5 Steps to Creating a Winning Employee Recognition Strategy 

Imagine the following scenario.

You have two groups of people who have not been physically active in a long time. Each group is given the same challenge -- get in better shape for the next 90-days.

Both groups are given full access to a sporting facility. They have all the equipment and tools they need to attain the goal of “getting fit.”

But here’s the catch...

Group 1 is given a complete program. They receive clear directions on how often to exercise, for how long, which exercises to do, and how to properly use the equipment. In short, they have a clear roadmap. 

Group 2 is not so lucky. They are not given any directions. All they are told is the end goal -- how they proceed is entirely up to them.

Which group do you believe will achieve greater success at "getting fit" after 90 days?

Most people would unanimously agree that group 1 -- the people with a clear program -- is more likely to succeed. We all know this intuitively; direction is crucial, especially when faced with an unfamiliar task. 

Why You Need an Employee Recognition Strategy

Likewise, if you work in human resources, you know this reality all too well. 

Asking managers to “give more recognition” or “improve their communication” won’t produce the results you want. 

These requests are far too ambiguous. There are no clear deliverables. And simply asking someone to do something is not a strategy.

Managers will still have many questions, such as:

• Why is this important? What is the goal?

• What are some reasons for giving recognition?

• What should I say?

In short, they might have some of the tools to give recognition. But without clear directions, there won’t be results. 

This is where a recognition strategy comes in. What are the benefits of an employee recognition strategy? Beyond providing clarity, a well-designed employee recognition program improves several business outcomes. 

Effective recognition increases employee engagement. 

Gallup, a leader in employee engagement research, consistently finds that effective recognition increases employee engagement. For example, workers who receive frequent and valuable feedback from the people they work with are five times as likely to be engaged, 57% less likely to suffer from burnout and 48% less likely to look for another job. 

This is good for performance. Highly engaged teams drive 23% greater profitability and 18% higher productivity compared to disengaged ones.  

Employee recognition lowers turnover. 

Employee recognition also reduces the costs associated with turnover. According to SHRM (Society for Human Resource Management), employees with a positive experience are 68% less likely to quit their jobs. Similarly, Deloitte reveals that companies with effective recognition programs have 31% lower voluntary turnover rates and are 12 times more likely to have better business outcomes. 

Recognizing employees boosts morale. 

The impact of recognition on employee morale is just as profound. Receiving meaningful positive feedback about your work feels good. It makes you proud of your work. It motivates you to go above and beyond. 

According to Harvard Business Review, employees who receive great positive recognition from their boss are 40% more engaged than others. And a FlexJobs survey showed that a staggering 86% of workers say being recognized is a major driver of motivation.

Employee recognition strengthens culture. 

Recognition also helps reinforce core company values and organizational alignment. Employees who receive authentic recognition are four times as likely to feel connected to company culture compared with those who don’t, according to Gallup. This connection strengthens team dynamics and fosters a sense of purpose at work – two elements of a strong culture. 

Recognition comes with customer-facing payoffs. 

Employee recognition is good for your brand and customers too. Highly engaged teams outperform others by 147% in earnings per share, according to Gallup. It makes sense: Engaged employees often feel more seen and appreciated. They are more likely to provide excellent customer service as a result. 

In short, a recognition strategy isn’t a luxury. It’s a research-backed necessity. Ready to create yours? You need a plan with clear steps to succeed.

Key Components of An Employee Recognition Strategy 

Once you understand the why, the next step is figuring out the how. Whether you’re starting from scratch or optimizing an existing employee recognition program, here are a few essential elements to integrate. 

Alignment with Company Values

Employee recognition shouldn’t exist in a vacuum. Tie it to your company values for best results. For example, if collaboration is one of your core values, acknowledge team members who take the initiative to support others. This way, you celebrate more than performance. You reinforce key culture pillars. 

Timeliness

Delayed recognition misses the mark. Recognize employees in real-time – or as close to the moment as possible. It makes the impact of your feedback much greater. It also reinforces the behavior you want to see. 

