Why You Need an Employee Reward and Recognition Program That Works

Written by
John Quinn
John Quinn

You pay your employees well. Your benefits package is competitive. Maybe you even have a recognition program like Employee of the Month, or annual bonuses.

Still, your company is likely less competitive and ultimately less successful than it could be.

Here’s why: study after study shows that meaningful employee recognition leads to increased productivity, better employee retention, and greater overall success.

In Denmark, a survey of 1,000 employees found that “the second biggest driver of [employee] dissatisfaction was a lack of praise and recognition.”

In Australia & New Zealand, a survey of 3,000 employees found that their number one desire was more on-the-job praise. Desire number two? “Better managers.”

Worldwide, a comprehensive analysis of 10,000 businesses by Tom Rath and Donald O. Clifton showed that workers who “receive regular recognition and praise” are more engaged, more productive, more customer-oriented, and are more likely to stay with their company.

In short, a workplace that recognizes and rewards excellence is more likely to get excellent work from its employees, and to attract & retain more excellent workers.

What is meaningful recognition?

We’ve all had the experience of receiving praise that didn’t really feel like praise at all. Maybe it was given way too late, maybe it was insincere, maybe it wasn’t even related to the work we did. In many cases, bad praise is worse than none at all. Don’t fall into that trap when building your employee recognition program.

Criteria for effective praise & recognition is:

  • Specific - Calling out a specific action or deliverable for praise is the best way to show that you are paying attention to what your colleagues are doing. “You’re doing a great job” is so vague it is practically meaningless.
  • Timely - The best time to recognize a job well done is now. Recognition should be given within 48 hours, if possible.
  • Nontrivial - A hardworking professional doesn’t show up everyday and stay at the office late to be recognized for his or her looks or ping-pong prowess. We want to be recognized for the skills we bring to the workplace and the value we provide to the organization.
  • Public - The rule of thumb is “praise in public and reprimand in private”. Praise that publicly names an employee enhances the effect on the recipient, as well as raising morale in general. It signals that this is a workplace where excellence is recognized and rewarded.
  • Tied to rewards - Effective recognition is often tied to something of real value - money, movie tickets, gift certificates, etc. It is a great way to demonstrate that that there is real meaning behind your words of praise.

Rolling out a template Employee of the Month program isn’t a great idea: it does not provide meaningful recognition — it is not specific or timely and is often given out for trivial reasons instead of being performance-based. While annual bonuses are appreciated, they are not timely, specific, or public.

Recognition programs need not be manager-driven. In many cases, peer recognition is much more meaningful. With Bonusly, you can design a meaningful peer-to-peer employee recognition program in just minutes. Click here to sample what Bonusly has to offer.

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Originally published on January 12, 2014 → Last updated August 24, 2019

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John Quinn

John is a Co-Founder of Bonusly, where he lends his broad experience in all aspects of developing and running large scale, world class, high availability web infrastructures. He's dedicated to providing delightful product experiences, and making work better for everyone.


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