New Employee Recognition Strategies for the Modern Workplace

Imagine first thing Monday, you sit down at your desk, boot up your old Macintosh computer, and wish your coworkers a good morning on AOL Instant Messenger—just have to wait a minute for the dial-up internet to connect and hope no one’s trying to make a call right now.

This scenario likely seems so far-fetched as to be completely unrealistic. After all, what modern company would use such archaic systems? Not only would the obsolete equipment be impractical, but it would also be incompatible with today’s advanced technology.

And yet, most companies do not apply the same logic to their employee recognition.

Many modern businesses still use outdated recognition programs and practices when handling their most valuable resource: their employees. In fact, 45% of surveyed employees said the recognition they receive at work feels like an empty gesture that is not meaningful to them, according to O.C. Tanner Institute research.

This begs the question: if you wouldn’t use outdated technology, why would you use outdated employee recognition?

Just like technology, employee recognition has evolved as our society’s values, challenges, and needs have evolved. Let’s take a look at how recognition culture has changed over the years—and what your company can do to change with it.

What is employee recognition?

If you strip away the internet’s countless statistics, suggestions, and strategies, employee recognition can be defined quite easily. Employee recognition is the act of ensuring your employees feel appreciated and valued. It’s as simple as that.

Where did employee recognition come from?

Recognition in the workplace first took off during the American Industrial Revolution. In this new age of unprecedented industrialization, employers needed better ways to increase workplace efficiency by motivating their workers. Enter Frederick W. Taylor and his Scientific Management theory.

Through his studies, Taylor discovered that the promise of continued employment was not enough to actually motivate employees. They needed something more. He theorized that monetary rewards were the most effective motivators—since, he reasoned, what could possibly motivate workers more than money?

In the following years, recognition ideas and how to implement them steadily evolved. These new forms of recognition began to shift into employee awards, promotions, and pay incentives for top-performing and tenured employees. Employee recognition programs were primarily based around rewarding competitiveness and recognizing those who managed to climb high on the corporate ladder.

How effective are employee recognition programs?

The easy answer? Extremely. Our surveys show that when a company has no consistent organizational strategy for recognition, the odds of employee burnout increases by 29%.

Unfortunately, the more complicated answer is that many employers who use recognition programs still might not be seeing very positive results. This is often because their recognition programs haven’t been updated since they were first implemented.

Outdated employee recognition practices

Now that we know how we got here, let’s take a look at the recognition methodologies that have overstayed their welcome. Consider carefully if you’ve observed any of these practices in your own company.

One-size-fits-all recognition

Back when employee recognition was the “new thing” in business, many companies simply created a recognition program and stuck with it. As a result, while their company grew over the years—gaining new departments, updating systems, going wireless—their recognition program stayed exactly the same.

Unfortunately, this resulted in recognition systems that revolve around just one kind of employee, one area of work, or one type of reward—all of which are likely not even relevant in the workplace anymore.

A recognition program that fits no one is just as bad as no recognition program at all. This is why 35% of surveyed employees said that it seems like their leadership has a recognition quota to fill—rather than that their leaders actually appreciate their employees.

Competition-based recognition in a rigid hierarchy

It’s natural to want to reward employees with the highest performance records—or to favor those who have more authority and responsibility. This is why 42% of those surveyed said they feel leaders are the only important employees at their organization, and 39% said that only the favorite employees are recognized in their company.

This problem frequently occurs when a company is still using an outdated, competition-based recognition system—one that pits employees against each other and recognizes only those who come out on top.

Relying too much on annual performance reviews

Once employers learned that communicating with employees was crucial, many companies implemented an annual one-to-one where leaders could ask questions and provide a performance review that encapsulated the entire year.

Unfortunately, the annual review has become a catch-all for not only discussing performance and goals but also for giving recognition—which makes employees feel like their hard work is an afterthought. This separation between leaders and their people explains why only 55% of surveyed employees report feeling close to their leader.

A heavy focus on extrinsic, monetary rewards

It’s easy to assume that because employees work for money that money must be the best way to reward them. This idea was popularized in the early 1900s with Frederick W. Taylor’s work, and it has never really been forgotten.

In reality, money often has less meaning for employees than employers think it does. A recent survey revealed that 89% of employers think employees leave because of money—when only 12% actually do. While an occasional gift card doesn’t hurt, many companies rely solely on monetary rewards rather than meaningful recognition awards that convey how much they truly appreciate their people’s great work.

Why does employee recognition need to change?

You may be thinking that if old recognition methods have worked for so many years, why do they suddenly need to change now? But just like with technology, there’s a simple answer: insight and compatibility. We have more insight into what drives people than ever before, and old recognition methodologies simply aren’t compatible with new generations of employees.

What do younger generations want from their jobs?

With the myriad job opportunities provided by the internet, many younger employees aren’t “just happy to have a job” or particularly interested in climbing one company’s ranks—in fact, most Gen Zers and Millennials desire purpose more than titles and power.

These results from a recent Virtuali survey show what newer generations value in the workplace:

• 47% of Millennials want to be leaders because they want to empower others, not because they want to tell people what to do
• 88% seek a collaborative work culture rather than a competitive one
• 79% desire a coach or mentor rather than a traditional boss
• 88% hope to incorporate work-life "integration" (as opposed to work-life balance).

