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Compensation & Rewards

Rewards and Recognition: Differences, Ideas, and Tips

Leapsome Team
Rewards and Recognition: Differences, Ideas, and Tips
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Today’s teams are more wonderfully diverse than ever — and becoming even more so. Demographic data predicts major workforce increases for older team members, women, and nonwhite employees over the next decade. (1) Ways of working are also changing, with remote and hybrid models becoming the new normal for many companies. 

That means finding new ways of motivating diverse employees with personalized rewards and recognition initiatives. In fact, at companies where recognition programs are based on principles of Diversity, Equality, Inclusion, and Belonging (DEIB), 3x as many employees reported being highly engaged. (2)  

As DEIB expert Alysha Campbell puts it: “In today’s work economy, a one-size-fits-all approach for benefits and total rewards no longer works. We are living in a workforce that can house 5 generations under one roof — that’s a lot of different expectations and needs to be mindful of.” (3)

In this article, we’ll help you understand what a holistic approach to rewards and recognition looks like — and give you tips and ideas to build a program that’s as diverse and dynamic as your team itself.

  1. US Bureau of Labor Statistics, 2023 
  2. Achievers, 2021
  3. LinkedIn Pulse, 2020
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Rewards vs recognition: What’s the difference?

Both rewards and recognition are important ways of celebrating successes, boosting morale, and providing employee appreciation. However, there are crucial differences between them. 

Employee rewards explained

Rewards are usually tangible incentives and perks. Many companies offer bonuses, raises, or rewards or recognition payments for meeting goals, achieving great results, or hitting milestones. Stock options are another form of financial reward.

However, meaningful rewards aren’t always monetary incentives: they can include things like extra vacation time, more flexible work schedules, and personalized gifts.

Rewards are extrinsic forms of motivation: they provide concrete benefits that encourage employees to keep striving and stay at the company long enough to hit specific milestones. 

The right mix of different reward types can help meet employees’ needs for financial security and social esteem. Offering tangible rewards is especially important for recruitment and retention.

Employee recognition explained

Recognition is about acknowledging and showing appreciation for employees’ efforts, behaviors, and progress.

That might mean shoutouts at meetings, appreciative comments from managers, or thank you notes.

You’ll want to recognize employees not only for hitting targets or reaching milestones but also for embodying company values or developing key skills. 

Recognition satisfies intrinsic needs for appreciation, belonging, and purpose. 

Research by Deloitte shows that employee engagement, productivity, and performance can be 14% higher for companies that implement a recognition program than for those that don’t. 

Combining rewards and recognition

A table comparing recognition and rewards, outlining the differences between the two in the top two columns, and showing how they work together in the bottom row.

The best approach is thoughtfully bringing together both reward and recognition strategies. 

Here’s how they complement each other: 

  • Rewards motivate achievement, while recognition reinforces progress, not just end results. 
  • Rewards have a financial cost — while recognition doesn’t require significant resources. 
  • Rewards provide individual incentives while recognition can contribute to a sense of team culture.
  • Rewards are generally standardized, while recognition can be done in many different ways to suit individual employees’ communication styles. 

Combining recognition/rewards for employees creates a holistic culture of appreciation. 

“We use a mix of rewards and recognition. For example, our top-performing business executive gets to decide the menu of the food that we order every two weeks, as all the staff get together to recognize and appreciate each other. This way, the executive gets the recognition, and the staff gets their biweekly treats.” 

— Radhika Gupta, founder and HR head of One Digital Land

Ideas for rewards and recognition in the workplace

So what do effective rewards and recognition for employees look like? 

Use the following ideas to inspire you in motivating your team. But remember, for maximum impact, you’ll need to personalize them based on your team members’ diverse needs and preferences, as well as your company resources. 

Rewards ideas

  • Monetary incentives — These could include spot bonuses, profit sharing bonuses, annual performance bonuses, salary raises, and opportunities to invest in company shares.
  • Non-monetary reward options — Try balancing out your monetary incentive programs options like extra days off, flexible scheduling, free local experiences or trips,  time off for volunteering.
  • Learning and development opportunities — Professional development workshops, training, and mentorship schemes can be an important form of employee rewards and recognition. These initiatives help motivate your employees and show them you’re invested in their long-term career. You could also provide tuition and learning stipends for courses outside the company to support continuous education. 
  • Personalized gifts — These could come in the form of company “swag” like planners, tote bags, or laptop cases with employee names. Personalized gifts are also great ways to commemorate a special occasion for an employee — like a gift basket for someone who’s going to welcome a child into their family, adopt a pet, marry, or move to a new city.
  • Creative awards This is a fun and cost-effective way to reward employees, especially if you have a regular employee appreciation event. They can be as formal or casual as you want, as long as they reflect your core values. Some ideas for awards are “The Creative Problem Solver,” “Team Player of the Year,” and “Excellence in Communication.” 
  • Special team events — Appreciating employees as a team is just as important as doing so individually. Trivia nights, trips to escape rooms, cooking classes, or tickets to sporting events are a few ways to reward teams for their effort.
Photo of employees at a work event, three of them bringing their drink glasses together in celebration