Specificity

Effective employee recognition is specific and personalized. Instead of sharing a vague compliment, point out what the employee did and why it mattered. Think: “Thanks for staying late to troubleshoot the client issue. It helped us avoid a delay, and the client was grateful.” Stay away from generic statements like “thanks for your help” and “great work.” 

Inclusivity

Your employee recognition strategy should make everyone feel valued. It’s easy to acknowledge top performers and extroverts. But you need to create recognition opportunities for all employees. Otherwise, your efforts can backfire. Encourage peer-to-peer recognition. Celebrate milestones like work anniversaries. Create an environment where appreciation happens daily – not occasionally and just for a few. 

How to Create an Employee Recognition Strategy 

That said, many businesses try to launch recognition programs but forget to question whether their recognition strategy is right for their unique goals. Do their efforts align with employee needs? Do they address pressing HR issues? 

Rewards and recognition are a critical part of an employee engagement strategy. Building an intentional plan to integrate them is critical. 

It transforms the daunting goal of growing employee appreciation into clear, concrete actions that anyone can carry out. Yes, even the most unresponsive managers can do it! Here are five steps to create an effective employee recognition strategy. 

Step 1: Understand the Different Types of Recognition & Reward Programs

Think about only getting words of appreciation from your significant other on your birthday. Of course, you would appreciate it, but you would also feel neglected the other 364 days of the year. 

This brief story illustrates an important point: Different types of recognition fulfill different needs. Of course, we want a big blowout party on a special day like a birthday. But we also need smaller, more continuous forms of appreciation in our everyday lives.

Bringing this idea back to work, there are two main types of employee recognition. Generally speaking, all recognition program initiatives fall into one of two categories: 

• Structured

• Unstructured 

Common characteristics of structured recognition:

• Formal + Expected: Structured recognition is expected and usually more formal. It gives employees a sense of security and something to look forward to. 

• Organizationally driven: Usually given on behalf of the organization, so it's less personalized. Employees are praised for high-level achievements. 

• Tangible compensation: Usually given with tangible gifts, awards, raises, or promotions.

• Drives long-term motivation: Structured recognition is an excellent tool for making employees feel appreciated on a long-term basis.

Common characteristics of unstructured recognition:

• Flexible + Spontaneous: This type of praise is timely and more casual. Employees don't have to wait for a formal event to get praise. 

• From manager: Usually given by a manager, so recognition is more personalized. Employees are praised for their specific accomplishments and soft skills. 

• Verbal praise: Recognition is given with verbal praise but can also be accompanied by small gifts or rewards like a paid social event.

• Drives short-term motivation: Consistent gratitude helps boost daily morale and motivates employees.

We like to think of "structured" and "unstructured" recognition as two points on a spectrum rather than two fixed categories. Here are examples of programs that fall under each category.

When employees claim they don't feel valued or appreciated, it can mean many things. Perhaps they want to be recognized by their organization with a bonus, higher salary, or a new title. However, their dissatisfaction may also reflect a desire to receive more verbal recognition for their manager, to be recognized for specific achievements.

So after seeing this framework, it's easy to understand why just having one type of recognition program may not be enough to fulfill all of the employees' needs.

Not to mention that research shows a strong correlation between employee satisfaction and frequency of recognition. In short, to maximize engagement, recognition should be offered at least once per month.

To that end, to grow greater appreciation at work, a mix of both structured and unstructured recognition needs to be present to fulfill different organizational goals.

I know what you're thinking...this sounds like a lot of work. Of course, these programs don't all need to be launched at once! 

Starting with one program is a step in the right direction. Small, consistent efforts will compound and lead to you reaching your greater objectives of growing appreciation in the workplace.

Now, let's go on to the next step, auditing any current  initiatives you currently have in place. 

Step 2: Audit Your Current Recognition & Reward Strategies

This step can be fast and simple if you are a small business just getting started with recognition. Either way, it will be made much simpler by using the framework from above.

For each section, think of any programs or initiatives (even if they are informal) that support recognition and appreciation. 

