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Key Trends For Employee Recognition In 2023

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Key Trends For Employee Recognition In 2023

Employee recognition has come to play a critical role in ensuring the success of organizations. With businesses undergoing economic and technological changes and facing automation and globalization challenges, employee recognition is one factor that is helping maintain workforce performance and culture. Hence, understanding the key trends for employee recognition for 2023 can give organizations an additional competitive advantage.

Additionally, the accelerated evolution of digital workplaces over the last few years has also made organizations and employees rethink their priorities in terms of their workforce. This has catapulted the need to recognize the good work and positive behaviors of employees, in a timely and effective manner, to the forefront.

Employee Rewards and Recognition for A Multi-cultural Workforce

It is essential to keep the employees motivated and engaged, build a positive and flexible work culture, and boost collaboration among the workforce. Studies have shown that highly engaged and motivated employees are 21% more productive and businesses experience a 41% decrease in employee absenteeism.

Employee recognition contributes significantly to strengthening the commitment and loyalty of the employees and enhancing their productivity. Since employee productivity is the key contributor to business growth and success, a highly productive workforce naturally helps to improve the business’s bottom line and enhance the profitability of the organization.

Also read: How Employee Recognition Can Drive Culture Change in 2023

Evolution Of Employee Recognition Over the Past Several Years

The very concept of employee recognition has evolved significantly over the past several years. Today, it is not just about providing the right benefits and rewards to the employees for their good work. Rather it is more focused on enhancing the overall employee experience and their well-being at the workplace. Now, recognition is about acknowledging the individuality of the employees and helping positively redefine their relationship with work and its impact on their lives.

Top Management Role in Employee Rewards and Recognition

Employees today view recognition as much more than getting a better work-life balance, enhanced job security, increased pay, and benefits, or even value alignment. They are questioning the very fundamentals of the organizations they work for and are redefining the importance of work in their lives. This has led them to seek more human-centric employee rewards and recognition programs that will help them thrive and survive in today’s volatile business environments.

Understanding The Changing Recognition Needs Of Employees

The constant upheavals faced by businesses over the last few years have impacted the way they recognize their employees. With the sudden shift to remote working and the evolution of hybrid work environments, traditional recognition methodologies have become obsolete.

In addition, the ongoing economic and social changes have also changed how employees today perceive rewards and recognition. This has created a greater demand for holistic rewards and recognition policies that enhance employee happiness and satisfaction levels at the workplace.

Fun Awards

Employees today are seeking more value-oriented recognition from their employees. They are now more focused on having workplace experiences that positively impact their personal and professional lives.

This can be better understood by the fact that employees today value receiving non-monetary recognition for their good work by their superiors and peers more than receiving a significant monetary reward six months or even a year down the line.

For most employees today, the ability of their employers to recognize their need to get some additional time with family is worth more than any memento or award they might be offered.

Need To Focus on Emerging Recognition Trends Of 2023

With 2022 coming to an end, it is time for business organizations to take a look at their existing recognition policies and revamp them for 2023. For this, organizations need to gain a proper understanding of the emerging key trends for employee recognition in 2023.

Integrate Reward and Recognition with Innovation Efforts

Being aware of these trends proves highly beneficial for organizations looking to take their business to new heights of success in the coming year. This is due to the following reasons:

1. The awareness of these trends makes it easier for organizations to understand the aspects of recognition they need to focus on in the coming year to boost employee effectiveness.
2. The trends provide organizations with a sense of direction in terms of the changes they need to make to their rewards and recognition programs to enhance their impact and efficiency. 
3. Being aware of emerging recognition trends enables organizations to devise the right strategies for improving overall employee experience at the workplace.
4. The trends reflect the expectations of the needs and expectations of the employees and this can help organizations make the right recruitment decisions and develop their hiring strategies accordingly.
5. Staying updated about the emerging recognition trends for 2023 enables organizations to react quickly to any fast-paced changes that might impact employee effectiveness and engagement at the workplace.
6. Being aware of emerging trends helps organizations to make their processes and operations more streamlined and make recognition more cost-effective and efficient.

Key Trends For Employee Recognition in 2023 Organizations Need to Look Out For

Having understood the importance of staying updated about the Key Trends for Employee Recognition in 2023, it is time to learn more about them. Some of the key trends that organizations need to look out for in the coming year include the following:

Key Recognition Trends For 2023 Organizations Need to Look Out For

1. Acceleration in Digitization Of Recognition


Digitization of the recognition programs is essential for making them acceptable to the modern workforce. Using the right employee recognition software helps make the process simpler and more relevant for digitally-driven Gen Z employees, who form a major section of the workforce today.

Digitizing recognition programs also helps promote peer-to-peer recognition besides making it easier for managers and supervisors to offer on-spot recognition. It also makes recognition of remote-working employees more effective and efficient which in turn boosts their sense of belonging and commitment.  Most importantly, digitizing recognition makes it extremely cost-effective and easy to implement.

2. Embedding Recognition Capability In Existing Platforms


Organizations need to ensure that the recognition capability is embedded in their existing platforms. This ensures that the managers and supervisors can continue to recognize employees without navigating to the dedicated recognition platform. Making it possible to trigger employee recognition from the existing systems such as chatbots, collaboration tools, CRM, LMS, and other platforms enhances the cost-effectiveness of the process besides making it simpler to implement and use.

