1. Employee Performance and Business Impact

Done in the right way, employee rewards and recognition can reinforce good performance by employees, which would have a direct or indirect impact on business metrics such as revenues, costs, customer satisfaction, etc.

For example, an employee who gets an award for achieving high levels of customer satisfaction is more often than not likely to continue to perform at the same or higher level. It might also motivate his peers to demonstrate higher levels of performance. The same would be true for an employee who is being recognized for cutting costs or driving innovation.

2. Alignment with Organizational Values

If executed well, employee rewards and recognition programs can deliver the desired behavior from employees in sync with the organization’s core values and beliefs such as ethics, commitment, customer-centricity, passion or collaboration.

For example, an employee who has worked on an important project to meet a critical deadline might be eligible for an award under the category of commitment.

Another one could be that of an employee who might have resisted attempts by a third-party to secure a contract by trying to offer ‘personal incentives’ to the employee. In both these examples, the behavior and the outcomes should be kept separate.

3. Positive Work Culture

The organization can drive specific behaviors such as innovation, process efficiency, punctuality, social awareness, etc. through employee rewards and recognition programs.

For example, employees can be incentivized for good suggestions on process improvement. Another example could be of recognizing an employee who has participated in a social initiative or sporting event outside the organization.

It is difficult to incentivize such behaviors through the traditional performance assessment and regular compensation system. Hence employee rewards and recognition could be a useful tool in the HR team’s toolkit to drive such behaviors.

4. Teamwork and Collaboration

Employee rewards and recognition can help create a positive atmosphere of celebration within the organization. It can help foster individual-level motivation and overall team spirit. Open recognition of employee achievements can go a long way in building a great culture of appreciation of each other’s efforts.