Program Best Practices

The 3 types of employee recognition and how to use them

Most employees feel underappreciated at work. 

Especially in this time of uncertainty and rapid change, workers are navigating major stressors while feeling undersupported, burnt out, and unacknowledged for their contributions at work. Which makes everything that much more stressful.

This is fuelling staggering levels of employee disengagement and turnover.

Many companies are turning to employee recognition and rewards to try to right the ship. To try to say to their employees: we see you, we value you, we recognize you. But even the best intentions don’t always translate into impactful action.

To truly impact employees, recognition and employee rewards must be cultural, flexible, and personal. It must be intentionally embedded into your organizational processes and norms in a way that both 1) makes employees feel seen and 2) helps you achieve your organizational goals.

But how? Through a three-dimensional or holistic approach to employee recognition.

What’s a holistic approach to employee recognition and why does it matter?

When we say a “holistic approach”, we’re really talking about a three-dimensional or tiered approach to employee recognition:

A pyramid showing the three types of employee recognition: day-to-day, informal, and formal.

  • Formal employee recognition: Centralized or structured recognition, generally managed by your HR or People team (example: Anniversary Awards)
  • Informal employee recognition: Decentralized employee recognition; guidelines exist but recognition is managed at different levels (example: Spot Rewards)
  • Day-to-day employee recognition and appreciation: Widely shared and received by every employee at your company. Informal, easy, and frequent (example: Appreciation Notes)

Each of these tiers plays a unique role in your broader recognition strategy—and all of them are necessary to build a strong culture, retain your employees, and boost employee engagement and motivation.

Let’s take a look at a few hypothetical examples to understand why.

Employee recognition example 1: 

The situation.

A top-performing employee leads a big group project that results in impactful outcomes for the business. While everyone on the team worked hard, it's clear that this person put in a ton of time and effort. At the end of the project, the leadership team treats everyone to a nice lunch but they don’t separately acknowledge this particular employee. 

The problem.

This type of one-size-fits-all approach to recognition can breed resentment. When your employees’ efforts to go above and beyond aren’t recognized, they’re left to wonder why they bothered to work so hard. If this lack of recognition continues, they may eventually disengage or leave for an organization that will acknowledge their input. 

The takeaway.

The level of appreciation or recognition needs to match the employee's level of contribution. 

Employee recognition example 2: 

The situation.

Your sales team looks forward to the coveted President's Club trip every year, which is the only formal recognition program offered at your company. However, the trip is only for the top 1% of sales representatives, which means most of your team—and organization—won't be recognized.

The problem.

Without other opportunities for recognition, the majority of your salesforce will feel underappreciated and likely look for employment elsewhere. The rest of your company—including many people who support your sales process—also feels left out since only the sales team can qualify for President’s Club, breeding toxicity and low morale.

The takeaway.

Only offering one type of recognition program—and limiting it to specific teams—can be detrimental to your company culture.

How to put the 3 types of employee recognition into action. 

When you view employee recognition as a culture-building strategy, you begin to understand how you can use different levers and tactics—appreciation vs. employee rewards vs. incentives and so on—to help you achieve different outcomes, all of which feed into a unified objective: Show employees their contributions matter and create a work environment people don’t want to leave.

Taking a multi-tiered or holistic approach to recognition is how you build a culture of recognition that powers employee experience and drives employee engagement and retention. Let’s take a closer look at each tier, and explore how the pieces fit together.

Day-to-day employee appreciation and recognition.

Think of this as “always-on” employee recognition. Day-to-day employee appreciation and recognition should be accessible, decentralized, and frequent. Your people are doing small things worthy of recognition all the time—things a central leadership team may not always see. That’s why every employee should be empowered to share and receive appreciation at any time. 

It’s particularly important that managers show consistent appreciation to their direct reports because the manager and employee relationship is critical to the employee experience. Managers have visibility into their direct reports’ unique skills and day-to-day contributions and they have the ability to support a person’s career growth, making manager-driven appreciation incredibly impactful. Recognizing employees should not be that hard for direct managers!

Examples of behaviors that might trigger day-to-day appreciation: 

  • Helping a teammate think through a difficult problem
  • Pursuing a lead doggedly and booking a meeting
  • Doing a great job speaking at a company event

Day-to-day employee appreciation could look like:  

Say “thank you.” 

Too often, we underestimate the power of words. A simple phrase like, "I’m really grateful for your help thinking through this problem, ” can make all the difference to your direct reports and teammates—making them feel appreciated, rather than taken for granted.

Pro tip: Be specific in your thanks. Describe the situation, what the person did or the unique strengths they demonstrated, and the impact of their actions through direct verbal praise. (Nonverbal works too!)

Give a public shout-out.

Public recognition or social recognition is a  wonderful way to recognize employees who don’t mind being front-and-center. Use Slack, all-hands meetings, or even social media to share fun shout-outs.

A screenshot of peer-to-peer recognition happening in a public slack channel.

Pro tip: Speak to your people about how they prefer to be recognized for job satisfaction. Some employees will love the attention, but others might feel uncomfortable with public praise. Act accordingly.

Looking for tools that support peer-to-peer recognition? Blueboard can help! Connect with our team to learn more today.

Send a note of gratitude.

If you want to go the extra mile, send a note of appreciation. This simple gesture is personal, impactful, and guaranteed to make someone’s day. Mail your employees a handwritten card or share a thoughtful message using Blueboard’s free Note Builder.

Appreciation begets appreciation. Start by weaving appreciation into recurring touchpoints: Add a “Shout-outs” section to your weekly company all-hands meeting. Have a public #shout-outs Slack or Teams channel. Bring appreciation into your recurring 1:1s and team spaces. Eventually, appreciation will become a habit for your people, fuelling your culture of recognition and boosting employee motivation.

