The Evolution of Employee Recognition and Rewards: Trends and Best Practices

BY Gail Gonzales | July 07, 2023

In 1907, the Ford Motor Company had a 700% attrition rate on its assembly line. Henry Ford decided to reward people who stayed for one, two, and five years, creating the first employee recognition format. Over 120 years later, this is what most companies are still doing today. Longevity isn’t an accurate or productive measurement of true employee engagement. In fact, “94% of organizations have employee recognition and rewards programs, yet only one-third of those are effective,” according to Merrily McGugan the vice president of brand and communications at WorkTango.

What does it mean to have an effective rewards and recognition program? We all work harder when we know we’re appreciated, morale is also better and people tend to stay longer. “Companies that excel at employee recognition are 12x more likely to generate strong business results than their peers who are not doing it,” said McGugan during her thought leadership spotlight session at From Day One’s Austin conference in June. What are some best practices companies can easily implement? McGugan offers these seven ideas.

Create a Culture of Recognition–Not a Single Event

Have you ever worked tirelessly for years just to receive a plaque and a round of applause? It can feel like way too little too late. People don’t work in years, it’s more like sprints based on project completion. Creating a culture of recognition means publicly appreciating work well done as it’s happening. “Always on recognition” as McGugan calls it rewards employees for amplifying company values and behaviors and emphasizes peer-to-peer recognition.

Decouple Recognition and Rewards

While recognition and rewards are more powerful together, in today’s hybrid and remote work world people need connection. Recognition can also mean allowing people to share a few fun moments, do some icebreakers, and check in to address any challenges.

Enable Recognition Into the Flow of Work

Recognizing someone via company wide email can feel outdated. Using Teams, Zoom, Slack, or any tool you use daily that integrates right into the systems employees are already using is much more effective, interactive, and valuable. Everyone can see it, comment, high-five and celebrate that person motivating others to do their best work in hopes they’ll be the next one cheered on.

Give Real Rewards on The Employees' Timeline

A points-based system with a platform where employees can pick out what they really want can be incredibly rewarding. An online catalog offers lots of choices on demand. McGugan shared how one employee renovated their bathroom with redeemed points while another saved up points to go visit their brother. When employees earn points for meeting tough deadlines, completing training, peer recognition, and more, it’s not just motivating. The productivity also helps support the organization financially. “It's really difficult to keep track of all the different years of service programs, ad hoc rewards, perks, and gift cards. Consolidating an annual budget into a slew of points, bringing all the programs together, and divvying them up among employees once a quarter has saved companies 20 to 30% on their rewards budget,” said McGugan.

Active Leadership and Participation

Recognition and rewards programs are meant for building culture, engaging folks, and building connections between the whole organization. If your executives don't participate, your program won’t succeed. What gets recognized gets repeated. When executives recognize an employee who's gone above and beyond, other employees will follow in their footsteps. Conversely, “When managers were not engaged in the platform, and they didn't log in and give recognitions, 91% of their direct reports were inactive or very rarely active. The managers set the tone.”

Publicize and Amplify Recognitions

For employees in warehouses or manufacturing plants who aren't working from desks or conventional office spaces, you can install screens with employee recognition to publicize their contributions. Executives, managers, and peers can also give praise and appreciation to their teams for work well done and spur more positivity.

Create a Holistic Rewards Strategy

A holistic rewards strategy means that recognition is given for exemplifying values, key behaviors, and reaching milestones. It also means that rewards are meaningful, offer choice, and are on-demand. And that incentives are provided for key areas the business wants to work on like improving customer service ratings or reducing sick days. “One of our customers got 70% of employees in the first couple of days, and ultimately 99% of employees to complete very long trainings in two weeks,” by offering points as an incentive, said McGugan.

Remember that recognition creates connection and it’s mostly about being seen, heard, and appreciated. While letting employees choose their own gifts may seem impersonal, earning points to pick out what they really want is not only motivational, it may make a tough work week a whole lot better.

Editor's note: From Day One thanks our partner, WorkTango, for sponsoring this thought leadership spotlight. 

Gail Gonzales is a writer, brand strategist, and designer based in Austin, Texas. Her boutique agency, Evolve Your Brand, helps business owners who care about the positive evolution of people or the planet amplify their message.


