and services that were developed within the last 5 years, as per different studies.

How can Organizations Create a Culture of Innovation?


Having a culture of innovation provides the right environment for encouraging such activities at the workplace.

The absence of the right culture can discourage employees from investing their time and energy in exploring new ideas and eventually hinder business success.

Here is how organizations can build a culture of innovation:

create a Culture of Innovation

1. Empower Employees and Create an Innovation Funnel

Empower Employees and Create an Innovation Funnel

Organizations need to enable employees to come up with new ideas, and champion and support them to make these into viable business propositions.

Companies like Pixar and Tesla allow employees to come up with new ideas, provide them feedback regularly, and take the best ones to the next level.

2. Provide Time and Resources to Employees to Explore New Ideas

Provide Time and Resources to Employees to Explore New Ideas

Additionally, organizations with a history of innovation allow employees to work on new ideas and projects of their own. They provide employees with the space, tools, and other facilities required to work on such initiatives.

Companies such as 3M dedicate 15% of employees’ time to innovation. The Post-It note was invented during this 15% time.
Google and HP give 20% of the time for innovation. Google Earth and Gmail were invented during this ‘innovation time’.

3. Recognize Innovation Efforts and Remove Fear of Failure

Recognize Innovation Efforts and Remove Fear of Failure

Significantly, innovative companies recognize the efforts of their employees toward innovation.

Organizations reward such efforts and are recognized socially by other employees.

Hence, trial-and-error and test-and-learn are valued in such organizations.

Thus, these organizations understand that it is almost impossible for any successful innovation to be done without facing multiple failures. 

How can Organizations create a Culture of Innovation through Employee Recognition?


Employee Recognition can help organizations motivate their workforce to higher levels of performance and also display the desired behavior in alignment with their corporate values.

Hence, innovation can be promoted by organizations by rewarding and recognizing employees for their efforts and performance toward that goal.

Here’s how:

How can Organizations create a Culture of Innovation through Employee Recognition?

1. Integrate Reward and Recognition with Innovation Efforts

Integrate Reward and Recognition with Innovation Efforts

Integrating the reward and recognition program with the innovation efforts of the employees can motivate them to continue exploring new ideas.

Thus, it demonstrates the support and appreciation of their organizations for their efforts toward innovation and business growth.

So, organizations should give rewards at different stages of the lifecycle of new ideas – ideation, business viability, proof of concept, and monetization/ business impact. 

Monetary values and social visibility of these ideas could vary according to the stage of the idea in the ideas funnel.

2. Incentivize Kaizen, Lean, and Six Sigma Projects

Incentivize Kaizen, Lean and Six Sigma Projects

Continuous improvements and small innovation efforts are also important for the organization to drive higher levels of productivity, efficiency, and business impact.

These projects often help the organization enhance customer satisfaction, productivity, and quality of output, and drive down costs.

3. Organize Challenges, Contests, and Hackathons with Grand Prizes

Organize Challenges, Contests and Hackathons with Grand Prizes

Hackathons, contests, and challenges are effective ways for organizations to find innovative solutions for existing business or technical problems and also to develop new product/ business ideas.

Usually, internal teams would participate in such events.
Organizations should reward teams with the best projects to drive higher levels of participation, innovation, and business impact.

4. Enable Social Recognition for Innovators 

Enable Social Recognition for Innovators 

Additionally, organizations should recognize employees with the best ideas, innovation projects, and initiatives. 

Social visibility and peer recognition can be quite effective in motivating employees towards innovation, in addition to monetary rewards.

Organizations should leverage forums such as online or virtual team meetings, town halls, or award ceremonies to recognize these ‘innovators’

They should also use digital platforms such as the intranet, MS Teams, and Slack channels to create greater social visibility.

Also read: Creating a Culture of Collaboration through Employee Recognition


Innovation is the key for organizations to develop sustainable competitive advantage. Creating a culture of innovation through employee recognition can be an effective way for organizations to drive innovation 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.