Employee

recognition
Good practice manual
Employee recognition:
Good practice manual
Recognising employees for their performance Our good practice guide explains the
is key to ensuring your workforce stays importance of building a recognition culture,
motivated and engaged. Recognition for a and provides guidance on introducing an
job well done can take many forms from employee recognition scheme.
a manager saying a simple “thank you”, to
a local, fairly informal, team presentation,
to a high-profile business-wide awards event.

The guide covers:

> Overview

> Recognition and recognition schemes

> Aims and objectives

> Developing the business case

> Designing the recognition scheme

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 Employee recognition: Good practice manual

Overview training, perhaps accompanied by some guidelines for

managers. It also means ensuring that the leaders in
the organisation role model this behaviour. To secure
This section of the XpertHR good practice manual their engagement, it may be particularly important to
discusses employee recognition. It explains the share with leaders and managers some of the research
importance of building a recognition culture, as well as evidence showing the positive impact that recognition
providing guidance on introducing both informal and can have on organisational success.
formal employee recognition schemes.
Recognition and incentive
Recognition and Recognition is the act of praise or thanks that leads

recognition schemes someone to feel recognised for what they have done.
This is quite different from an incentive that seeks to
motivate an individual to do something. An incentive
Recognition is "acknowledging or giving special attention must be of value to the potential recipient, otherwise it
to a high level of accomplishment or performance, such will not incentivise. Recognition, on the other hand, does
as customer care or support to colleagues, which is not not require a high-value award, or indeed any award,
dependent on achievement against a given target or although awards are common in recognition programmes.
objective" (Rose, 2011). Recognition is not about setting
targets and rewarding people for achieving them; it is The recognition continuum
simply about recognising the great things that people
are doing. Recognition can occur in many different forms and may
be looked at as a continuum, as shown below (Rose, 2011).
A recognition scheme formalises the act of recognition
through a (typically) centrally managed and controlled
process, often with nominations and tiers of awards. Day-to-day Informal Formal

Recognition and managers Just saying Local, low- Corporate,

focused key, simple, high-profile,
If an organisation is serious about recognition, having a "thank you" maybe major
specific recognition scheme may be only part of building small gift presentation

a recognition culture within the organisation. It will be

vital for the organisation to cultivate a management style Organisations often think it is necessary to take a
that sees basic recognition as being part of effective more formal approach to recognition, and so start
management. As a matter of course, managers should with a formal scheme. However, the day-to-day end
be thanking employees for good work and contributions of the continuum can have the greatest impact for the
and saying "well done" when it is merited, rather than lowest, and often no, cost. This can be achieved by
commenting only on the negatives. ensuring that managers are aware of the importance of
a simple "thanks" and recognition of employees, and
To maximise the value from recognition and build a that this forms part of the organisation's management
recognition culture, organisations should take an holistic training and development. As one moves to more
approach to recognition. This means ensuring that formal recognition,there is a greater cost and more
recognition is part of the management and leadership infrastructure is required.

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 Employee recognition: Good practice manual

The importance of recognition situation can set an aim to improve the recognition
score over the next two or three years and monitor how
The importance of recognition on employee it moves as they introduce recognition initiatives.
motivation and engagement is well documented
(Wagner & Harter, 2006 and Rose, 2018). It can be The clearer and more precise that the scheme's
significant in how engaged employees feel at work, objectives are, the more likely it is that the scheme will
and a lack of recognition can have a detrimental be well understood by both employees and managers,
impact on labour turnover. An employee who feels and viewed as having merit. Backing and support
that their efforts go unrecognised is more likely from the top of the organisation will assist with the
to move on, potentially resulting in the loss of a programme's success.
valuable member of staff. Conversely, employees who
have been recognised for their positive behaviour While recognition is important to most people, the
are more likely to exhibit those behaviours again, format will need to differ according to the culture of
leading to further performance and/or productivity the business. The following themes reflect the most
improvements for the organisation. Ensuring that common ways in which recognition can have an
employees are recognised will help to create a positive impact, and are often the basis of the aims that are set.
working environment, meaning employees want to
come to work and make an impact. Recognition and engagement