Employees and managers do not need to invest time and effort in familiarizing themselves with the technical aspects of the new recognition platform. Embedding recognition capability in existing systems also helps increase the scalability of the programs to meet the changing workforce needs.

3. Increased Gamification Of Recognition

Enable Social Recognition for Innovators 

Just having an effective employee recognition platform in place is not enough to retain employee interest in the program. Employees are increasingly looking for highly interactive and engaging recognition programs that pique their curiosity and retain their interest. Integration of gamification techniques in the recognition program is an effective way to ensure the same.

Implementing gamification mechanisms such as leaderboards, reward points, recognition through e-cards, offering badges, etc. can help make recognition fun-filled and interactive. Such initiatives help to keep the employees motivated to be a part of the program and also contribute towards building a competitive yet healthy work environment.    

4. Implementing Data-Driven Recognition Strategy

Committed Employees

Ensuring greater transparency in the recognition program is yet another important trend that organizations should focus on in 2023. This is essential to establish the authenticity of the program and improve the employee participation rate.

For this, organizations need to make sure that they follow a data-driven recognition strategy to ensure that only the most deserving are recognized. Implementing such a recognition strategy will help to streamline the recognition process besides making it more impactful and valid. It also helps in eliminating any favoritism or bias in the recognition process and this improves workforce engagement and motivation. 

5. Greater Focus On Analytics

Determine What Systems Are Required

Implementation of people analytics technology as a part of their recognition policies can boost business productivity quite significantly. These technologies offer businesses data-driven insights into the skills and competence of the workforce. This makes it easier for organizations to create effective recognition strategies based on their competence and skills that can help enhance employee performance.

By paying greater attention to people analytics technology, organizations can devise recognition policies and methodologies that are employee-centric. It enables the creation of personalized recognition plans that can boost employee happiness and workplace experience. This will not only help to make the businesses future-proof but also make them aware of what matters to their employees. 

6. Promoting Diversity And Inclusion Through Recognition

A Guide for organizations to ensure Diversity and Inclusiveness at the Workplace

Women form a significantly large part of the modern workforce. That is why it is high time for organizations to modify their male-centric work policies, including those related to recognition, to make them more gender-neutral and inclusive. For this, organizations need to implement a fair and uniform reward and appreciation policy based on the role and contribution of the employees rather than their gender.

Organizations need to offer to eliminate any bias in providing professional growth opportunities as a way of recognizing employees. This will enable more women to compete for higher leadership positions and provide them with opportunities to be a part of the decision-making process.

7. Employee Wellbeing Through Recognition

Wellness App

In the aftermath of the pandemic, employees have been seeking better wellness support from their employers. This trend is likely to continue in the coming year, which is why organizations need to pay greater attention to including wellness benefits in their employee recognition programs.

Making wellness an integral part of the recognition policy is key to enhancing the happiness and satisfaction level of the employees. Businesses should consider offering wellness rewards such as gym or fitness club memberships and providing access to quality medical care and online consultation facilities for employees and their families. It is equally important to create a safe work environment and support the mental and emotional well-being of employees at the workplace.

8. Work Flexibility As Employee Rewards

Flexible Timings

Organizations have often overlooked the importance of offering greater flexibility in terms of work hours to their employee. Even though some organizations used flexible work schedules for a limited period as a way of recognizing the good work of employees, implementing this strategy on a large scale was unthinkable. However, as the pandemic forced employees to work remotely and follow flexible work schedules, businesses became increasingly aware of the benefits of following this strategy.

In the post-pandemic world, work flexibility continues to be a key recognition need for most employees. That is why organizations need to focus on ensuring the same by offering employees the option of remote or hybrid working as a way of recognizing their efforts and their achievements.

9. Driving Collaboration Through Recognition


Working towards creating more collaborative and agile work environments is yet another aspect of employee recognition that businesses need to focus on in 2023. Doing so helps to build a pleasant workspace where employees feel less stressed and enjoy completing the tasks assigned to them.

Rewarding the collective efforts of groups of employees, teams, and even work groups is the best way to promote a collaborative work environment. It helps build trust between employees and also strengthens the camaraderie between coworkers. A collaborative work environment also promotes peer-to-peer recognition and makes it easier for employees to acknowledge and appreciate the hard work and contributions of their peers.

10. Recognizing Positive Behavior

Integrating Employee Recognition with the Organizational Culture

An increasing number of employees today seek to uphold their individuality in the workplace. The ability to fulfill this basic need of employees can enable organizations to build a highly committed and motivated workforce. Recognizing positive employee behaviors that contribute to business growth is an effective way of fulfilling this need.

It helps in assuring the employees that they are cared for and understood as human beings rather than being viewed just as business assets. This, in turn, motivates them to continue giving their best and helps the organization attain its growth objectives by leveraging the specific strengths and capabilities of individual employees.

Final Thoughts

Employee rewards and recognition is evolving continuously; staying updated about the key trends for employee recognition in 2023 can provide businesses with a great competitive advantage. Organizations should be able to identify on those trends that are likely to prove most beneficial for their business and focus on them to build a more productive workforce.

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 in 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.