The difference between employee rewards and employee recognition
Although the terms employee rewards and employee recognition are sometimes used interchangeably, they are actually two different terms with different meanings. Knowing the difference between the two is key in understanding how you can implement both within your business.
Here, we have decoupled the two, defining them individually, and exemplified a few ways you can incorporate them into the workplace.
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What is employee recognition?
Employee recognition refers to the acknowledgement of employees’ outstanding performance at work. As a business owner or team leader, you should be able to recognise your employees, and express your appreciation in their contributions to the company. This can range from large projects that were successful to smaller daily tasks and responsibilities that they always complete by the deadline.
Sincerely saying thanks to your employees can help improve their morale and cultivate a work environment that is positive and encouraging of one another. You are able to build an emotional connection with your employees, fostering a loyal relationship as employees will feel valued and recognised.
Employee recognition can involve things like:
- Saying (verbally, not digitally) thanks
- A shout out on social media or company newsletters
- Certificates acknowledging their achievements
- Award ceremonies with trophies and/or medals
- ‘Employee of the month’
- Celebrating birthdays or milestones
- Early finish or extended breaks
What are employee rewards?
Whilst recognition is intangible, apart from the occasional certificate or trophy, employee rewards are tangible, usually with a monetary value attached. It is a form of acknowledgement which can include rewards such as:
- Gift cards
- Discount vouchers
- Free lunch or dinner
- Valuable goods such as a new tablet
With rewards, employers expect a certain standard when it comes to employee performance so that they are eligible for a reward in the first place. In return, employees expect a reward if they work to that standard, so rewards are transactional and driven by outcome. Although employee rewards can also help with employee retention, rewards are more likely to attract new employees if they can see that the company provides rewards for hard work.
Utilising both rewards and recognition
Now that you understand how the two differ, it is worth mentioning that many businesses recognise employees through rewards. It is worthwhile to implement a recognition strategy that has rewards – recognition with monetary rewards in particular are deemed to be effective in decreasing turnover.
Continuously noticing and appreciating these behaviours could in turn reinforce such behaviours, enabling a more productive workforce that drives business success. In addition to this, encouraging recognition helps to create a company culture that highlights the achievements of others, which in turn encourages employees to reciprocate this between each other for an overall positive and enthusiastic environment.
A perfect balance between employee rewards and employee recognition should be struck to ensure that your employer brand value is not only attractive to potential employees, but also capable of reducing turnover and increasing employee retention. Rewarding and recognising your employees can improve their wellbeing and morale – and in the end, your business will thrive because its workforce is actually engaged and motivated to be productive, dedicating themselves to securing business success.