Employee Rewards and Recognition Programs

Subject: Employee Management
Pages: 8
Words: 1982
Reading time:
8 min
Study level: College

It is recognized that an engaged workforce produces better business results than that working with no substantial motivation. As scholars highlight, for an average business owner, it usually costs less to retain an existing employee rather than hire a new one (Kwenin, Muathe, & Nzulwa, 2013). The lack of knowledge, skills, or job experience inevitably leads to additional expenses aimed at eliminating the listed shortcomings. With this being a serious issue, a lot of employers resort to reward and recognition programs to keep their businesses going and to keep their staffs satisfied and motivated. Numerous tools used for performing that task, such as employee nomination, increased compensation, gifts, promotions, and celebrations create a favorable environment for the company’s workers to stay with a firm for a longer period.

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Theory of Recognition

Recognition is defined as a form of employee motivation in which a company identifies and praises employees who have made significant contributions to a company’s market growth. In the majority of cases, recognition is posed as an important form of feedback stimulating a company’s workers to do their job as well as possible. The value of recognition is usually higher for bigger organizations with larger staffs, where the impact of a particular individual is nearly impossible to notice. Both public and private recognition can be very meaningful for employees in this case. However, an opportunity to be recognized in front of colleagues usually means more to everyone involved in a large company’s operation. Thus, company leadership is expected to consider this fact when developing an employee appraisal strategy.

Recognition Programs to Implement

Employee Nomination Program

The fact that companies think more strategically about recognition these days leaves plenty of room for choosing the most suitable option when it comes to developing an efficient appraisal system. An employee nomination program is one of the primary system components that a leadership board needs to focus attention on to raise the morals of their working staff. Unlike incentives that predominantly deal with quantitative outputs, such programs put the spotlight on qualitative results, such as behaviors, attitudes, progressive thinking, and other relevant aspects (Dobre, 2013). It is of great importance that supervisors consider these theoretical concepts prior to choosing a reward method since promotion cannot be based on bare figures and statistical analysis alone. In the vast majority of cases, an individual’s inner qualities, and not some momentary achievement, determine how fast or slow a person’s progress will be in a new position.

As to the volume and complexity of a nomination program, this usually depends on the size of each particular company. A medium-sized firm, for example, can choose the simplest software application to perform the nomination establishment tasks, while a multi-national organization with headquarters across the world can choose multi-layered programs for more efficient performance monitoring. The use of such tools as personal dashboards, real-time social recognition, mobile tracking applications, and bonus calculating instruments can significantly improve employees’ motivation and raise their competitive spirits. Researchers point out that “today’s organizations are operating in a very dynamic and highly competitive environment” (Njanja, Maina, Kibet, & Njagi, 2013, p. 41). Slight competition among company workers only benefits their abilities to adapt to an intense business environment and stimulates faster goal achievement. In its turn, this leads to higher revenues and better recognition of the brand itself.

Increased Compensation

According to the literature, “large organizations allot approximately 1% of base pay for non-sales staff and 4%-7% of base pay for sales staff, which equals an average cost of $100-$400 per employee annually” (Presslee, Vance, & Webb, 2013, p. 1819). Naturally, the figures can be higher when speaking of particular organizations that refer to appraisal models on an occasional basis in order to temporarily raise workers’ motivation. Either a company aims at the permanent use of a method or resorts to a short-lived incentive, the implementation of an increased compensation program will assist in improving performance regardless of a chosen business course. This practice has proven to be effective by the vast majority of organizations throughout the world. It is, therefore, recommended that firms calculate an income average over a set period of operation and estimate which percentage of it can be allocated to bonus programs. Eventually, such a program can only be reasonable if it does not impact the annual revenues.

In order to successfully implement a raised compensation system, an employer needs to work out a performance review schedule to plan a recognition program budget more precisely. Normally, performance appraisals are conducted on an annual focal cycle (Kwenin et al., 2013). On a set date of each year, employees and managers receive a performance review stating the merits of every particular worker based on the company’s financials. For the review to be issued with no delays, it is expected that individual merit increases be planned and allocated before the start of each calendar year. One also expects that increases be totally consistent with an approved merit budget. If all of the above-mentioned conditions are observed, a raised compensation program will provide sustained assistance in matters of promotion and recognition management.

Gifts and Rewards

There is a wide array of methods at employers’ disposal to appeal to when rewarding employees according to the outcomes of a selected recognition program. Thus, an employer can offer a cash reward, grant a day off, recommend a person for promotion, or provide a gift certificate to a local restaurant or a department store. It is suggested that a firm refer to such a model of appraisal on an occasional basis. Establishing cozy relationships with working staff leads to more productive human resources management and deeper involvement of employees in the working process (Dobre, 2013). However, prior to introducing a gift or reward system, a company owner should be aware that cash awards are subject to taxation by the Internal Revenue Service. Therefore, additional funds need to be devoted in order to implement a program successfully.