Many organisations have found, and research

Aims and objectives shows, that there is a strong link between employee
engagement and a number of corporate financial
The approach that an organisation takes to recognition metrics. Therefore increasing the level of engagement
should be driven by its values and strategic aims. among the workforce is an important part of improving
As with any other initiative, simply introducing a organisational performance. Recognition is a
recognition scheme is unlikely to have much impact component of engagement and many organisations
unless it fits with the culture of the organisation. seek to raise levels of recognition as part of their desire
to improve employee engagement.
It is fundamental that the organisation has a
Organisations may choose to include one or
clear understanding of what it wishes to achieve
more questions on employee recognition in their
by introducing the programme. Understanding
employee engagement survey. This can provide
what success will look like from the start will help
both the rationale for introducing a recognition
the organisation to focus on the design and the
scheme and the means by which its impact can be
measurement of the impact and success of the
reasonably measured.
programme. This will enable the organisation to create
a baseline against which it can judge and assess
For more information see Employee
change. For example, success could be as simple as
engagement surveys.
increased productivity or a reduction in absenteeism.

A lack of recognition is often identified from employee

engagement survey results. Organisations in this

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 Employee recognition: Good practice manual

Recognition and values Recognition and cross-working

Many companies have developed a set of corporate As the complexity and range of products and services
values to help reflect the culture and behaviours that has grown, organisations have become more complex
they see as important. However, it can be difficult and flexible. There is a greater than ever need for
for organisations to turn the "values on a page"into interdependence and cross-working between different
real change in the way in which people behave. A teams and departments. The effectiveness of inter-team
recognition scheme can help by linking recognition or inter-department working is commonly covered in
and the values so that the scheme reinforces engagement surveys. Encouraging recognition between
behaviours exemplifying the values. teams can help build cross-team cooperation, hence
better organisational performance. Where this is one of
One of the benefits of this approach is that it should the objectives of a recognition scheme, changes can be
allow the organisation to capture stories of things hat monitored through the employee engagement survey.
people have actually done for which they have been
recognised. These stories can be important in helping As an example, in a sales-driven organisation, the
everyone to see what the values actually mean. individuals from outside the sales team who have
A recognition scheme may, therefore, have as an contributed most to the success of the sales force
objective helping to clarify what particular behaviours could be invited to join the sales team at that year's
look like and so encouraging a behaviour or a change sales celebration.
of behaviour among employees, linked to a business
value or desired culture. Recognition and customers
If a scheme is built around an organisation's business It is common across the service sector, for example in
values, it is important that the senior managers of restaurants and hotels, for customers to be given the
the organisation actually demonstrate and live the opportunity to give feedback on the service received
values themselves, or the programme is likely to fall from members of staff. However, other organisations
into disrepute. could also consider what customers would want to
recognise. An aim of a recognition scheme might
Recognition and creativity and innovation therefore be "to improve customer service", which can
also cover internal customers.
Encouraging creativity and innovation is vital in
most organisations nowadays. Research shows that
incentives are more likely to limit thinking and reduce
creativity. However, recognition can play an important
part. Research found that recognised employees can
be 33% more likely to be innovative and generate
more ideas than those not recognised (Rose, 2018).
Some organisations have taken this further and have
recognition specifically where an innovation was
tried but was not successful. For example, one global
conglomerate has a "Dare to try" award.

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 Employee recognition: Good practice manual

Developing the business case > Proposed approach: State what the programme will
look like, which could be informal or more formal. The
intention might perhaps be to start with an informal
As with any initiative, it is likely that a business approach and build up to a more formal scheme over
case for an employee recognition scheme will be a longer period. If so, state the time frame.
required. Before starting to build their business case,
organisations should carry out both internal and > Costs and benefits: Set out the costs. If the
external research. organisation is establishing a more formal programme
there may be supplier costs as well as the costs of
They should assess what recognition is already awards. Even if the programme is informal, there
taking place within their organisation. Even without a will be a time cost associated with developing
formal recognition programme there are likely to be communication materials and conducting employee
managers undertaking good practice in recognising briefings. Set out the benefits. These will be based
employees; they may be able to provide guidance on on the aims, and could include higher engagement
what is already effective, which could be leveraged levels, better customer satisfaction or lower
going forward. employee turnover.

They should also look at what other organisations are > Project plan/timetable: State when the programme
doing around recognition, as well as what recognition will be launched and the steps needed to get to
scheme providers offer. that stage.

A business case for a recognition scheme should cover

the following:
> Introduction/purpose: Include a short summary of
the purpose of the paper and any driving issues that
need to be addressed, such as those identified by
employee engagement survey results.