Because the new working generations are less focused on monetary rewards, power, and a competitive work culture, employers need to stop using those elements to incentivize and reward employees.

Extrinsic motivation versus intrinsic motivation

For years, companies treated recognition like a dangling carrot: you run fast enough, you get the reward. Instead, leaders should treat recognition like fuel for the engine that drives their employees. This is the difference between extrinsic and intrinsic motivation.

Running because it makes you happy is intrinsic motivation. Running because you want to win a marathon is extrinsic motivation. As a leader, you want to ensure your employees experience both kinds of motivation in your workplace—but there’s a catch.

The Over-justification Effect occurs when, over time, an excess of extrinsic rewards (such as money) decreases a person’s intrinsic desire to perform a task. Think of it this way, if you enjoy having a clean kitchen, you might motivate and reward yourself with a bowl of ice cream every time you do the dishes. But soon you will become more driven to do dishes to get ice cream than because you enjoy having a clean kitchen.

The same principle applies to employee recognition. Leaders need to stop trying to motivate employees through empty extrinsic rewards and instead use their recognition system to encourage intrinsic motivation in their people—especially for younger generations who already desire a sense of purpose in their work.

How does outdated recognition affect current workplaces?

Because younger employees want different things from their jobs than past generations, old recognition systems affect them negatively—resulting in burnout, lack of engagement, and poor performance. Let’s take a closer look at how obsolete recognition practices damage both your employees and your company.

Employee burnout

Our research shows 40% of employees are experiencing moderate-to-severe burnout. Because younger generations want purpose in their jobs, their happiness relies heavily on leadership recognizing how their work fulfills that purpose. A lack of purpose (and a lack of acknowledging employees’ efforts toward it) is going to leave them feeling unmotivated and burnt out.

Higher turnover rates

It’s a simple concept: if people are unhappy where they work, they’re going to work somewhere else. In fact, if offered a job at a different company with a similar role, pay, and benefits, today, 59% of employees said they would accept the job. Notice what’s missing in that list? There’s no mention of a similar recognition program. The truth is that people will go (and stay) where they feel appreciated.

Less engagement and desire to produce great work

A recent survey revealed that only 16% of employees felt “connected and engaged” by employers. This is where extrinsic motivation (when done right) is invaluable. Few people come to work simply for the joy of working—they expect ROI for their time and effort. Outdated recognition systems inhibit true employee engagement by not helping employees feel valued for their contributions.

This is not simply young people being spoiled or ungrateful. We know this because 61% of surveyed employees reported feeling replaceable at their organizations. This is a result of poor recognition eroding employee loyalty and making it easy to leave without guilt. After all, why would a machine miss a replaceable part?

Poor workplace culture

Outdated recognition practices can turn even the sweetest company culture sour. Competition-based systems often inhibit people’s desire to recognize and compliment their coworkers—creating a self-centered, insular culture. This explains why only 32% of employees feel like they receive frequent recognition from peers. Their companies aren’t cultivating the right environment for people to truly connect with each other.

How to adapt recognition for the modern workplace

The simple answer is “make an effort and make it personal.” Just like any relationship, it takes work to make the other person feel special. In your case, the relationship just happens to be on a much larger scale—since you must ensure every one of your employees feels valued, appreciated, and irreplaceable.

Provide more holistic recognition

One of the best ways to improve your employee recognition is also the easiest: diversify your program. Rather than stick to the old recognition model that centers around only one aspect of performance, focus your effort on three separate areas: celebrating careers, rewarding results, and encouraging effort.

Each one of these recognition areas is important and impacts employees in a unique way—and yet, only 38% of companies give equal value to all three. This is a wasted opportunity because when these areas are combined, 55.8% of Human Resource leaders report that their programs deliver “excellent” value.

Give specific rewards for each recognition area

While we encourage employers to listen to their employees, there is one area where you have to tread a little carefully. A recent Cicero survey revealed that when employees are asked how they want to be rewarded, recipients almost always answer “cash.”

This is likely the main reason so many companies still rely on money as their go-to recognition reward. The problem with this is that cash is impersonal, spent quickly and forgotten quickly, and generally used to buy non-award items.

In fact, when measuring the effect on “excellent” value, cash was not even in the top three award types across all recognition areas. Instead, awards and other meaning-filled gifts won every time. Here’s a small rundown of the three types of recognition and their best rewards:

• Celebrating careers: a publicly presented “Years of Service” award
• Rewarding results: a publicly presented souvenir-style award
• Encouraging effort: informal recognition, such as a written note, email, or sincere verbal “thank you”

Use one-to-ones to bond with and recognize employees

Obsolete recognition systems often use annual reviews as the only opportunity for a leader to have an extended conversation with their employee. But because modern employees want connection, 46% of them report that regular one-to-ones help them feel more appreciated.

That number increases exponentially when managers are actually taught the best ways to hold one-to-ones. Rather than dragging an employee into a weekly review of their performance, leaders should use one-to-ones to connect with their people and offer them personal recognition for their good work.

Turn recognition into a communal experience

The strict hierarchy of the outdated workplace was designed to keep everyone in their lane—and only leaders had the authority to give out recognition. But modern employees desire a more communal workplace where peer-to-peer recognition and team building are prioritized.

Results show that when companies encourage peer-to-peer meetings, they see 2x greater odds of retaining employees. Take advantage of this by fostering a company culture where employees are encouraged to celebrate their coworkers rather than compete with them.

The real-world results of revitalizing employee recognition

It’s one thing to know you need to change; it’s another thing to actually do it. This is what sets companies who are serious about employee recognition apart from the others.

Centra Health is one of those companies.

Centra Health faced the challenge of incorporating meaningful recognition into an industrious, far-reaching healthcare organization—but they knew recognition was too important to let that challenge stop them. After partnering with O.C. Tanner, Centra Health launched their new company-wide recognition program “Thanks to You.”

Regular, meaningful recognition

Karen Ackerman, Centra Health’s Vice President of Human Resources, perfectly captured the spirit of regular recognition when she said, “We don’t just want to say thank you after five years or when you are leaving the organization—we want you to know every day counts.”

Centra Health focused their recognition program on building relationships and making recognition a regular part of the employee experience. They did this by asking employees how they wanted to be recognized, instructing leaders on the best recognition practices, and establishing systemic recognition processes. This ensured their recognition values suffused every part of their workplace culture.

Connection, not competition

Centra Health was so dedicated to recognition that in 2019, they created their “Recognition Champion Program.” This program appointed “Champions” throughout the organization to help encourage teammates to recognize each other through their “Thanks to You” program.

Additionally, Centra Health employees are encouraged to recognize coworkers both on their direct team and on other teams. This builds a greater sense of unity and helps each employee understand that their work is seen, valued, and appreciated beyond their personal sphere.

The results of Centra Health’s recognition revolution

After only two years, Centra Health’s recognition programs saw amazing results:

• 89% of employees received recognition from the program during the first year
• Both formal and informal recognition made a significant impact on employee turnover
• On the first annual survey after the launch, employees proactively mentioned being appreciated as a peak moment in their experience
• Both monetary and non-monetary eCards decreased employee attrition
• Leaders reported a tighter connection between managers and employees—as a result of being united by a common purpose

It’s interesting that one of the biggest impacts of Centra Health’s recognition programs comes from something as simple as eCards. This demonstrates how modern recognition is more about meaning than money.

Aubrey Varraux, Centra Health’s Total Rewards Program Manager, put it best: “People aren’t just in it for the 250 points, or to get the most expensive thing in the program…they value the act of recognition, and it’s meaningful to them. Even a simple eCard.”

Read the full story of Centra Health’s recognition transformation.

How to keep your recognition program fresh

Even though employee recognition may evolve, the ways to keep it fresh will always stay the same. Things like flexible systems, employee surveys, and recognition technology are great starting points. Let’s explore the simple steps you can take to ensure your finger is always on the pulse of employee recognition.

Teach leaders to listen to their teams

No two workspaces are identical. Because of this, what works for one company might need a few tweaks to work for another—and what works now may not work in the future. Encourage your leaders to talk to their team members about your recognition program so you can personalize it just for them.

Keep your recognition systems flexible

As we’ve already seen, many outdated recognition programs go wrong because they adhere too strictly to systems that seemed to work in the past. To prevent this in your company, keep your rewards and recognition programs flexible and open to change.

Use digital recognition systems

Just one director in Centra Health was responsible for 175 team members spread across 150 miles. With the internet expanding job opportunities, this is becoming the norm—and making recognition mobile is becoming more and more of a necessity. Take advantage of modern technology to ensure every one of your employees feel appreciated, no matter where they are.

Consider outsourcing your recognition program

Because many companies start small, they only need a small recognition program to begin with. But as a workspace expands, managing a bigger program often becomes too much to handle. In a recent survey, only 37% of decision makers felt their in-house program delivered “excellent” value—compared to external vendors, who generate “excellent” value 65% of the time.

Take an honest appraisal of your recognition program and ask yourself if you need outside help to both update and manage it. A professional employee recognition company can help you create a recognition program that will last far into the future.

Learn more with this comprehensive guide to employee recognition programs.

Stay up to date on the latest recognition trends

You should always be learning fresh, creative employee appreciation ideas for your company. But this tip comes with good news: you’re already doing it! Check up on helpful recognition resources, like O.C. Tanner’s Global Culture Report which offers an in-depth analysis and breakdown of the latest culture trends, obstacles, and opportunities.

If you take away nothing else from this article, remember one thing: employee recognition is about ensuring every person in your company feels appreciated and valued—these new recognition strategies exist only to help you actually achieve that.

How to update your employee recognition

• Change one-size-fits-all reward systems into personal recognition programs
• Replace monetary rewards with meaningful employee recognition awards• Hold regular, casual one-to-ones in addition to annual reviews
• Transform your competition-based reward system into a community-based recognition culture

If you’re interested in learning more about how O.C. Tanner can help you craft the right employee appreciation program, please reach out.  

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