Acknowledging employee achievements is fundamental to a healthy work culture

Recognition ideas

Leapsome’s praise wall lets teams publicly recognize each other, reinforcing the importance of every individual’s contributions and achievements 
  • Virtual praise wall — This is a popular and flexible way to recognize employees for specific achievements. You can ask team members to write notes to each other that can be as specific as: “Thanks to Amelia for stepping up to help me with that new client.” Or, they can speak to how certain individuals display company values, for example: “Tim is always open to learning more from colleagues, and he has a great growth mindset.” 
  • Birthday celebrations — This can be as simple as asking your team to sign a birthday card for a colleague or as creative as having team members decorate an employee’s desk with encouraging notes. 
  • Feature employees on social media Whether you do this in a structured way, with a monthly “Employee Spotlight” or by mentioning staff contributions in a post, social recognition on LinkedIn or Twitter can mean a lot to your people and boost their professional reputation.
  • Donate to a charity of their choice, in their name — This is a unique, thoughtful, and highly personal way to recognize employees and throw in a bit of philanthropy, too. 

As well as having a structured, consistent system for employee recognition, creating a culture of spontaneous and ongoing feedback is also crucial for people-first companies. 

It can be helpful to provide dedicated training for managers and leadership around creating a culture of praise and recognition within the team. It’s also a good idea to empower reports to tell team leaders they’d appreciate more feedback in leadership performance reviews

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Pro tip: Don’t forget remote employees’ rewards and recognition

Physical distance can sometimes result in remote employees feeling disconnected or overlooked. But companies can bridge gaps with thoughtful gestures tailored to distance workers’ needs.

As well as the usual rewards, you could give remote workers extra vouchers for remote office setup or coworking spaces. You can also send gift cards and care packages.

It’s extra important to recognize your remote employees publicly in meetings, newsletters, and Slack channels to highlight their contributions.

4 tips to build a great employee rewards and recognition program

Creating an impactful, equitable rewards and recognition program for employees takes thought and care.

Use these four tips as a guide on how to give your employees recognition and appreciation that makes a difference.  

1. Use employee-led reward and recognition strategies

If you already know how to create a feedback culture within your company, then you likely have a few reliable channels for gathering input from your people, such as:

  • Asking for input in team meetings where you can benefit from collaborative brainstorming.

  • Gathering individual feedback in 1:1 meetings and asking employees to get specific about what kinds of recognition and rewards matter to them. Some people may prefer more open recognition during team meetings, while others prefer private praise. It shouldn’t be either/or — a healthy mixture of both kinds of feedback serves most organizations best.

Use these channels to actively involve employees in shaping rewards and recognition programs that resonate with their preferences and needs.

Keep gathering feedback as you go. The most effective executives and managers know that asking for feedback as a leader is as important as giving it. 

For example, after you’ve experimented with a system for recognition, employees may suggest that they prefer to nominate peers anonymously rather than have managers select them; or they may opt for a setup where different employees get to pick a candidate for recognition every month. 

The idea is to let employees come up with creative ideas that have traction and get more participation month after month.

Photo of two employees, one smiling at the other, sitting at a table and holding papers

No recognition and rewards program is truly effective without employee feedback

2. Set clear expectations 

Make it clear to your employees how often and via what channels you’ll recognize high-achievers. 

For rewards, employees need to know exactly what the criteria are and how often rewards will be distributed. Will every staff member who hits their targets or receives a top score on their performance review receive a bonus? How do you determine how much every employee gets from your profit-sharing program? Anticipating these questions ahead of time will help to build mutual confidence in the process

Be as specific as possible about the criteria, such as:

  • Reaching specific objectives and targets. For example, hitting a sales quota or recruiting a predetermined number of employees. These may change based on your company’s needs from quarter to quarter, and you should tailor your criteria to help you meet those needs.
  • Showing that they understand their core responsibilities both individually and as a part of a team. Be sure to provide these in detail for employees to review regularly.
  • Consistently embodying organizational values and encouraging others to do the same.
“Speak to your employees to determine what constitutes going above and beyond. Often what management thinks is ‘above and beyond’ will vary wildly from what employees want to be recognized and rewarded for.”

— Dragos Badea, CEO of Yarooms

3. Make recognition multi-directional

Recognition should come from the top-down, bottom-up, and peer-to-peer.

A Gallup survey found that the praise employees find most memorable comes from their manager (28%), closely followed by recognition from a high-level leader (24%), then customers (10%), and peers (9%).