RELATED STORIES

HR’s Influence on Revenue: Navigating the New Employer-Employee Relationship

Successful organizations that consistently exceed revenue goals thrive by aligning with employee expectations .A thriving company nurtures the employee journey, focusing on various aspects of well-being and engagement to support personal and professional growth.This puts HR leaders at the forefront of helping employers and employees form an evolved relationship where their respective professional goals are more compassionately and collaboratively achieved.During a thought leadership spotlight at From Day One’s Austin conference R.W. Holleman, head of enterprise sales at Rain, a company offering earned wage access programs to employers, spoke on how a holistically symbiotic relationship between employee and employer is crucial to achieving higher revenue goals.Cultivating Authentic Value“We all know the cost of turnover. The impact of disengaged employees and the ripple effect that has on the bottom line, right?” Holleman asked the audience. He elaborated on how companies failing to address the root of modern-day disengagement see a cultural decline that further leads to a decline in revenue.Employees are no longer satisfied with just a paycheck and guaranteed work hours. They seek meaningful support, recognition of their value, and a sense of purpose in their work. Consequently, HR executives confront the limits of traditional talent management. The conventional view that employees are satisfied with consistent financial compensation and set work hours alone is outdated.“You’re not just managing people. You’re shaping your HR and you’re shaping the future of the business,” Holleman said. “If you don’t help with that, the business might not survive, right?”What can employers provide of authentic value? Holleman cited security, flexibility, and belonging as vital to maintaining employee engagement, productivity, and satisfaction. Data from McKinsey & Company confirms this. Companies resolving significant drivers of disengagement, including an unsafe environment and a lack of career advancement and workplace flexibility, can annually save up to $56 million.R.W. Holleman, head of enterprise sales at Rain, led the thought leadership spotlightResolving several major drivers of disengagement supports retention, reduces absenteeism, and boosts productivity. Companies then experience an increase in revenue.A Positive and Supportive CultureThe same study by McKinsey & Company showed that employee disengagement exhibited by workers with lower well-being can cost a median-size company between $228-355 million a year in lost productivity. In 5 years, that adds up to about $1.1 billion in lost value.It underscores how HR executives now occupy a unique position. They can be more influential to companies achieving sustainable financial success through leveraging comprehensive benefits and programs that support employee well-being. Going beyond the scope of traditional HR work is to pioneer the cultivation of positive and supportive modern-day workplace environments conducive to success for employers and employees.One way to foster a positive culture is to consider more inclusive benefits that better support employees’ overall well-being. Inclusive benefits empower workers, contribute significant value to their lives inside and outside the workplace, and help them thrive.For example, Rain gives employees instant access to 50% of their earned wages, providing financial flexibility. This benefit eases the stress of immediate financial burden, helping employees focus more on their careers. The program is also a win for employers because of its simple process: companies who access Rain’s program complete an EWA adjustment file and withhold the accessed wages from employees’ checks.“What makes that powerful? What I’m talking about is not technology or automation, right? It’s about meeting the human need for stability and security,” he said. By authentically addressing employees’ concerns and providing relevant solutions, employees feel more valued, optimistic, engaged, and committed to performing at their best.Other benefits like inclusive healthcare coverage, care benefits, wellness programs, skill development, work projects, and continuing education improve employee well-being and strengthen positive connections between employers and employees. “By recognizing the importance of the human element and giving employees the support they need, you’re not only driving engagement, you’re driving revenue,” he said.Editor’s note: From Day One thanks our partner, Rain, for sponsoring this thought leadership spotlight.Stephanie Reed is a freelance news, marketing, and content writer. Much of her work features small business owners throughout diverse industries. She is passionate about promoting small, ethical, and eco-conscious businesses

