Employee recognition: The ultimate guide for employers
29 July 2025
Introducing your employee recognition guide, containing everything you need to know to create a winning employee recognition scheme. From why it matters to the steps to follow to get your employee recognition programme off the ground and running, this guide is the one resource you need to understand how to embed a strategy that delivers results.
In a hurry? Here are your key takeaways.
- Employee recognition is a strategic business tool, not just a perk: Recognition is critical to talent attraction, engagement, retention, and culture transformation. Renowned workplace theorists like Maslow, Herzberg, and Pink all discuss the importance of employee recognition. When done well, it boosts productivity, loyalty, and mental wellbeing, making it a foundational part of your overall people strategy.
- A successful programme must be structured, inclusive, and value-based: This blog outlines eight essential steps to build an effective recognition programme: Define clear objectives and KPIs, ensure inclusive governance with transparent criteria, align recognition to company values, understand your workforce’s preferences, choose flexible recognition methods, guarantee fairness and accessibility (especially for deskless workers), launch with communication and champions and continuously measure and evolve.
- Peer-to-peer recognition is among the most impactful: While employees expect recognition from managers, employee-to-employee recognition often feels more genuine and meaningful. It encourages a positive workplace culture and fosters collaboration across teams, making it a high-impact element of any recognition scheme.
- Recognition has tangible business benefits: The guide highlights eleven reasons to prioritise recognition, including: 147% higher earnings per share for engaged companies (Gallup), 31% reduction in turnover (Deloitte), 41% decrease in absenteeism, better attraction of top talent boosted mental and physical wellbeing and enhanced CSR and social value credentials.
- Recognition must be consistent, timely, and tailored: Whether it's verbal praise, written thanks, public acknowledgements, or financial rewards, recognition should feel personal and timely. Programmes that are customisable to employee preferences — and that balance formal and informal methods — are more likely to succeed.
If you've got time to stick around, let's dive a little deeper.
What is employee recognition?
A general employee recognition definition is acknowledging individuals within your workforce for their efforts and contributions. The reason for expressing recognition of employees could be related to anything from the length of service to the quality of their work.
That’s just skimming the surface.
Employee recognition is much more than a tick-box exercise. An employee recognition scheme is a fundamental element of your retention and talent attraction strategy.
Why?
Recognition boosts employee sentiment, engagement, loyalty, motivation, productivity, and happiness. The psychology of employee recognition is captured in workplace theories by the likes of Maslow, Herzberg and Pink.
Appreciation and recognition for employees: What’s the difference?
While we’re on the subject of employee recognition, we should also address appreciation, as the two are often interchanged. We cover the topic in detail in our blog, ‘Why Employee Appreciation is Important’, but for clarity, appreciation is more about valuing employees regardless of their contribution.
Why employee recognition is important
Employee recognition is important for many reasons, and we’ll explore them in more depth in our section 'Eleven reasons to prioritise employee recognition'. One of the most fundamental reasons for recognition being so vital is the psychological impact.
A robust recognition strategy can help reduce workplace stress, as we explore in our blog, ‘Reducing Stress by Increasing Recognition’. Your recognition strategy can help you drive cultural change, keep employees engaged during business transformation, encourage specific behaviours, retain talent and create an employee experience that delivers results.
How employee recognition is effective
How is employee recognition effective? It comes back to psychology – human nature. Alongside an end-to-end wellbeing strategy, your employee recognition scheme helps ‘top employees up’. Recognition gives employees a boost, reinforcing their efforts, enhancing their feelings of self-worth and encouraging them to continue to perform to their best ability.
Dive into our blog, ‘Harness the Power of Motivation with Maslow, Herzberg, and Pink’, to get to grips with the theories behind workplace recognition.
Employee recognition examples
Are you looking for inspiration or examples of recognition for employees? Here are a few to get you going:
Verbal praise
One thing to remember is that employee recognition doesn’t need to be a big event. You don’t need to wait for a special occasion or a weekly meeting. It’s more effective when offered in the moment.
A written thank you
Like with verbal praise, a written note of thanks ought to be timely. If you have a recognition platform, you can encourage colleagues to share recognition through it, but an email or message on a chat still makes an impact.
Regular recognition
Build more regular recognition into your strategy, picking one or more winners from the nominations shared and recognition expressed each month. It takes the age-old ‘employee of the month’ piece to a more inclusive place, especially if you create a group of independent peers to choose the winners.
Employee-to-employee recognition
Also known as peer-to-peer recognition, encouraging colleagues to praise each other and acknowledge their input and value creates a positive and joyful workplace culture.
Public acknowledgement
Not something that all employees will appreciate, but sharing your employees’ successes publicly is something you should consider including as part of your employee recognition programme.
Annual awards
Everyone… almost everyone loves a party, and an annual awards ceremony allows you to recognise and celebrate your people in style.
This list isn’t exhaustive. Other employee recognition examples include more formal approaches, like performance bonuses.
What is the best recognition for employees?
What’s the best recognition for employees? Top of the list is consistent recognition. To be most effective, you must embed employee recognition into your culture, and it must be timely, with structure and purpose.
Peer-to-peer recognition is perhaps one of the most powerful and arguably the best recognition for employees. A good quality manager will regularly recognise their team, and while it matters, employees expect to receive it from them. When an employee takes the time to recognise a teammate or colleague from another department simply because they want to, not because it’s an expected part of their job, it makes the recognition more meaningful, creating a lasting impact.
Top tips on launching your employee recognition programme
The steps involved in building a successful employee recognition programme will vary depending on your culture, practices and goals. Here, we’re giving you eight steps to building a successful employee recognition programme.
Follow our eight-step strategy to see the best results, tweaking, where necessary, to meet your unique needs.
Step 1: Define your objectives
When you start any new project, you must define your goals. By defining clear objectives, you can plot your key performance indicators (KPIs), allowing you to keep track of progress and measure success.
Whether your objective is to increase engagement, productivity or employee retention, you should have a clear KPI and a benchmark of where you’re starting from.
Step 2: Plan the governance
A fair and inclusive employee recognition scheme needs governance. A clear set of recognition criteria so employees know what will earn them recognition and what they should recognise others for. If your employee recognition programme involves selecting monthly or annual winners, you must also establish a process for choosing them.
Here at Pluxee UK, we have a panel of peers who score each nomination against a set of guidelines, and the winners are those who receive the highest scores.
Step 3: Define your values
Employee recognition isn’t just about big wins and top performance. Values-based recognition schemes encourage your workforce to align with your organisational values – to adopt and repeat desired behaviours.
A values-based employee recognition programme gives everyone the same opportunity to shine. It enables people to recognise the colleagues in the background, who power through and deliver for your business, but aren’t necessarily associated with the bigger wins.
Step 4: Understand your workforce
Your employee recognition programme should reflect what matters to your business, as well as to your workforce, especially when it comes to your employee rewards strategy. Understanding your workforce will also help you make your employee recognition strategy successful. It can take time to nurture employee buy-in when you introduce something new, even when it brings positive change. