Measurable Criteria for Employee Recognition: Samples, Ideas and KPIs for Rewards

According to Gallup, “in their search for new ideas and approaches, organizations could be overlooking one of the most easily executed strategies: employee recognition.” In today’s competitive labor market, don’t leave anything on the table when it comes to engaging and retaining your top talent. Taking a little time to intentionally map out your employee recognition systems can improve retention, increase productivity and boost morale—and best of all, it doesn’t have to be expensive to be effective.

What is Employee Recognition?

Recognition could be everything from jeans day to an all-expenses paid cruise. In researching this topic, I came across employee recognition ideas as wide-ranging as “catch ‘em doing something right!” to elaborate gamification schemes that award points in various ways that can be cashed in for gifts or even paid time off. (This list of 52 ideas from Insperity covers the gamut if you’re looking for specifics.)

At a high level, there should be two kinds of recognition happening simultaneously in your company: formal and informal.

Formal Employee Recognition

The formal programs are the ones that need to be built out carefully considering your company’s culture and values, communicated clearly so everyone understands the rules and has a shot to ‘play the game,’ and implemented in a fair and consistent way that employees find valuable. Commonly, the formal recognition programs will focus on things like tenure or achievement of specific, measurable milestones.  Typically formal programs have measurable criteria for employee recognition.

According to SHRM, there are some pretty clear criteria for success for this kind of formal program:

"The program should be well-funded, aligned with organizational goals, appropriate for employees' achievements and timely. The methods of presenting awards must be managed well, with managers themselves playing key roles. The process for choosing and recognizing employees should be straightforward, and the program should be reviewed and evaluated regularly."

Examples of Measurable Criteria for Employee Recognition:

1. Work Anniversaries: Snacknation points out a mobile gaming company called Scopely that celebrates work anniversaries “with custom made samurai swords and one-of-a-kind employee oil paintings.” Maybe in your company, an engraved watch, a card signed by the whole team or a gift of the employee’s favorite dessert would be more appropriate, but feel free to get creative and think about your culture and what your team would enjoy.
2. Additional Compensation: Annual or quarterly bonuses or performance compensation plans are another type of formal recognition. You can base this on the performance of the business or of individuals. Again, spell out the rules clearly and apply the program consistently.
3. Peer-to-Peer Recognition: Another type of formal recognition involves having a process for team members to recognize each other. You can start your meetings with “shout outs” or institute a comments box or virtual platform where team members can pat each other on the back for a job well done.
4. Company or Team Celebrations: At the end of a project, the achievement of a milestone, or quarterly/annually, some companies plan events to celebrate together. Possibilities are endless and can range from trips to ordering pizza and beer in to the office.
5. The Gift of Time: Some companies give employees a set amount of time to work on passion projects, volunteer, or even additional PTO as a form of recognition.

At Rhythm Systems, we play the “Great Game of Business” and work together to meet our company’s goals for the year and share in some of the profits. We celebrate work anniversaries and birthdays with ice cream cake at our monthly meetings, and we have a “Blog Award” each year to have some fun while recognizing team members who have made outstanding contributions to our blog. These are just a few examples of the formal recognition programs we have in place for our team building.

Informal Employee Recognition

By informal recognition, I mean the kind of recognition that your team leaders and even peers should be providing on an ongoing basis. This kind of recognition costs nothing and can mean a lot to people. Recognizing and appreciating someone on the team for good work should be done casually and frequently. Writing a hand-written thank you note, picking up the phone to call and congratulate someone on an achievement or pausing in a team meeting to recognize success all fall under this umbrella.

Leadership guru Ken Blanchard offers some simple guidelines for what he calls “the one minute praising” in this excerpt from his classic book, The New One Minute Manager:

1. Praise people as soon as possible.
2. Let people know what they did right - be specific.
3. Tell people how good you feel about what they did right, and how it helps.
4. Pause for a moment to allow people time to feel good about what they’ve done.
5. Encourage them to do more of the same.
6. Make it clear you have confidence in them and support their success.