You may want to create a different framework for each department, as certain types of recognition like "performance awards" or "bonuses" may apply to some departments and not others.

Speak to managers

All of these initiatives are meant to benefit your employees. The goal is to help employees feel more fulfilled and valued. As such, managers can be valuable resources to help understand where your company is falling short. For example, when speaking with managers, you might discover that employees aren't happy with a current nomination program. Maybe they would prefer a different type of recognition program, one that is more inclusive. This leads us to the next question.

Speak to employees

Before launching any new initiative or program, we recommend speaking directly to your employees or testing out a program on a small group. A great employee recognition program brings value to employees. It’s essential to know if they will benefit from a new program before getting started. 

And, as mentioned before, when employees claim to "want more recognition," it can mean many things. So when you are attempting to improve the recognition and rewards aspect of your business, we suggest fielding feedback from your employees. 

This can be achieved by:

• Anonymous surveys

• Focus groups

• 1:1 interviews

A few simple questions can reveal a lot about what employees need to feel valued by your company.

For example:

• Do you feel recognized and appreciated for the work you do? If not, why not?

• How can we better show recognition for your work?

• What type of recognition do you prefer to receive? (i.e. gifts, public praise, paid social events, more 1:1 time, etc.)

• How frequently would you like to receive recognition?

Step 3: Identify Your Goals & Fill The Gaps

After the auditing exercise is done, you should have a good idea of where your company is falling short in terms of recognition.

In extension, your most urgent goals should become clear. 

Even if you have no recognition programs in place, speaking to managers and employees can be a helpful exercise to understand what employees’ needs are. 

At this point, you should have enough fuel to start putting some ideas down on paper.

Employee recognition goal examples 

When planning, you must think about your top HR goals. Because each initiative you decide to invest in should be aligned with that goal. 

As an example, if your number one goal is to “motivate and reward high-performance,” investing in a Service Awards program shouldn’t be your priority.

Service Awards are essential, but the drawback is that they are sparse. Employees only get an award every few years. Imagine waiting two years to hear "good job on that outstanding assignment...from 2 years ago." 

Instead, you would want to explore a recognition method that permits for timely, personalized recognition. That would be more impactful in this case and fulfill your most urgent HR priority.

In short -- zoom out. Consider what you are hoping to achieve with these programs. Of course, you want to keep employees happy and turnover low, but what are the specific goals?

Here are a few examples:

• Recognize years of service 

• Create a positive work environment

• Create a culture of recognition 

• Celebrate employee life events

• Motivate high performance

• Reinforce desired behaviours 

• Support organizational mission/values 

• Increase morale

We recommend picking two to four goals. Anything more than that would be overwhelming. Start small, and build from there. And number those goals in order of priority. 

List out ideas linked to each goal

If you did the exercise above, your list might look something like this:

• Goal 1: Motivate high performance

• Goal 2: Support organizational mission/values 

• Goal 3: Recognize years of service 

When your goals are clear, it becomes much easier to brainstorm worthwhile ideas. And each new idea will be tied to your most important HR objective. Don't worry, this is not set in stone! You will be refining your list in the next step and overtime as well.

Step 4: Build Your Recognition & Rewards Plan

In this step, the goal is to create an institutionalized process for recognition. This plan outlines the structure for rewarding and recognizing employees in your organization.

Once your plan is completed, the following should be established:

1. Recurring recognition events

2. Who recognition will come from

3. Who the recipients will be

4. The frequency of each event

5. A goal for each recognition event

6. A budget for each recognition event

7. Any third-party providers involved

In short, a plan helps you zoom out. And it helps provide everyone with transparency. 

• Your finance team can clearly see the business implications of each program.

• Managers are accountable for fulfilling specific recognition events. 

• The frequency of recognition is clearly visible; gaps are easy to identify. (i.e. are employees waiting too long for recognition between events)

Here is an example of what a recognition plan might look like:

Remember: this plan is not set in stone. It's a general roadmap. You can always adapt and revise the plan as your organization's goals change (they will definitely change!) or as you get feedback from your employees. 

