Employee Recognition: Elements Of An Effective Program

Employee Recognition 1

Running head: EMPLOYEE RECOGNITION

Employee Recognition: Elements of an Effective Program

Jeff Burkhardt

University of Houston-Victoria

MGT6351

Spring 2005

April 20, 2005


Abstract

As the marketplace becomes increasingly competitive, and companies search for new

ways to become more efficient, employee recognition has emerged as one such way that

companies can affect productivity. When implemented properly, the end result of an employee

recognition program is increased productivity through better moral, enhanced motivational tools,

and improved retention. However, while most organizations identify with having an active

employee recognition program, few are truly successful. This qualitative study will examine the

elements of an effective employee recognition program, and its implications will be discussed.


Employee Recognition: Elements of an Effective Program

Executives and managers at companies and organizations of all sizes must realize that

employee recognition serves as a low-cost, high-impact means of improving moral, and

furthermore, understand how to implement an effective employee recognition program. The

reason being that as the marketplace becomes increasingly competitive, and companies search

for new ways to become more efficient, employee recognition has emerged as one such way that

companies can affect productivity. “So many companies have similar products and offer similar

opportunities. When it comes down to it, your people are the true links to making anything

happen” (Young, 2004, p. 22). Given that research consistently shows that employees feel

appreciated when recognized by management for their contributions, which leads to positive and

enthusiastic support of every aspect of the organization, employee recognition programs make

logical sense (Reynierse, 1994). The underlying assumption in this approach, though, is that

employees, like all individuals, need some acknowledgement of their accomplishments

(Appelbaum & Kamal, 2000). Therefore, when implemented properly, the end result of an

employee recognition program is increased productivity through better moral, enhanced

motivational tools, and improved retention.

The key to such results, nevertheless, depends on the effectiveness of said employee

recognition program. In an October 2002 survey by the National Association for Employee

Recognition and WorldatWork, 84 percent of responding companies indicated that they have an

active employee recognition program (sited in MacMillian, 2003). However, in a similar survey,

only 52 percent of employees questioned reported that their company’s employee recognition

program was good, very good, or excellent (Saunderson, 2004). Essentially half of all

respondents felt the employee recognition strategy wasn’t working. Therefore, in order for an


employee recognition program to be effective, it must first address the issues of and include

institutional elements, administrative elements, and operational elements. This paper will attempt

to provide a better understanding of these individual elements and how they indeed come

together to form an effective employee recognition program.

Institutional Elements

Before jumping into the constructing an employee recognition program, planners must

first evaluate the environment within which it will operate, or in other words, develop the

institutional elements. Effective employee recognition occurs in organizations with a strong,

supportive culture. While a majority of organizations claim to have vision and mission

statements, there is doubt as to how well they are known. Far fewer organizations have a written

set of values, which support leadership behaviors like giving employees recognition

(Saunderson, 2004). Therefore, “The starting place for building an organization and paying

attention to the work force is clarifying the firm’s core values and developing a focused mission”

(Reynierse, 1994, p. 44). In essence, before employees, managers, and executives are willing to

accept a program that celebrates success, an organization that celebrates success must first be in

place.

After the organizational culture has been established, planners must focus more

specifically on company goals. This begins by considering the primary objectives of the

organization. Thus, what do you hope to achieve through acknowledgement of staff

accomplishments (Messmer, 2004)? Ultimately, the employee recognition program should be

linked to company and departmental goals. Without the proper aim of the employee recognition

program, the targets of the organization will never be hit.

Administrative Elements


Once the foundation for an effective employee recognition program has been conceived,

the organization must next allocate administrative elements to further foster the efforts of an

effective employee recognition program. From the outset, it is incumbent upon management to

immerse itself in the process, so as to legitimize employee recognition through its involvement.