Gallup notes that: “Employees will remember personal feedback from the CEO — even a small amount of time a high-ranking leader takes to show appreciation can yield a positive impression on an employee. In fact, acknowledgment from a CEO could become a career highlight.”

Asking senior leadership to participate in rewards and recognition programs — and shout out employee efforts informally — can have a major impact. 

Regular recognition from managers is also crucial. In fact, our recent Leapsome Workforce Trends report found that three out of every four employees generally crave more constructive feedback and recognition from their managers. 

Peer recognition builds camaraderie and connections between colleagues. You can give your team members the opportunity to celebrate coworkers by letting them submit nominations for monthly recognition or setting up a channel in your company group chat or intranet to share appreciation. Using Leapsome’s tools for continuous feedback and praise and integrations with Slack and Microsoft Teams can streamline the process, making continuous peer recognition quick and easy.

4. Be genuine

Authenticity is key for recognition and rewards to truly resonate. Adapt your approach based on individual preferences: Introverts may appreciate a personal note, for example, while extroverts might thrive on public praise or social media shoutouts. 

Make sure you include specific details about the recipient’s contributions. A generic “Good job!” often rings hollow. Instead, make sure your reward or recognition action shows you’ve noticed the person’s unique talents and hard work. 

The Harvard Business Review suggests using a technique called “reflective recognition” to bring employees into the conversation and discover what they’d genuinely like to be praised for. 

With reflective recognition, managers invite individual employees to reflect and share what they’re proud of achieving and why. 

It’s a win-win: “Reflective recognition gives the leader a window into what matters most to another person while at the same time, helping employees get present to their own progress and accomplishments.”

Make recognition and rewards a habit with Leapsome

Leapsome’s integrated tools help you motivate employees within a system of feedback, recognition, and incentives

Building a culture of appreciation isn’t just good for your company’s reputation and bottom line — it also helps remind executives, managers, and individual contributors alike that there’s a crucial human element to keeping your business thriving.

A great employee recognition reward program makes each team member feel continuously valued.

Leapsome provides all the tools you need to seamlessly build recognition and reward into your company culture and processes. 

Use the Surveys module to run pulse and engagement surveys to gather employee perspectives on how they’d like to be rewarded and recognized. You can also use surveys to monitor the impact of your R&R initiatives. Integrated AI sentiment analysis makes it easy to summarize key themes and insights.

Leapsome’s Instant Feedback and praise wall can help make shoutouts second nature in your company. 

Finally, our Compensation module lets you seamlessly integrate rewards with performance and company goals and centralize your compensation planning. 

Leapsome’s comprehensive people management solutions support your reward and recognition strategies so you can motivate and engage your employees from month to month and year to year.

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FAQs about rewards and recognition

What is an employee reward & recognition program?

Employee reward and recognition programs are strategic tools designed to celebrate employee achievements and reward your people with monetary and non-monetary incentives for meeting goals or embodying core values. 

An employee reward and recognition program goes hand-in-hand with compensation management, as they’re both part of a company’s strategy to attract, motivate, reward, and retain talented employees. 

And if your HR or people ops team is looking for a platform that can help you streamline your compensation planning — and, along with it, your recognition and rewards — you should learn more about Leapsome’s new compensation management tool.

What are the types of employee rewards?

There are many types of employee rewards you can choose from, depending on your team needs and preferences as well as company resources. Common rewards include:

  • Monetary rewards, like bonuses, equity, and raises
  • Non-monetary rewards, like flexible hours, extra days off, and access to fringe benefits and perks
  • Personalized gifts, like putting together a gift package for an employee that just welcomed a child into their family
  • Special experiences, like trips or tickets to local events
  • Creative awards for employees who perform well, live your values, and overcome challenges

What are the benefits of employee recognition?

Employee recognition is crucial for creating and maintaining a happy, engaged professional team. Companies that take the time to engage their employees also tend to have higher productivity, profitability, and lower turnover. 

Employee recognition also has the benefit of increasing employee awareness and appreciation of company goals and values, and it can help boost a team’s sense of purpose. And it’s not just top-down — recognition is also about team members encouraging colleagues.

What is a good example of an employee recognition program?

Here are some examples of regular employee recognition programs you can try — but experimenting with several is the best way to see what works best for your people:

  • Celebrating employee birthdays to foster a sense of belonging
  • Creating a virtual praise wall to celebrate employee achievements
  • Encouraging peer-to-peer appreciation, where individual employees recognize each other for accomplishments and contributions
  • Featuring employee shoutouts on social media spotlighting a specific employee every month
  • Organizing team appreciation events like work outings or celebratory dinners

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Leapsome Team

Written by the team at Leapsome — the all-in-one people enablement platform for driving employee engagement, performance, and learning.
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