Equipped with a plan, HR teams are able to see clearly what needs to be done. All parties involved in promoting and upholding the employee recognition strategy also have visibility into the plan.  

Step 5: Execute Your Employee Recognition Strategy 

The final step is to zoom in and execute your ideas. Of course, launching multiple programs cannot happen all at once. This is a long-term objective. But start working on the program that is linked to your most urgent organizational needs. 

In the example above, the goal of motivating high performance is the highest priority. As such, you will prioritize the celebration of quarterly wins. 

The next step is to zoom in. You want to set some parameters for these celebrations. 

Some factors to consider:

• What is the benchmark for earning a quarterly reward?

  • For example, employees who exceed their quarterly objectives by 10% receive a reward.

• How will you reward employees? Will it be an informal awards ceremony with public recognition? Or will managers offer small gifts to employees in private? Maybe a bit of both? As you can see, there are different options to consider. 

• Find a vendor that can provide gifts or rewards for this recognition event (if needed.)

Create a practical process. Managers don’t have to wonder when to give recognition, who should receive it, or how often to do it. There are clear guidelines. As a result, the vague goal of "giving more recognition" turns into concrete actions to take. 

Employee Recognition Strategy: Implementation Tips 

You’ve built your recognition strategy. Your plan is in place. You have buy-in. You’re ready to roll. But execution is where real change happens – and it’s also where efforts can fail. The best practices below will help you stay on track. 

Consistency over perfection 

The best employee recognition programs aren’t necessarily crazy innovative. But they’re consistent. Build recognition into your daily and weekly processes. It can be as simple as having a “win of the week” Slack thread every Friday. Team members can give each other shoutouts. It’s a small but meaningful ritual. Regardless of the format, frequency and follow-through matter more than grand gestures.

Lead by example 

As a leader, you need to actively model the behavior you want to see. Recognize employees often. Give personalized, thoughtful feedback. It sends the message that employee appreciation matters. Imagine this: A sales VP makes it a habit to send two personalized thank-you notes every week. Over time, other managers start doing the same. Recognition becomes embedded in company culture. 

Keep things fair and inclusive 

Recognition should always feel fair. People notice if the same names keep popping up or certain employees feel overlooked. It erodes trust and can lead to disengagement – exactly the opposite of what you’re aiming for. So, make sure there are clear and consistent criteria for recognizing employees. Confront biases. Look at data to spot patterns. And don’t forget remote and hybrid workers, who are at a greater risk of being overlooked. 

Solicit employee feedback 

Your strategy might look great on paper, but how is it actually landing with your team? Don’t just guess – ask. From pulse surveys to informal chats, find out how employees feel about recognition efforts. Use your insights to pivot tactics as needed. You may be surprised about what people value the most. 

Celebrate milestones and momentum

Recognition itself deserves recognition. Highlight wins as you deploy your employee recognition strategy. Celebrate employees who uplift others. Acknowledge managers for being active on your employee recognition platform. Applauz delivers actionable analytics you can use to highlight wins. It will motivate people to keep the habit going. 

Refresh your employee recognition strategy regularly 

Even the best strategy needs to evolve. Is employee recognition starting to feel stale? Switch things up. Gamify the process with points and rewards. Experiment with new formats. You don’t need to start from scratch, but keep things dynamic. 

Final Thoughts

Asking people to give more recognition is like asking someone to simply exercise more and hoping they'll magically do it. Spoiler: they probably won't. 

"Creating a culture of recognition" is a broad goal. It must be broken down.

When there are clear stakeholders who are responsible for taking concrete actions, you will see progress and results. Your company needs to establish ideas and expectations that are tied to your most important goals. This article gives HR teams a framework to support employee recognition efforts. 

With a recognition roadmap, HR leaders can stay focused on the big picture and come up with impactful ideas. Most importantly, everyone knows what is expected of them. 

To set your team up for success, leverage an employee recognition program like Applauz. With features like personalized rewards and automated milestone celebrations, it helps you follow through on your employee recognition strategy.