Very few elements shape the culture of an organization better than examples from leaders at the

top. Historically, though, the managerial task of employee recognition has been difficult:

Few managers consistently receive recognition themselves, which makes it hard to know

expectations or how to give it. Managers are given few supports in the way of education,

communication and encouragement on employee recognition. At the same time, there is

no accountability placed on managers for giving proper and effective employee

recognition. (Saunderson, 2004, p. 255)

Giving personal praise is a learned skill. It’s not something that comes naturally for everyone,

since it requires people to connect on a personal level (Davidson, 1999). As a result, managers

require training and educational resources to become more effective recognition givers. To start

with, most organizations leave room for improvement with regard to internal communication.

Working on better face-to-face, written, and electronic communication goes a long way to

enhancing employee recognition programs. By also cultivating an attitude of genuine caring and

support, managers can further reinforce the intentions of the employee recognition program,

which is to say, increase productivity through better moral, enhanced motivational tools, and

improved retention. Additionally, greater accountability for giving verbal, written, and tangible

forms of recognition to employees also needs to be incorporated into employment contracts and

performance reviews (Saunderson, 2004). Compensation and benefits should be based on

compliance toward and performance of the employee recognition program. Without


management’s total integration into the program, employees will simply dismiss recognition as

nothing more than a short-term gimmick.

A second necessary administrative element is the availability of discretionary funds—or

simply stated, budget. A reoccurring problem across many organizations is a lack of funding for

employee recognition. Companies rarely include a budgeted line for such programs. However,

Franklin (1997) makes the point that, “Instead of a cost, employees should be considered an

asset—in need of attention and value enhancement.” The reality is that recognition does not need

to expensive in order to achieve departmental or corporate goals (Messmer, 2004). In fact, in a

study of more than 1,500 employees by Dr. Gerald Graham, professor of management at Wichita

State University, found that three of the top five incentives utilized in employee recognition

programs, as ranked by employees, had little or no cost (Nelson, 2002). Nonetheless, some

amount of budget will be necessary. Conversely, an employee recognition program without

suitable administrative support will simply die on the vine, rendering it ineffective. Therefore, it

is critical that management be involved from the outset, and be allowed to maintain some level

of budget.

Operational Elements

With the institutional and administrative elements firmly in place, planners may proceed

with the operational elements of the employee recognition program, having to do with

implementation and execution. First of all, we must identify the two basic forms of recognition—

formal and informal. Most organizations focus on giving awards and formal recognition, such as

service and various types of performance awards and incentives (Saunderson, 2004). This form

of recognition can be very effective at promoting goals such as those related to safety and sales,

but is often expected by employees as a minimum level of recognition. Recently, as companies


have struggled with retention and general productivity issues, they have discovered that

employee motivation is highly individualized. As a result, the trend has been to add informal

recognitions systems that are also highly individualized as a compliment to formal programs

(Wallsten, 1998). Furthermore, informal recognition programs have shown to improve overall

company morale. However, informal recognition must consist of more than a plaque on a wall or

a trophy in a case:

Successful employee-recognition plans offer tangible rewards that are sufficiently

enticing to make people imagine receiving and enjoying the award. Leaders who

recognize the power of such emotional appeal can more easily motivate people to their

highest performance levels, often for much lower costs than simple monetary rewards.

(Petrini & Thomas, 1995, p. 9)

With this in mind, it is justified that formal recognition still serve as the basis for any employee

recognition program, but informal recognition must also be included for it to be completely

effective.

Second of all, careful consideration should be given to the recognition criteria, giving rise

to three basic characteristics. First, the criteria for employee recognition should be selective.

Recognizable goals should be attainable through hard work and dedication, but not so difficult

that they seem impossible. However, employees should not be rewarded for simply completing

their basic job requirements. Recognition should only be given when it is truly merited. “Look

for people who are really demonstrating that they want to make a difference. Rewards are

meaningless if people think you are distributing them for no real reason,” says Kim Kasin, Vice

President of Employee Participation at Dreyfus Retirement Services (as cited in How to design,

2001). In the end, preserve the value employee recognition by issuing it selectively.