Stephanie Reed | November 26, 2024

Bridging the Gap: Evolving Benefits to Support Women’s Health Milestones

Women’s healthcare has made progress, yet it remains outdated and frequently falls short, even in the 21st century–a consequence of longstanding bias. In 1977, the FDA banned women of childbearing age from phase 1 and 2 clinical trials, “unless they had a life-threatening condition.” Then in 1993, “Congress passed a law requiring the inclusion of women in clinical research.”“How did we get here? Well, you know women aren't small men. You might have heard that, but the FDA did not agree with that. The FDA in 1977 banned women from being part of research. So anything that applies to a man research-wise, applies to a woman as well. [In] 1993 we’re finally invited back in, which is great. However, we still have work to be done. We’re very behind,” said Kerri DiCicco, vice president of business development at Progyny where she partners with consultants and employers to provide end-to-end family- building solutions.DiCicco spoke on the topic of women's healthcare at a From Day One’s Denver Conference in a thought leadership spotlight about “Bridging the Gap: Evolving Benefits to Support Women’s Health Milestones.” She specifically touched on fertility, pregnancy, postpartum, and menopause, and how to make it more tailored to women's experiences.The Impact of Health GapsDiCicco says access to providers who specialize in women's healthcare isn’t easy. “Everyone has probably heard that women live longer than men, right? But it's true, we do live longer than men. But the flip side of that is that we spend 25% more of our lifetime in debilitating health. And one of the things that happens is it takes us a lot longer to be diagnosed with illnesses,” said DiCicco.Yet, even though women are back in the picture, outside of oncology, only 1% of research dollars go towards women’s health research. Furthermore, DiCicco says it took another 14 to 16 years for infertility to be recognized as a disease. “And infertility, even when it's male factor-infertility, the woman is the one that's going to bear the treatment for that.”DiCicco points to the fact that we’re starting families later in life and that “one in six people are going to need help conceiving.” “Because of the lack of research we come to childbearing years with chronic conditions. So it takes, on average, 10 years for a woman to get a diagnosis of PCOS (polycystic ovary syndrome) or endometriosis, which when it goes untreated, really impacts your ability to conceive without assistance.”The struggle to have a child, DiCicco says, is often more stressful than a death in the family, “but less than 7% of women are able to get support.” There needs to be a full episode of care to cover what is needed, and it needs to happen at the right time.DiCicco gives the story of Jessica and Ashley, a same-sex couple, who want to start a family. “It’s a hard journey to start, and if you're in a same sex relationship, there’s additional nuances.”In this scenario, Jessica’s employer offers equitable fertility benefits, so they’re assigned a patient care advocate (PCA). This advocate acts as their guide, helping them find appropriate clinics, offering emotional support, helping them understand their options, and scheduling appointments.The benefits of targeted, proactive care extend beyond health: Data shows that 80% of employees who receive fertility benefits stay loyal to their employer, seeing the support as invaluable. “And you think about that also through the lens of DEI–it’s a very connected journey, and we took the gaps out.”With pregnancy and postpartum care, DiCicco says the U.S. is not doing its job to take care of women, and that the maternal death rate has risen.Proactive Postpartum CareBroadly speaking, DiCicco says we know postpartum is deadly, but it's still up to women to seek out that help. “And that's really hard, because at that point she's just trying to keep a seven pound human alive.” Instead, DiCicco says that proactive, early care is better.In another example, Katie, a new mom in her 30s who went through fertility treatment, is struggling with postpartum anxiety while caring for her baby alone at home. Her employer's program connects her with a PCA who knows her background and stays involved after the birth. This advocate, along with a pregnancy coach, checks in on Katie, helping her understand that her struggles are common. “As she gets closer to [returning] to work. Her patient care advocate helps her with that, so she has the ability to go back on a schedule that really works for her, works for her family and takes the stressors out of it.”Navigating the Symptoms of MenopauseThe final issue DiCicco covered was menopause, which she says gets misdiagnosed all the time. “If you have an employee that comes into your office and says, ‘My heart won’t stop racing.’ You’re going to tell her to go to the ER. The cardiologist is going to see her and say, ‘I don't know what it is. Let's refer you here, here, and here,’ not even thinking that you’re 37 years old, and this is perimenopause.”There are 34 symptoms related to menopause and according to DiCicco nearly 47% of women go through 15 different providers before they get a correct diagnosis. Most women are told to go see their OB-GYN, who are primarily trained to “have a healthy mom and a healthy birth. Less than 7% of the OB-GYNs in this country get any training at all in menopause.”DiCicco's final example is Nicole, a 42-year-old working mom and executive, who is struggling with classic menopause symptoms. She first goes to her primary care physician, who doesn’t recognize the symptoms as perimenopause-related. “Why would she ever think about menopause or perimenopause?” Luckily, Nicole’s employer provides a comprehensive health benefit that covers menopause care. This proactive care not only eases symptoms but also saves women from multiple office visits, keeping them focused and productive at work. By offering targeted proactive support, employers can avoid unnecessary claims and help retain valued employees who might otherwise be affected by unmanaged symptoms. “And when we close the gaps in menopause with the right care, with the right specialist, that's what's going to happen.”Closing the gaps in women's healthcare is key, and highly beneficial to employers. “Really think about ‘what gaps do I have, and how can I close those?’ Because when you close the gaps we just touched on, you're going to see that financially, it’s going to make sense.  Don’t put the onus on women to navigate a system that wasn’t created by or for women. We need to choose equitable coverage, coverage for everyone. And make sure it's intentionally designed for the specific concerns of women.”Editor’s note: From Day One thanks our partner, Progyny, for sponsoring this thought leadership spotlight. Matthew Koehler is a freelance journalist and licensed real estate agent based in Washington, DC. His work has appeared in Greater Greater Washington, The Washington Post, The Southwester, and Walking Cinema, among others.