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Eventually, rewards and gifts systems will not be bound to strict schedules, seasons, or time periods. An employer may praise a successful company worker whenever he or she is inclined to do so. It is important for an employee to be awarded immediately after having made a remarkable contribution to a company’s operation. By using such a method, a supervisor demonstrates his high competence in matters of staff management and his ability to notice achievements and praise then accordingly. As Njanja et al. (2013) point out, the method’s “fundamental purpose is to provide positive consequences for contributions to desired performance” (p. 41). Naturally, this fact stimulates regular employees and senior managers to aim at higher results, for the evidence they receive makes people believe in the decency of their supervisors. Such positive reinforcement not only raises competitive spirits within a firm but also encourages desired behaviors throughout departments.

Promotional Campaigns

By analogy with gifts and rewards, promotional systems are used by employers to praise the most hardworking employees for significant contributions they have made to the company’s market growth or for staying with a company for a long period of time. Decisions regarding promotions are made on the basis of data retrieved from the accounting tools of a used nomination program. As was mentioned earlier, modern software platforms can track the performance of an entire working staff and point out which individuals have reached more remarkable achievements. It is recommended that a person with the highest nomination scores be promoted to a department head’s assistant or some other senior management position that requires experience and leadership skills. Meanwhile, management team representatives who have proven their loyalty can be promoted to be new department heads or take their seats on the board of directors. The most suitable time to announce decisions about promotions is during an annual celebration or an event that has become an integral part of a corporate culture.

Celebrations and Events

Corporate events are supposed to do much more than assembling and informing a company’s staff about plans and recent achievements. For an organization to remain competitive, a management team needs to take all possible measures for employees to wish to stay with a firm. Celebrations are among the means to have that task fulfilled. Normally, companies organize events on the eve of some great national holiday, such as Christmas or New Year’s Day. Eventually, all workers are invited and are thanked for the contributions they have made. As Presslee et al. (2013) highlight in their research, festive occasions of this kind “lead to better performance through their effects on the difficulty of the goals employees selected” (p. 1829). Thus, an opportunity to celebrate an important achievement serves as a major incentive for company workers to set forward more complex goals.

Factors to Consider

Understanding the Problem at Hand

An employee recognition program is not the kind of a strategy to implement out of desperation. Whenever low performance is noted within an organization, a thorough investigation is required. This way an employer can define whether the problem occurs due to insufficient motivation or simply because of the lack of skills. Understanding the roots of an occurring issue helps supervisors to plan response procedures more effectively and to make all necessary staff rotations more precisely. There are cases in which problem elimination is narrowed down to training program implementation, allowing company workers to acquire new skills and expand their knowledge. As Dobre (2013) stresses, “human resources have the capability to create competitive advantage for their organizations” (p. 54). Whether these resources become unveiled or not totally depends on the approach a company takes to resolving an issue.

Considering the Culture

In order to be effective, a recognition program needs to align with the ways participants work, think, and cooperate. Ideally, it is designed to reinforce the values of the organization and develop its own culture. According to Njanja et al. (2013), “the organization should get to know their employees well so that they can employ the right motivational strategy” (p. 47). By making their workers a part of an established culture, top-segment managers expand the existing horizons and create a unique environment for employees to feel minimal stress during working hours. One should keep in mind that for a regular company worker it is of great importance to be treated as a respected and irreplaceable part of a complex “mechanism”. Introducing a corporate culture can assist in having that issue resolved.

Making Continual Refinements

In the age of electronics, most of the available incentive and recognition programs run on software platforms. The fact that performance monitoring is conducted by technology creates opportunities for supervisors to generate a larger amount of data and consider behaviors of hundreds or even thousands of employees at once. However, over time, particular monitoring models tend to become outmoded, requiring an update or substitution with more advanced applications. Thus, questionnaires, surveys, and notifications that have been used a number of times start to evoke less interest and lower motivation among both senior managers and regular employees. If such a tendency remains, the number of workers wishing to leave an organization will start to grow exponentially (Kwenin et al., 2013). For that not to happen, a regular refinement of software content is strongly recommended. Creative usage of motivational tools will stimulate employees’ desire to stay with a company for longer and to make more noticeable contribution to its development.


After reviewing the listed recognition programs and considering the factors influencing the programs’ success rates, one comes to the logical conclusion that putting these methods into practice is important to a company’s well-being and market competitiveness in the long run. Program implementation should be done in easy stages, begining with the most economically efficient models. The practicability of further model integration should be estimated on the basis of the previous models’ effectiveness and the level of employee motivation. If growth in performance is clearly observed, additional motivational measures are not required.

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Dobre, O. I. (2013). Employee motivation and organizational performance. Review of Applied Socio-Economic Research, 5(1), 53-60.

Kwenin, D. O., Muathe, S., & Nzulwa, R. (2013). The influence of employee rewards, human resource policies and job satisfaction on the retention of employees in Vodafone Ghana Limited. European Journal of Business and Management, 5(12), 13-20.

Njanja, L. W., Maina, R. N., Kibet, L. K., & Njagi, K. (2013). Effect of reward on employee performance: A case of Kenya Power and Lighting Company Ltd., Nakuru, Kenya. International Journal of Business and Management, 8(21), 41-49.

Presslee, A., Vance, T. W., & Webb, R. A. (2013). The effects of reward type on employee goal setting, goal commitment, and performance. The Accounting Review, 88(5), 1805-1831.