Creating a Recognition-Based Culture

Loyal employees are those who feel rewarded for work well done. Here are some ways to do just that.
May 17, 2012

I have mixed feelings when I walk into a small business and see an “Employee of the Week” sign. On the one hand, I want to commend the owners for recognizing their stellar employees. But on the other, I’m hoping that the culture of appreciation goes a little deeper.

The one-on-one nature of many small businesses provides an excellent opportunity to build a culture in which employees are consistently and thoughtfully recognized. If done correctly, they’ll be more likely to outstay and outperform their counterparts in similar organizations. Creating such an environment, however, requires a multi-pronged approach that touches many components of the employee experience.

Exploring Types of Recognition

Although not all employees may aspire to management, strong recognition-based cultures offer highly motivated workers a clear path to greater responsibility. More so than anything else, a promotion is beneficial in demonstrating to the worker that the business understands and appreciates her contributions.

In terms of financial compensation, strive to bring employee pay up to industry standards and eliminate internal disparities. Depending on your set-up, you can also use long-term incentives such as year-end bonuses, 401K matching schedules, additional vacation days and stock purchase programs. Financial rewards should be tied to future payout schedules.

Employees also like to know they have the option to try a different type of job without leaving the organization, so make sure your top performers are aware of the options that exist within the business. You can also provide additional challenges by appointing a superstar employee to a special committee or giving him access to unique training and development opportunities.

As part of a larger strategy, small “spot” rewards such as gift certificates or meals out are useful. If an individual successfully finishes a project, put an announcement on the Intranet site or in the e-newsletter, and plan an impromptu celebration. Additionally, build in opportunities to acknowledge each team member by noting the dates of your employees’ birthdays and work anniversaries and taking time out of the business day to observe them.

Learning from the Best

According to APQC’s Collaborative Benchmarking study Rewarding, Engaging, and Retaining Key Talent, best practice organizations deliver recognition that’s tailored for their cultures, give managers the flexibility and budget to award employees as necessary, and allow peer-to-peer awards to be given with little or no approval from supervisors.

A critical point, says the National Federation of Independent Businesses, is to understand what your individual employees care about. For instance, Kim Hahn, CEO of Intellectual Capital Productions, allows one talented staff member to attend a “Mommy and Me” class once a week because spending this time with her child is important to that employee.

Dodging the Pitfalls

When it comes to infusing your culture with recognition, it would seem that any effort is better than none at all. But’s Derek Irvine points out a few mistakes to avoid.

Don’t limit the winner’s circle to a few. Recognition is only strategic when it conveys your most important objectives and values to all employees in a meaningful way, and therefore all workers should feel like active participants.

Don’t leave recognition to chance. Labeling a few employees as lucky winners of an arbitrary drawing communicates an inconsistent message.

Don’t turn to recognition as a last-ditch effort. Trying to use recognition as a replacement for deserved compensation, especially in bad times, will not create the desired positive culture.

What innovative reward and recognition programs have you implemented in your culture?

Alexandra Levit is a former nationally syndicated business and workplace columnist for The Wall Street Journal and the author of Blind Spots: The 10 Business Myths You Can’t Afford to Believe on Your New Path to SuccessMoney Magazine’s Online Career Expert of the Year, she regularly speaks at organizations and conferences on issues facing modern employees.

Illustration by Russell Christian