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Guide to Employee Recognition in a Startup Environment

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Guide to Employee Recognition in a Startup Environment

Working in a startup is exciting, however, it can be stressful, with its dynamic goals, unclear roles, and overall chaos. The importance of keeping the employees motivated and engaged in a startup culture, cannot be underestimated. While most large organizations have employee recognition programs, things need to be done differently in startups to get the best results.

What is the Importance of Employee Recognition in Startups?

Comprehensive Guide for Engaging a Multi-generation Workforce

Startups today are the most happening workplaces for young professionals.

This is primarily due to the learning and growth opportunities; and the exposure to new technologies and business models.

However, most startups have small teams and employees have to take up multiple responsibilities and massive amounts of workload.

This requires employees to stretch beyond their usual capabilities and working hours to drive business growth.

This is true for all startups whether self-funded, funded by investors, or part of a larger organization.

Therefore, in startup environments, recognizing and appreciating the efforts of employees can go a long way in establishing an emotional connect and sense of belonging with the organization.

Effective employee recognition in startups cannot be run conventionally, it requires a different mindset, mindful planning, and execution.

How to Recognize Employees in a Startup?

Enable Social Recognition for Innovators 

One of the key aspects of managing employee recognition is to make it meaningful for the employees individually.

Hence, it is important to gain a better understanding of how each employee is likely to respond to recognition. 

This is generally a little easier in a startup as the number of employees is usually small.

The key elements of every effective employee recognition program in a startup are as follows:

Guide to Employee Recognition in a Start-up Environment

1. Well Defined Criteria

How to Build an Effective Business Case for Employee Recognition

A startup organization needs to have well-defined criteria that form the base of its employee recognition program.

Employees should be recognized and appreciated not only for their achievements but also for their attitude and behavior.

The HR should ensure that the employees are well aware of the criteria for different rewards and recognition.

At the same time, the criteria should be flexible to meet the changing needs as the organization grows.

2. Timeliness of Recognition

Recognizing and rewarding the efforts of an employee well in time will ensure the effectiveness of the program.

Any delays in the process can have a significant negative impact on employee motivation.

Startups can address this by designating a specific day of the month for handing out rewards and recognition to eligible employees.

Alternately, early-stage startups can choose to acknowledge and appreciate employees regularly and on the go using a technology platform.

3. Fairness of Recognition

Fun Awards

The most important aspect of ensuring the effectiveness of an employee recognition program is to ensure its fairness.

It is common for some employees to take credit for other’s work to get appreciation from higher-ups.

Recognizing such employees is not just unfair but can also negatively impact employee motivation.

Hence, HR needs to ensure complete fairness in the process and reward only deserving employees.

4. Variety in Rewards

Freedom of Choice

Providing variety in the rewards being given to employees is also something that startups should consider.

Offering the same rewards to different employees for diverse reasons makes the whole process seem formal and monotonous.

By adding a bit of variety, startups can keep the whole process innovative and interesting.

It would add a bit of surprise and excitement as employees would keep guessing until the very last moment.

5. Individual Meaningfulness


Finally, the startups need to ensure that the rewards being given hold some meaning for each employee. 

They need to understand that every individual is different and perceives appreciation and recognition differently.

For some employees, true recognition might mean the announcement of their achievements in public. For others, it might be a few words of praise by their seniors in private.

The same holds for rewards. For some, cash might hold greater value. For others, it might be a gift voucher or a sponsored training program.

Read 8 Creative Ideas for Startups to Recognize Employees and 5 Low Budget Ideas for Employee Rewards and Recognition

Also read: The HiFives Case Study of Employee Recognition at a Startup


Considering the above points, startup organizations can develop truly effective and result-oriented employee rewards and recognition programs that can enhance workforce performance and motivation significantly, and accelerate 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.