Nicole Faucher, president of Clearway Health, says the specialty pharmaceutical company she heads has been growing rapidly since its founding three years ago, and this year, she wanted to reward exemplary employees who had played key roles in its success. So Faucher invited 15% of the company’s roughly 160 employees to a three-day stay at a resort in the Sonoran Desert outside Tucson, Ariz. Faucher says the secluded spot provided a good atmosphere for relaxing and enabled employees at the fast-paced, fully remote, Boston-based company to spend time together.
“We chose the location very intentionally,” Faucher says. “We picked a place that was a bit remote, more focused on relaxing, re-energizing, and rejuvenating. That was the tone we wanted to set, and this was the right place for us.”
Clearway Health’s executive team selected the trip attendees from a group of employees who had been nominated by their peers based on set criteria, including meeting preset goals and making exceptional contributions to the company, such as overcoming a significant challenge or presenting an idea for a new business opportunity.
Faucher says the money was well spent, based on the employees’ feedback. The trip will help retention, she notes, and having employees discuss the perk outside the company may also help attract talent. Another trip is planned for next year.
Rewards and recognition programs—whether they feature all-
expenses-paid trips to resorts, a public shout-out, or gift cards to an employee’s favorite store—can be effective ways to positively impact employee engagement and company culture—and they don’t have to cost much.
Best PracticesAn effective employee recognition program is an important way to maintain employee morale and foster organizational loyalty. Here are some tips to develop an effective program:
Tie recognition to your organization’s values and goals to reinforce your company’s mission. For example, if service to others is one of your organization’s values, recognize and reward employee support of external charities. —T.A.] Research indicates that employees need a considerable morale boost. A 2024 Gallup report found that employee engagement hit an 11-year low in the first quarter of this year, with only 30% of workers feeling connected to their jobs, compared to 33% at the end of last year. Meanwhile, SHRM’s 2023-2024 State of the Workplace Report found that only 53% of U.S. workers consider their companies to be “a great place to work.” It’s an expensive problem: Gallup says unengaged workers cost their employers $1.9 trillion in lost productivity annually. HR departments are trying to counter that: HR professionals told SHRM they ranked “maintaining employee morale and engagement” as their No. 1 priority this year. |
Building Effective Recognition Programs
“Recognition is something tangible that can add to a company’s culture,” says Isha Vicaria, senior research and people data analyst at Workhuman, a provider of employee recognition products in Framingham, Mass. “Recognition is a form of communication.”
Rewards play a critical role in recognition programs. Over two-thirds of U.S. workers (67%) say work rewards are either important or extremely important in their decision to stay with a company, according to a 2023 survey by Runa, a London-
based digital payment company.
A company’s bottom line stands to benefit, as well. Research by Gallup and Workhuman found that if a company doubled the number of employees who strongly agreed that they received recognition or praise for doing good work over seven days, it would see a 9% increase in productivity. For an organization with 10,000 employees, that productivity gain would amount to a $92 million increase in employee output.
But many workers say that recognition—and the rewards it brings—is in short supply. According to a survey published this year by TalentLMS, an employee training provider based in San Francisco, 28% of workers say they rarely or never receive praise for their work from their managers, and 33% say they are only recognized sometimes. Some of these concerns appear to be generational: While 70% of employees over age 54 report feeling recognized at work, only 49% of employees under age 24 say they feel appreciated.
It’s not very expensive or difficult for employers to enhance their recognition and rewards programs, says Christina Gialleli, director of people operations at Epignosis, the parent company of TalentLMS. She says employers should embed their recognition programs in their regular operations, rather than reserving praise for workers during reviews or holidays. “A public shout-out on a job well done goes a long way,” Gialleli says.
Gialleli also suggests using recognition or rewards platforms to publicize employees’ accomplishments both internally and on social media. Such software can track employees who receive accolades and monitor managers’ recognition of their direct reports. Workplace experts say the latter part is important because some supervisors may be more inclined to issue praise than their colleagues, while others may have higher thresholds for what warrants special recognition.
“It’s important to train the managers,” Gialleli says. “Recognition needs to be data-driven and very specific. Recognizing someone should be a tool to help others do better.”
A budget for rewards is also helpful, though it doesn’t need to be extravagant, she says. Cash bonuses and more paid time off are employees’ preferred rewards, according to the TalentLMS survey.
Peer-to-Peer Recognition
An annual bonus is a common way companies show their appreciation for a job well done. But many employers also enable their employees to recognize and reward one another, often adding an element of fun.