Informal or decentralized employee recognition. 

Beyond day-to-day appreciation, you’ll want to recognize significant employee achievements with a bit more gusto. Which brings us to the next type of recognition: Informal employee recognition. This type of recognition should always have a reward tied to it to incentivize employees to repeat particularly impactful behaviors.

The term “informal” can actually be a little misleading. What we’re really talking about is decentralized employee recognition paired with a reward. Your organization can create criteria to guide why and when to recognize and reward an employee, but informal recognition means that people at different levels in your organization can give out rewards based on their discretion. Timing, reward value, and interpretation of guiding criteria should be fairly flexible.

Examples of behaviors that might trigger informal recognition: 

  • Going outside the scope of your role to help a seller close a significant deal
  • Delivering better results on a quarterly project than originally anticipated
  • Covering for a colleague who is on parental leave

Informal employee recognition could look like:  

Introducing a Spot Recognition program.

Spot recognition rewards specific behaviors, contributions, or milestones when they occur. This type of program is effective because it can be adapted to fit whatever goals your organization prioritizes. Plus, you can recognize employees instantly or at the frequency of your choice. 

At Blueboard, we highly recommend manager-driven spot recognition programs, which empower People leaders to send rewards to employees in the moment—right when a behavior occurs or an employee achieves something. Generally, these programs rely on a set of predetermined criteria shared across your organization that guide when and why a manager should reward an employee. You can structure these programs so that managers have discretionary budget for spot rewards or you can enable a request and approve system. Or, a combination of both. 

Pro tip: You can use spot recognition to promote your company values like our client, GoPro. GoPro’s “Legends Program” empowers managers to request and send rewards to employees for embodying a company value. You can learn more about how GoPro does informal employee recognition, here.

Learn how to design and launch a 3D recognition program with Blueboard.

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Formal employee recognition. 

Formal employee recognition should also be tied to a significant employee achievement or milestone and come with a meaningful reward. Unlike day-to-day appreciation and informal recognition, however, formal employee recognition is centralized, meaning it generally lives within a structured program and is managed by your HR or People team.

Having both centralized and decentralized recognition programs running simultaneously creates enough recognition coverage to ensure every employee has multiple opportunities to be recognized for their contributions. This coverage is key to creating a sustained sense of appreciation for your employees.

Examples of behaviors that might trigger formal recognition:

  • Hitting a significant work anniversary milestone
  • Demonstrating a core company value in a way that drives company culture
  • Revamping an existing process, improving efficiency and profitability

Formal employee recognition could look like:  

Launching a Values Awards program. 

While you can certainly tie your company values to spot rewards, many of our clients also have formal Company Values Awards programs. This type of employee recognition helps recipients feel seen, heard, and appreciated—while also reinforcing the behaviors that align with your organization’s culture. Within a formal Company Values Awards program, rewards are given on a recurring basis (e.g. quarterly or annually) based on a nomination process. This is formal recognition because a central committee—usually your company’s HR and / or leadership team—evaluates the nominations and selects the winners. 

Want to learn more about how to build a Company Values Awards program your employees will love? Blueboard’s VP of Client Experience, Alicia, offers 4 best practices in this blog post.

Celebrating employee anniversaries.

Work anniversaries present the perfect opportunity to recognize your employees' consistent, continuous contributions to your organization. Celebrating years of service signals that you understand and recognize the value of an employee who continues to give their time and skills to your company year after year.

As formal employee recognition goes, anniversary awards are fairly straightforward to design and maintain (especially if you have the right rewards partner and platform). And they can have a major impact on employee retention.

For example, we designed an anniversary awards program with one of our clients, Precision BioSciences, who wanted to retain and attract top talent in the competitive biotechnology industry. The outcome? 100% of their employees agree that the program is a great tool for improving company culture and retention rates.

Hosting an annual President’s Club.

President’s Clubs are a great example of formal recognition based on annual performance. While these clubs are generally geared toward salespeople, some companies open them up to all growth-related departments. The traditional formula for President’s Club whisks tippy-top sales performers (and often their partners) away on an all-paid group trip with company executives.

At Blueboard, we recommend a different approach to President’s Club that allows for maximum personalization and flexibility for your top performers. However you design your President’s Club, keep in mind that if it’s geared toward a specific department, you’ll want to make sure you have other formal recognition programs in place that all employees can participate in.

Drive greater impact with a holistic approach to employee recognition.

Day-to-day appreciation, informal recognition, and formal recognition should all play a role in your overall recognition strategy. But understanding the difference between these tactics—and knowing when to apply these recognition ideas—is vital to creating a strong culture of recognition.

As you think about the different types of employee recognition and how to manage recognition at your organization, consider the following questions:

  • Is there an opportunity for any and every employee to share and receive appreciation?
  • Is there an opportunity for any and every employee to be recognized and rewarded for going above and beyond?
  • Is there an opportunity for any and every employee to be recognized and rewarded for contributing to workplace culture?
  • Is there an opportunity for managers to reward and recognize their direct reports, strengthening the manager-employee relationship?
  • Is there an opportunity for public shout-outs and recognition to remind all employees we have a culture of recognition?
  • Are there structures, processes, and tools that support all of the above to ensure recognition is constant?

It’s only when you treat employee recognition as a foundational People strategy that you’ll unlock its true potential, creating a better work environment for your people and achieving greater business results.

If you want to learn how Blueboard can help you design and roll out a multi-dimensional recognition program, connect with us today.

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