Next, the criteria for employee recognition should be specific. While many elements are

involved in an effective employee recognition program, the priority of specificity is highlighted

in the following:

Recognition is most memorable and best boosts self-esteem when it reflects a higher-

order characteristic. Adding a universal attitude such as leadership, integrity, trust-

worthiness or actively caring to the praise enhances the recognition. However, the key is

to state the specific behavior…it reflects. (Geller, 1997, p. 42)

Therefore, program planners should identify specific actions or goals that warrant recognition in

advance, ensuring that the criteria are as measurable as possible. For that reason, when providing

recognition it should be directly associated with the desired behavior. The recipient should know

what was done to earn praise. That employee will in turn be motivated to continue the behavior

(Geller, 1997). “When you are specific, it allows the employees to repeat the behavior, and it

allows others to hear what the company is valuing” (Young, 2004, p. 22). What’s more,

employee recognition programs can be carried out at the supervisory or the organizational level.

However, in either case, recognition must be carried out in such a way that it rewards employee

achievements that are indicative of commitment to the company and reinforce department or

organizational objectives (Applebaum & Kamal, 2000). Additionally, when praise is general as

opposed to specific, it tends to be received as insincere (Nelson, 2003). The importance of

sincerity will be discussed later in greater detail. Once again, make employee recognition

specific so that it is received as genuine and serves to promote desired behavior.

Finally, the criteria for employee recognition should be consistent. Any individual or

team that displays the desired actions or achieves the established goals should be rewarded. If the


accomplishments of some are acknowledged but not others, employees will quickly lose faith in

the program (Messmer, 2004). It could also be said that consistency leads to credibility:

One of the essential factors in building a relationship where trust exists is to be

consistent. Such a quality increases the credibility of a leader and the trust is implicit in

any actions done or words said. So words of praise are believed and not questioned.

(Saunderson, 2004, p. 24)

In any case, employee recognition must strive to be consistent with its praise. Anything less

would undermine the entire program.

At this point, we now know to whom recognition is given and why it is given. By

analyzing recognition presentation, we will address how and when recognition is given.

According to a survey of International Public Management Association for Human Resources

(IPMA-HR) members, nearly three-quarters of the respondents indicated that a “well-planned

presentation” was an important factor in recognition programs (as cited in Saunderson, 2004).

One element of a “well-planned presentation” is delivering recognition in the appropriate forum.

While there is some debate over this particular element, it ultimately depends on the type of

recognition and the recipient. Some point out that quality recognition is personal, and thus

relevant to only one person, therefore, it should bed delivered in person (Geller, 1997). To that

point, Geller (1997) notes, “…it is not necessarily rewarding to be held up as an exemplar in

front of one’s peers. Managers need to realize that some employees feel embarrassed when

identified in a group setting.” On the contrary though, many employees want you to make a fuss

over them, and therefore, prefer recognition to be public (Davidson, 1999). As for team

recognition, a group setting is more than appropriate. By distributing individual responsibility

across the team, the risk of individual embarrassment is minimized (Geller, 1997). Therefore, be


mindful of the type of recognition and the recipient when selecting a forum to present employee

recognition.

Timely delivery of recognition stands as yet another operational element of an effective

employee recognition program. For best results, praise should be rendered as soon as possible

following the achievement. By waiting too long to acknowledge the employee, the gesture loses

its significance. Employees may then infer that other things in the organization take priority over

recognizing the value of their contributions (Nelson, 2003). Looking closer at the timeliness

factor, 94 percent rank it as very or extremely important (Saunderson, 2004). As Saunderson

(2004) often says in seminars, “The sooner you give recognition, the shinier the star.” If praise

must be delayed, the action or achievement should be “relived”. This involves talking

specifically about the event that garnered recognition and having the recipient describe the

situation (Saunderson, 2004). Connecting the commendation to the recipient also makes the

recognition personal. The importance of personal recognition will be discussed later in greater

detail. Again, make every effort to deliver employee recognition in a timely manner.

