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5 Steps to An Effective Employee Rewards and Recognition System

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Communication for Successful Employee Rewards and Recognition

The significance of employee appreciation and recognition in enhancing the satisfaction and motivation levels of the workforce is well-known. Even smaller organizations can implement employee and recognition rewards systems with minimal budgets.

What Happens if the Organization has no Employee Recognition Program?

Frequent appreciation and rewards for good work drive most employees to work with high levels of dedication and effectiveness

However, when an organization fails to establish a proper rewards and recognition program for its employees, it unwittingly sends a wrong message to its existing as well as potential employees.


Also, they start feeling unsure about their value in the organization and the professional growth opportunities they would get there.

Most importantly, a lack of appreciation for good work, ideas, and efforts can lead to a loss of interest in their work.

Hence, this reduces employee engagement levels leading to a significant downfall in productivity

What are the Key Steps to Develop an Effective Employee Rewards and Recognition System?

Given the pitfalls of not having an employee rewards program, let’s look at 5 easy steps for the development of such a program:

5 Steps to an Effective Employee Rewards and Recognition System

1. Have a Clear Vision of the Program Goals

How to Build an Effective Business Case for Employee Recognition

Before starting the rewards and recognition program, organizations should have a clear understanding of the objectives of the program.

They should have a good idea of the business benefits expected from the program apart from boosting the morale of employees.

Additionally, they need to know about the values and behaviors they intend to reinforce among employees through the recognition program.

Hence, a clear vision of program goals and communicating the same to employees can help establish a strong base for success.

2. Seek Input from a Cross-section of Employees

Once the objectives of the program have been defined, organizations should seek input from employees across different levels and departments.

Their suggestions about the types of recognition, the eligibility, and the process should be incorporated suitably.

Hence, this helps in establishing a sense of trust among employees and makes them feel integral to the program.

It also lends greater credibility to the system in their eyes if their views and opinions are taken into consideration.

3. Set up a Rewards and Recognition Steering Committee


Setting up a committee for running and managing the rewards and recognition program is of utmost importance.

So, it ensures fairness and transparency with proper representation from all stakeholders.

The committee can also handle the nitty-gritty including organizing regular reward functions and deciding on the best rewards.

4. Establish Nomination and Selection Guidelines

Building a Culture of Appreciation through Employee Recognition

Setting up proper guidelines for eligibility and selection of award recipients is the next important step.

Hence, HR needs to work closely with the committee to ensure that enough opportunities are there for all employees to get recognition.

Rewards can be of different categories to ensure fair opportunities for employees across levels within the organization.

5. Announce and Launch the Program

traction for employee recognition programs

Before the program launches, the organization should inform employees of the objectives, eligibility criteria, and selection process.

Hence, they should send an email detailing the various aspects of the program to all employees.

In addition, the rewards committee should answer any queries to drive employee interest, confidence, and participation in the program.


Most great employee reward and recognition systems are not established overnight but these basic steps can help them to move in the right direction towards success.

These steps should be as per the unique requirements of individual organizations to get the maximum benefits.

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.