Following this simple formula is a great way to practice providing informal recognition. In practice, be authentic rather than formulaic in your recognition. Your words will be more meaningful and motivating if you are sincere.

As you are working to make this kind of staff recognition a part of your company’s culture, you may need some mechanisms in place to encourage your leaders and peers to do this on a regular basis. Model this behavior for your teams, put time on your calendar or a priority on your Rhythm dashboard to remind you, and praise others when you see them doing this well. Basic psychological principles confirm behavior that is rewarded is behavior that gets repeated.

Additionally, rewarding employees who do good work by giving them more opportunities to use their talents is another great way to recognize top performers. This doesn’t cost you anything extra, deepens trust within your organization and gives your team the opportunity to grow and shine. I like how the article in Snacknation describes it:

“When you ask employees for help, you ‘put your money where your mouth is,’ so to speak. Recognizing an employee for a talent in videography is one thing, and asking the same employee for help on a high-profile video project is another. The latter provides recognition and shows employees you value their talents enough to put them to good use; it also demonstrates trust as you give employees leadership positions on high-profile projects.”

Pitfalls of Employee Recognition Programs:

A little reading on this topic will quickly alert you to the potential minefield that is employee recognition - somehow, something that should be simple and fun has turned into something companies avoid altogether because of the fear of “backlash.” Researchers have found that recognition can actually be demotivating for employees if not done correctly. According to an article in CIO, “...this is dangerous territory. You can do a lot of damage if you wade into these waters without the necessary skills.”

Here are some mistakes to watch out for when implementing your programs:

1. One size does not fit all. Your recognition will be much more effective if you take the time to get to know your team members and what kind of recognition they would enjoy. Calling a very shy introvert with a fear of public speaking to the stage to “say a few words” about the employee award you’ve just given may well backfire. The same goes for giving someone who doesn’t drink coffee a Starbucks gift card.
2. Rewarding the wrong behavior. Let your Core Values and Core Purpose be your guide. If your company claims to be all about putting the customer first, but all of your financial incentives are tied to getting customers off the phone as quickly as possible so you can take the next call, you could be incentivizing the wrong behavior. Think about the recent Wells Fargo fake account scandal for an extreme example of what I mean.
3. Recognition that’s too little or too late. Don’t wait until your annual performance reviews, or when the project has finished. Recognition given in the moment is far more effective. Also, be sure you are providing recognition that is appropriate and proportional to what the person did. Quick verbal praise might work for most things, but when the person has truly demonstrated outstanding work, give more thought and effort to your recognition. According to an article in Forbes, “Recognition should match effort and results, or it loses meaning. This is where the complexity lives.”
4. Poor communication and follow through. As with any initiative that you launch, your formal recognition programs must be clearly communicated to everyone in the company. You should communicate how you will be recognizing what specific behavior and why. Then, you have to execute flawlessly. If you say you are going to have a quarterly company picnic or begin naming an “Employee of the Month,” do it!
5. Lack of data to measure business impact. If you are hoping to institute a recognition program to address employee engagement, productivity and morale, you better have a way to measure how your efforts are moving the needle. If you want to ensure your programs are getting you the business results you need, then you have to measure a baseline and track progress on key metrics.

How to Measure Success?

The final pitfall in the list above may be the most commonly overlooked aspect of these programs. Employee recognition could easily be one of those aspects of your organization that you just keep doing because it's what you’ve always done or something that your company spends a lot of money on for little actual return. Avoid making those mistakes by measuring your program’s effectiveness.

What are the right KPIs to put in place to ensure you are getting the right results? There are a lot of Key Performance Indicators for Employees to measure employee success including engagement survey scores, turnover, training hours, Employee NPS and many more. The key is to identify the specific business problem you are trying to solve, determine a KPI or two that will help you measure the results you want to see, and start tracking the KPI on a dashboard. Once you’ve implemented an employee recognition program, watch your numbers; are they moving in the right direction? If not, what adjustments can you make to your program?

Start small, try some things, measure your results, make adjustments and continuously improve your company wide employee recognition program over time to help your bottom line, while improving your company culture.

Photo Credit: iStock by Getty Images