The key to recognition presentation, however, is that it remains positive. Positive

reinforcement is proven to effective at changing behavior. For that reason, it is important not to

let “but” slip into employee recognition. Some people prefer a “sandwich method” to maximize

the opportunity of interpersonal communication. Say something nice, followed by corrective

criticism, and finished with something nice again (Geller, 1997). Although this may seem ideal,

it is not corroborated by research. In fact, such a mixed message can cause confusion. The

impact of the initial recognition is canceled by the subsequent correction. Thus, the key is to

keep recognition simple and direct, and allow time for the praise to soak in (Geller, 1997). By


maintaining a positive tone, employee recognition works to build morale rather than deconstruct

it.

Finally, recognition awards themselves must be evaluated when assembling the

operational elements of an effective employee recognition program. First, recognition awards are

most meaningful when they are perceived as personal—especially informal recognition awards.

Survey respondents showed 60 percent of employees felt that receiving awards that reflect their

lifestyle was extremely or very important (Saunderson, 2004). Therefore, recognition should not

be general appreciation that would apply to any employee in any situation, but rather individual

appreciation that applies to a particular recipient. Second, recognition needs to be sincere. In fact

awards don’t always have to be extravagant. You can give something small or grand, but it’s the

sincerity of the reward that matters most (Young, 2004). Some of the most effective recognition

awards are as simple as a written note, a day off, or even just a verbal “thank you”. Employees

who receive genuine and sincere recognition for their contributions to an organization are likely

to perform at higher levels than those employees who don’t.

Conclusions and Limitations

In conclusion, as organizations look to strengthen their competitive edge, they must not

lose sight of their most important natural resource—employees. With that in mind, employee

recognition serves as a legitimate method of increasing productivity throughout a company.

However, to be effective, the program must include institutional elements, administrative

elements, and operational elements. It also requires dedication:

Creating a culture that embraces the power of personal recognition may take time, effort

and a lot of reinforcement. And although you might be facing an uphill battle, the

rewards will more than pay off over time. Getting employees to “Wow” is about fostering


the human connection, encouraging others to put a personal touch on their recognition

efforts, and modeling the right behavior in your own day to day activities. (Davidson,

1999, p. 47)

In short, executives and managers at companies and organizations of all sizes must realize that

employee recognition serves as a low-cost, high-impact means of improving moral, and

furthermore, understand how to implement an effective employee recognition program.


References

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Financial Incentives in Small Business. Journal of Management Development, 19, 733-

763.

Davidson, L. (1999, July). The power of personal recognition. Workforce, 78, 44-47.

Franklin, H. (1997). Keeping the Best: Employee Retention in the ‘90s. Journal of Property

Management, 62, 20-24.

Geller, S. E. (1997). Behavior-based recognition

How to design low-cost, high-impact recognition programs. (2001, December 1). Leadership for

the Front Lines, 7.

MacMillian, C. (2003). Paying off. Promo, 5, 67-70.

Messmer, M. (2004). Creating an Effective Recognition Program. Strategic Finance, 85, 13-14.

Nelson, B. (2003, March). Employee recognition is a powerful tool to cultivate excellence.

Health Care Registration: The Newsletter for Health Care Registration Professionals,

12, 7-8.

Nelson, B. (2002, September). No-cost employee recognition. Bank Marketing, 34, 14-15.

Petrini, C., Thomas, R. (1995, November). The Right Stuff. Training & Development, 49, 9-10.

Reynierse, J. H. (1994). Ten Commandments for CEOs Seeking Organizational Change.

Business Horizons, 37, 40-45.

Saunderson, R. (2004). Survey Findings of the Effectiveness of Employee Recognition in the

Public Sector. Public Personnel Management, 33, 255-275.

Wallsten, K. (1998, November). Targeted rewards have greater value—and bigger impact.

Workforce, 77, 66-70.


Young, D. (2004, April). Making it count. Potentials, 37, 22.

Employee Recognition: Elements Of An Effective Program

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