The Variable
The Variable, a Winston-Salem, N.C.-based ad agency, has an annual bonus program based on its economic performance and employees’ contributions. The company also gives each of its 60 employees $1,000 annually to use to recognize their colleagues. Jodi Heelan, The Variable’s president and partner, says the $60,000 is well spent. “I believe that there are things that happen in the day-to-day that a leadership team isn’t going to see,” she says. “There are good things happening throughout the company, and we wanted employees to have the ability to showcase them.”
Employees email the finance and employee experience departments to explain why they want to reward a colleague and how much they would like to give them. The executive team doesn’t weigh in on the decision, Heelan says. Instead, the bestower is encouraged to enclose the cash in a card for the recipient and describe what the co-worker did to earn a reward.
“People really appreciate the money in their pocket,” Heelan says. “We also wanted to build moments for peers to come together and recognize each other and say, ‘Hey, thank you,’ or ‘Hey, I appreciate you.’ ”
Heelan strongly encourages other organizations to adopt peer-to-peer recognition because it fosters a strong sense of community among employees. In fact, she says she would end the company’s annual bonus program before axing peer-to-peer recognition. She adds that the company hasn’t seen any problems with employees only recognizing their friends or always highlighting the actions of a specific person. “We have feedback and data from employee surveys that tell us that it’s the most coveted [recognition] program that we offer,” Heelan says. “People really appreciate the opportunity to give money to their peers.”
Clio
Clio, a legal software company based in Burnaby, British Columbia, also has multiple award programs, and not all of them carry a financial benefit. Marina Harris, the company’s chief people officer, says that earlier this year, Clio started a peer-to-peer rewards program housed on an internal platform that enables colleagues to recognize one another. The shout-outs allot points to recognized employees that can be redeemed for different gift cards. “We want to create the muscle where we are all providing each other a level of reward and recognition,” she says. “Folks are motivated by something like a gift card.”
Every year, Clio also presents plaques to employees who embody one of its eight guiding values, which include fostering an inclusive and diverse environment and aiding colleagues. Employees can nominate one another, and a group of volunteers and management selects the winners, who are announced at a multiday company event and are invited to attend an exclusive dinner—although there is no financial award.
“They are living our values,” says Harris of the awardees. “I don’t know if that needs a monetary attachment. I think it is more intrinsically motivating. I don’t know that you need to attach something monetary for every award—it becomes kind of transactional.”
There are things that happen in the day-to-day that a leadership team isn’t going to see … and we wanted employees to have the ability to showcase them. - Jodi Heelan
XINNIX
XINNIX, a professional training and coaching provider based in Alpharetta, Ga., has several recognition programs, some of which offer tangible rewards and others that offer no additional compensation. The fully remote company has a quarterly award program that recognizes employees who embody two of its values: education and service.
Employees record the number of hours they have spent learning something and contributing to the community. Their chances of having their name picked out of a hat for the award increase with the number of hours they have dedicated to education and community involvement. Winners spin a wheel and receive the prize they land on. The prizes—chosen by XINNIX’s employees—include gift cards, spa days, and dinners.
Casey Cunningham, CEO and founder of XINNIX, says some employees prefer monetary rewards, while others prefer days off. Offering a variety of options chosen at random adds an element of fun to the reward, Cunningham explains. She adds that the program connects employees to the company’s core values and culture, and it particularly resonates with younger employees, who especially value working for organizations that embrace volunteering, education, and development.
XINNIX also presents an annual award to a worker who it feels best exemplifies the organization’s spirit. All employees vote to select the winner. “Getting peer recognition is powerful,” Cunningham says.
The annual award comes with no monetary prize. “You don’t have to have recognitions attached to money every time,” she says. “I believe that it’s sometimes even more powerful when they get that public recognition of a significant moment.”
Collaboration Is Essential
Employee input on how to structure recognition programs signals to employees that their company recognizes and values their feedback on how they’d like to be rewarded. Harris says Clio conducts employee engagement surveys twice a year that ask for ideas to keep the company’s rewards and recognition programs fresh and relevant. She says these programs are essential because employers can’t just assume their workers feel valued.
Cunningham agrees. “Without a formal recognition program, you’re leaving that to chance,” she says.
Such programs can also be an important employer differentiator, Harris says. Rewards and recognition programs are especially a priority at Clio because the company has a presence in the competitive labor market of Toronto.
These programs are also a prime opportunity to reinforce a company’s values and priorities. “We want to make sure we’re rewarding and recognizing the right behaviors that are culturally aligned, that are driving the highest levels of impact for the company,” Harris says. “It’s not just what you produce, but [also] how you work with each other, [that’s] going to get recognized and rewarded.”
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