Types of recognition & rewards

What are rewards, and what is recognition?

Rewards and recognition are often used interchangeably, but there are some apparent differences. Rewards are usually tied to employee performance and are treated separately from the salary.

More and more companies are finding ways to build rewards systems into their budgets. Recognition, on the other hand, can be monetary or not and is used to show appreciation for the work employees are doing.

Recognition is often used to boost morale and highlight departments of specific people doing a great job. It is usually tied to a particular time rather than an overall performance and doesn't include a monetary reward.

What are the types of recognition and rewards?

Recognition and rewards can vary from company to company depending on their values, size, location distribution, and budget. Some of the most common ways employees get recognized through bonuses and praise.

Typically there is a structure in place for an annual review tied for a potential bonus or raise. Another way to go is using All Hands meetings to bring the spotlight on specific employees.

In both scenarios, the recognition is often top-down (manager initiated) and somewhat sporadic. Are employees only doing a great job once a month or a year? Most likely not, and they should get recognized more often as well.

What types of recognition do employees usually get?

The types of recognition that employees are most familiar with are bonuses and praise. Bonuses are a small (or large) financial reward for overall performance or contribution.

Bonuses are typically given by a manager and are rarely public knowledge. Written or verbal praise is another way companies show appreciation for their employees. Those can be public (think: a company meeting, a kick-off event) or private (as one would during a one-on-one with a manager or during an annual review).

Those are the most common rewards types, and while appreciated, they rarely happen often and even more rarely publicly. It's essential to find ways beyond the basics to show the value employees bring and create a culture where appreciation is not just a word in the website's Core Values section.

Recognition could take on many different shapes and sizes. Giving employees an ability to recognize each other with rewards that will add up helps create a work culture that fosters hard work, creativity, and humanity. Small written notes, shoutouts, and public acknowledgment can go a long way in preventing churn. Let's examine a few that are proven to improve company culture and morale.

What are the examples of rewards and recognition?

Here are some examples of rewards that can be implemented in your employee recognition program:

Cash – One of the most commonly used rewards is cash. It often comes in the form of a bonus and is typically tied to the employee's overall performance over a particular time. What is crucial to remember, as Patricia Odell reported before, "Cash is no longer the ultimate motivator," so even though people will appreciate the financial reward, it is essential to make sure it is not the only thing in the rewards system. "The study found," Odell wrote, "that non-cash awards programs would work better than cash in such cases as reinforcing organizational values and cultures, improving teamwork, increasing customer satisfaction, and motivating specific behaviors among other programs."
PTO – Paid time off is another way a company can reward an employee for their performance. It can be a standard reward amongst bigger organizations and companies that tend to have a rather strict paid time off otherwise. It is an easy way to show employees that their hard work and dedication are essential and rewarded with extra rest.
Stock Options – A common way for startups and SMBs to show their employees that their performance has helped them grow revenue or achieve new goals is by giving out additional stock options. It is a huge incentive for employees who have been with the company for a long time and are invested in its success. The stock's performance and value are directly related to the company's success, so while rewarding an employee with stock options is beneficial for them, it also motivates them to work harder to succeed.
Nominations – An employee of the month is a reward that management gives out to one employee at the end of the month to showcase their achievements and hard work. Often with the title of the employee of the month comes a small financial reward, but a monetary reward is certainly not required. In fact, fun trophies and medals can go a long way! Public recognition is a beneficial way to show employees their work doesn't go unnoticed, and they can be celebrated for their achievements every month.
Lunch with an Executive – A lunch with a member of the executive team is a great way to show employees that management is willing to notice and take time to recognize the best performers. Everyone knows how busy CEO or CMO could be, so having the ability to spend one-on-one time with them and learn more or share is a critical way to bring people and executives together while also recognizing hard work.
Personal Learning Time – Time is one of the most valuable assets a company can give or take. Employees spend a considerable portion of their day and week at work, so recognizing their effort and time put in with an ability to take personal time to learn and grow will inevitably go a long way.
Explore A Different Role – How fun and enriching would it be to learn more about what other people in the company do and get to share their responsibilities for the day? Employees who know other departments' work and pain points are more likely to be better coworkers, understand partners, and have fresh ideas.
Company Swag – Everyone loves swag - there is something extraordinary about exclusive pieces of clothing or other company-branded stuff. Allow employees to earn some exclusive for the rewards program swag. It will also serve as an extra promotion of the brand.
Coaching & Mentorship – Mentorship is one of the most exclusive and valuable opportunities employees search for. Being able to get advice, grow, and get mentored provides employees with an understanding that the company cares about their personal and professional growth and is willing to invest in their success.
Paid Classes & Courses – Employees need to have time to develop and refine their skills - it will make them better at their jobs, increase their area of influence, and bring more confidence. Adding company-paid courses or classes to how you recognize employees is one of the most fulfilling for both parties. Taking the time to grow and educate yourself is a significant reward that will keep on giving.