> What recognition is: Clarify that recognition is

not the same as incentives. It is about changing
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recognition and engagement and its importance in workforce and HR strategy
organisational success.

> Aims: State the aims of introducing the recognition BOOK A DEMO TODAY
programme. What is the purpose and what should
change if it is successful? State the measures to
be used.

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 Employee recognition: Good practice manual

Designing the In addition to the main objectives of the recognition

scheme, which might include, for example,increased
recognition scheme engagement and better cross-working (see Aims and
objectives), the scheme may be designed to offer other
opportunities. For example, does the organisation want
Types of recognition scheme to be seen as being in touch from top to bottom? If
this is the case, involvement of senior management in
Organisations need to ensure that they build a scheme
the recognition process may help. This could entail, for
that is appropriate for their needs. They should therefore
example, a personal email or letter/certificate indicating
consider the following in relation to their scheme design:
that the employee's behaviour has been recognised
> Why does the organisation want to introduce a at a senior level, or the chance to attend a lunch with
recognition scheme? members of the senior management team.

> Is the organisation ready for a recognition scheme? If In designing their programme it is important for
there is a lot of negativity or cynicism or a lack of trust organisations to consider what other initiatives they
among its employees, other actions may need to be have in place for incentivising and encouraging
taken first to address these issues; they are unlikely to behaviour. They should ensure that there is no
be solved by a recognition programme alone and the conflict or contradiction between programmes or
programme may fail. reward mechanisms in what is being encouraged or
recognised, as this may result in both programmes
> How will the organisation benefit? being undermined.
> What pockets of good practice already exist in the
The characteristics of different types of recognition
organisation and how might these be leveraged?
schemes are set out in the table overleaf.
> How are employees likely to react to the programme,
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recognised and valued for their behaviours and
contribution?

> How can the programme be kept as simple as

possible? Over-engineering the processes is likely to
put people off.
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> How ambitious should the scheme be? A scheme Access resources, data and insights
can develop and grow over time if it is successful, but to help you solve the challenges of
withdrawing or reducing the programme could have an evolving workforce.
a negative impact.

> How can the organisation ensure that the programme

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is affordable, and that there will be are turn on the
investment? Any administration cost should not
outweigh the anticipated benefits to the organisation.

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 Employee recognition: Good practice manual

Characteristics of different types of recognition scheme

Day-to-day Informal Formal

Simple thanks, and possibly

small gifts, to individuals
and teams, primarily from Likely to be a high-profile
Local or divisional, with awards.
Features the manager recognising
May involve nominations.
corporate, division or site-based
behaviours, actions and scheme.
outcomes. These should reflect
business culture and values.

Cost Nil to low. Low. Medium/high.

Likely to be a small local budget Limited budget based on Set budget, normally at
Budget for managers to spend. frequency. corporate level.

Periodic, typically monthly or Often annual award, sometimes

Time frame Frequent and any time.
quarterly. half yearly or quarterly.

Possibly just the thanks: oral, Possibly certificate/letter but

letter, certificate,email or intranet. also higher-value gift. May
Higher-value awards
Award Symbolic item such as cup,low- be able to choose from list or
(value > £100).
value gift such as flowers, bottle acquire through points system
of wine, etc (value < £25). (value < £100).

Presentation at team,department
May be in private, but ideally Awards often made at major
or company-wide meetings.
Ceremony public, for example at a team
May feature in local newsletters,
business event to maximise
meeting. impact and publicity.
intranet and noticeboards, etc.

Commonly formal nominations

Locally managed but within
May be nominations from peers from peers,managers, customers,
simple guidelines and policy.
or other stakeholders. Likely etc. Often escalated from local
Process Possibly some central system
to be assessed locally by small awards. May be multiple awards
to enable gifts to be procured
group. covering different behaviours,
simply and quickly.
and individuals and teams.

May be local publicity to prompt Considerable publicity to

nominations, and set out stimulate nominations and raise
Communications Normally none.
deadlines and behaviours to be profile of programme, desired
recognised. behaviours, etc.

Very little, if any, administration. Coordination of nominations Considerable coordination

Records maybe required for gifts and scheduling of awards and and administration required.
Administration to ensure compliance with tax local events. Records must be Records must be kept for tax
requirements. kept for tax purposes. purposes.

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 Employee recognition: Good practice manual

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