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Why Do Employee Rewards And Recognition Programs Fail?

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Why Do Employee Rewards And Recognition Programs Fail?

Generally, organizations launch employee rewards and recognition programs with a great deal of fanfare with top-level executive involvement. However, there are many reasons as to why employee rewards and recognition programs fail. In this article, we take a look at a few possible reasons:

What are the Key Reasons for the Failure of Employee Recognition Programs?

1. Lack of executive sponsorship

2. Lack of line manager involvement

3. Lack of ground-level interest

4. The process is too cumbersome

5. The program is frozen in time

Why do Employee Rewards and Recognition Programs fail?

1. Lack of executive sponsorship

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Leadership involvement reduces over time and employee rewards and recognition end up as one of the many HR initiatives.

Leaders tend to shift focus to other initiatives and lose interest in the program as it becomes largely operational.

Organizations that have strong operations and people focus tend to fare better than others.

This is because key employee rewards and recognition-related metrics become integral to their internal operational reviews.

2. Lack of line manager involvement

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Line managers hold the key to the successful implementation of employee rewards and recognition programs.

However, if organizations do not involve them during the design and planning, they will perceive it as yet another management initiative.

This cynicism percolates to their team members and eventually to the entire organization.

The objective of employee rewards and recognition programs is to create a culture of appreciation. Frontline managers and supervisors are critical to the success of the program.

Hence, managers should be involved in the planning and rollout of the program. Participation in the program should be incorporated into their KRAs.

3. Lack of ground-level interest

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Employees might lose interest in the program over time due to diminishing importance or visibility of the program.

Or it could be due to a disconnect with the program objectives or the messed-up implementation from the very inception.

If the organization creates a program without proper input from employees or line managers, then it may fall flat.

It might meet the same fate as other such initiatives once the initial enthusiasm wears off. Hence, employee rewards and recognition programs should be planned only after a dipstick with the employees.

4. The process is too cumbersome

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Implementation challenges might also derail the success of employee rewards and recognition programs.

For example, a cumbersome process with too many criteria might make it difficult for managers to recognize employees.

An operations-heavy process will deter them from going ahead and participating in the program.

This holds for employees as well. If the reward process is too cumbersome, employees might not want to be a part of it.

Hence, the process must be simple and intuitiveDigitizing and automating it might be the icing on the cake.

5. The program is frozen in time

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Employee rewards and recognition programs lose their relevance over time. 

They need to be tweaked regularly to keep pace with the changing requirements of the organization and the workforce.

Organizational priorities might change over time as it grows and as the business environment changes.

For example, achievements related to revenue generation might hold maximum importance when the organization is in the growth phase.

Over time as the growth slows down and the organization matures, there might be an increased focus on cost-saving initiatives.

Also, the changing profile of the workforce might impact the expectations of the employee rewards and recognition program.


Younger and more tech-savvy millennials entering the workforce or more women employees would create different expectations from the program.

Increasingly, peer recognition and self-nomination are becoming mainstream in most employee rewards and recognition programs.

Recognition should not be exclusive to the management. The goal should be to create a culture of appreciation in the organization.

The management should act as catalysts for the program giving it the required importance and visibility in all possible forums.

Hence, organizations should invest in tools that digitize, automate, and streamline employee rewards and recognition programs with minimum operational issues.


These are just a few of the top reasons why employee rewards and recognition programs fail.

Leaders and HR must avoid these pitfalls to keep employees motivated and productive at the workplace. And honestly, this is hardly rocket science.

Employee rewards and recognition programs need continuous support from the management and regular efforts from HR to keep them in sync with changing needs.

The phrase “Change is the only constant” applies to employee rewards and recognition programs as well.

They need to evolve and adapt to the changing organizational priorities, work practices, and employee preferences.

Sagar Chaudhuri

Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of corporate and entrepreneurship experience. 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.