Matthew Koehler | November 25, 2024

Want to Retain Your Workers? Show You Genuinely Care About Their Mental Health

When employers make a sincere effort to support the well-being of their workers, does that investment have a positive return for the company? Does it go beyond goodwill to improved corporate performance? Nivati, an employee mental-health platform, decided to find out.In a study of 25,741 workers at 56 companies that used the Nivati platform during 2023-24, the company found a dramatic impact among employees who were fully engaged with the platform: a high level of employee retention. The overall turnover rate within this group of employees was only 1.7%, meaning they were eight times more likely to stay in their jobs than co-workers who were only casually engaged with the program.Retention is a key number for employers because unwanted turnover can be so expensive. According to Gallup research, “replacing leaders and managers costs around 200% of their salary, replacing employees in technical roles costs 80% of their salary, and replacing frontline workers costs 40% of their salary, excluding unmeasured losses in morale and knowledge.”Yet reducing employee turnover is not merely about cutting costs; it’s strategic investment in an organization’s future. By embracing programs that enhance engagement, satisfaction, and overall workplace culture, employers can cultivate a loyal and motivated workforce. The benefits—ranging from improved productivity to enhanced customer satisfaction—far outweigh the costs.The American workforce’s state of mental health is often described as a crisis. How does that present itself on the job? “Employees often approach Nivati struggling with mental health challenges like stress, burnout, anxiety, relationship challenges, and work-life balance issues, which are major contributors to workplace dissatisfaction,” said Nivati CEO Amelia Wilcox, who founded the company in 2020. “When companies don’t provide mental health support, employees are more likely to leave due to feeling unsupported or unable to cope with their work environment.”In the nearly five years since the start of the pandemic, many factors inside and outside the workplace have aggravated employee stress. “The shift to remote and hybrid work, combined with economic uncertainty and social isolation, has significantly affected employee wellness,” said Wilcox.Amelia Wilcox, CEO and founder of Nivati (Company photo)While many companies have stepped up their support for good mental health, there’s still a significant gap. “Many employees are still unaware of these benefits and underutilize them. This commonly stems from lack of communication and engagement strategies that remind employees and make employees feel like the resource is readily accessible and OK for them to use,” Wilcox said.Cultural challenges are a factor too, especially when a company talks a good game about mental health but fails to make it a core value. “For instance, if a company is saying they value mental health and then covertly sends the message that taking time off is not OK, the employees internalize those covert messages over the overt messaging the employer is trying to send,” said Wilcox. “Effective onboarding, consistent conversations on mental health, periodic reminders, and visible support from leadership increase utilization, making employees more aware that their employer genuinely cares about their well-being.”Karen Fikse, senior director of HR at Cummins, the engine manufacturer, said in a From Day One panel discussion that the idea of leaders practicing what they preach formed the basis of her company's “It’s Okay” campaign, which provides managers with resources to process whatever they’re going through–be it anxiety, stress, pressure or hardship.In the five years since its Nivati’s inception, said Wilcox, “we’ve learned that the key to impactful mental health support is a holistic approach, including therapy, fitness, finance, and self-care tools, all made accessible within a flexible platform that meets employees where they are. We’ve also learned that some people aren’t comfortable with jumping right into therapy. So our platform was designed to allow people to start in an area that’s less ‘scary’ for them and build trust with the platform and team. They can take baby steps to grow into therapy.”Before any therapy or other steps happen, the pathway needs to be a welcoming one. Nivati’s platform “provides an intuitive experience for employees to seek help: from signing in and selecting self-guided resources around mental health, nutrition, or finance—to scheduling and engaging with qualified professionals in each of those areas of well-being. The entire process is designed to be simple and confidential,” Wilcox said.Nivati partners with a network of hundreds of licensed therapists, registered dietitians, life coaches, financial advisors, meditation practitioners, yoga instructors, personal trainers, and more. These providers work 1:1 with employees, they facilitate group training and education for Nivati’s customers, and they create the content for the self-guided resources on the company’s platform.Even for workers who aren’t at risk of quitting their jobs, in many cases because they need the financial security, paying attention to their mental health can lead to thriving on the job rather than every day being a struggle. They can reframe their work experience and boost their resiliency. Nivati’s platform has a career development and coaching category to help workers grow in their roles as well. “Even if these employees aren’t leaving,” Wilcox said, “providing them with support can increase their satisfaction and productivity, ultimately benefiting both them and their employer.”Editor’s note: From Day One thanks our partner Nivati, who sponsored this spotlight.(Featured photo by SDI Productions/iStock by Getty Images)

the Editors | November 20, 2024