Virtual HR Department

Reward and Recognition

Other VHRD Sections

In order to attract, retain and motivate a talented work force that produces results, organizations must create an environment where employees feel that their contributions are recognized and appreciated by their employer. Regardless of employment conditions in your city or town, simply paying employees a decent wage is not enough to secure the effort and commitment level that you should be seeking. 
Recognition is a form of validation and positive reinforcement of performance, actions and behaviours for employees. When good performance and desired behaviours are not acknowledged, employees have no indication that what they are doing is correct or good, other than not being told they are doing something wrong. Positive reinforcement of desired behaviour is as important as addressing poor performance and errors. 
Rewards and recognition can be as simple as saying 'thank you,' 'well done' or 'good job.' Recognizing outstanding performance in front of an employee's peers is also a very effective tool to recognize the employee and motivate others to strive for similar recognition. 
Formal recognition of outstanding performance should be included in performance appraisals and can be acknowledged through compensation programs (i.e., merit increases, annual bonus, etc.), training and development opportunities, and so on. Similar to the tracking and documenting of poor performance outlined in the Managing Performance section of this website, positive elements of performance should also be noted to ensure their inclusion in the performance-appraisal process.
Forms of recognition and rewards are virtually endless and vary from organization to organization. Some businesses use formal reward programs with significant cash value, such as large cash bonuses, trips and other expensive items. Not all rewards need to be formal or extravagant. As identified above, saying 'thank you' does not cost anything except a few seconds of time. 

Informal Rewards

An informal reward appears spontaneous and is often viewed by employees as being more of a personal statement from their manager than receiving something through a formal awards program. In addition to saying 'thank you,' other informal rewards can include:

It is important that, when providing this type of recognition, the employee's co-workers are not put down or criticized. The focus must remain on why and how the employee has been outstanding and worthy of recognition, not that 'the rest of you should be more like Diane.'
Formal Rewards 

Formal recognition of outstanding performance should be included in performance appraisals and can be acknowledged through compensation programs (i.e., merit increases, annual bonus, etc.), training and development opportunities, promotions, and so on. There are also many areas where structured programs can be implemented to provide reward and encourage specific actions and behaviours.
Formal reward programs can include:

The type of rewards available for any of these programs is essentially limitless. In addition to cash or additional vacation time, items can range from company logo'd merchandise like hats, sweaters and jackets to virtually any other merchandise and beyond into travel and other life-experience-based rewards. There is an increasing trend to provide rewards that are of perceived value to the employee, as opposed to more traditional items such desktop pen sets and other items that often end up buried in a drawer or at the back of a cabinet. Merchandise items and experiences that promote work/life balance, health and time with family are of increasing popularity. Items such as camping, hiking and other sports-and-leisure equipment for the employee or their family (e.g., kids bikes, roller blades, etc.) have become highly appreciated items. The reward offering for any program can be created to suit any taste and budget.

When employees are happy with their company, they will work that much harder to contribute to company success. An engaged and enthusiastic workforce leads to increased employee retention, productivity and quality, resulting in higher client/customer satisfaction, which hopefully translates into increased sales and profitability.

The pages of this section contain many program ideas and samples. Each program template is available for download in the right-hand box on the relevant page.