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Pros and Cons of Employee Recognition Programs

June 14, 2022

Three employees working around a computer at desk

There are more and more companies committing to developing employee recognition programs. They can be critical in building a culture of appreciation. But these programs aren’t always simple to implement - there are plenty of pros and cons of employee recognition programs.

When done right, however, employee recognition and rewards programs can improve morale, retention, and employee satisfaction.

To help you decide if one is right for your company, we’ve put together a list of pros and cons of employee recognition programs.

Pros of Employee Recognition Programs

 

1. Happier Employees, Higher Productivity

Most leaders want their team to be happy. But happy employees do more than just make for a pleasant office. Research has found correlations between happy employees and increased productivity. One study in particular found that happy employees were up to 20% more productive than unhappy employees.

One way to increase employee happiness is with a recognition program. Effective recognition is consistently ranked as one of, if not the most, important factors in employee happiness.

2. Improved Retention, Reduced Turnover

It’s a logical next step to think that if your employees are happy, they’re more likely to stay. Unsurprisingly, the data supports this as well.

One study found that companies who have a “recognition-rich culture” had 31% lower voluntary turnover. This makes sense - when people feel that they’re contributing to a bigger picture, they feel a deeper sense of purpose from their work, which makes leaving less appealing.

 

RELATED: Employee Engagement and Retention – Are They Connected?

 

3. Customizable

Another great aspect of employee recognition programs is how customizable they can be. With so many platforms and programs available, there’s something for every company.

Whether you’re on a budget, have a big team or a small one, are in-office or remote, there’s an employee recognition program that’s for you.

4. Unified Mission, Increased Engagement

Along with happiness and retention, employee recognition can help unite employees towards a mission. Positive reinforcement helps employees understand on a deeper level what their company values.

This unified mission can also lead to increased employee engagement. When people feel like they’re directly contributing to the bigger picture, they’re more likely to engage in the steps along the way.

Happy Man with Glasses Presenting

Cons of Employee Recognition Programs

 

1. Requires Commitment

An effective employee recognition program requires consistency over time to work. A Gallup study found that the ideal number for employee recognition is once a week. So, depending on your team size and your workload, giving genuine feedback weekly can be difficult.

But being inconsistent with recognition won’t work. When an employee gets recognized sometimes and overlooked others, it can end up feeling random rather than meaningful and intentional.

2. Favoritism

Whether real or perceived, a common pitfall with employee recognition is favoritism. Some employees will naturally succeed more often than others. Finding a balance between recognizing these employees, while not fostering resentment in others, can be a challenge.

One way to help avoid perceived favoritism is to take some recognition private. Offering a thoughtful direct email or one-on-one chat can actually be even more meaningful to the individual receiving the recognition than a public acknowledgment.

3. Relevant Rewards

Another challenge with employee recognition programs is making sure the reward is relevant to the person receiving it. You may think everyone likes a pizza party, but someone on your team could be gluten-free, while another is dieting. It can be hard to please everyone with a one-size-fits-all reward.

One way to avoid this is to have a recognition program that allows people to choose their own rewards. Terryberry’s 360 Recognition program allows employees to accrue points and use those points to shop in an online store. This is a great way to ensure your team is getting something relevant to them.

4. Recognizing the Wrong Person

If you’re not actively involved with your team, it could be easy to misunderstand who did what during a project. This could lead to awarding credit to someone who may be less deserving than someone else.

This could spark feelings of resentment and may even lead to de-incentivized team members. This is why starting an employee engagement program requires committed and engaged leadership.

 

When considering the pros and cons of employee recognition programs, it’s important to consider if you’re ready to commit to what it requires to be successful. A poorly run employee recognition program can not only be financially costly, but could also negatively impact your team.

When done right, however, employee recognition can result in improved retention, morale, and engagement. Who wouldn’t want that?

Interested in learning more about how your company can benefit from a recognition program? Schedule a demo of Terryberry's 360 Recognition Platform today.

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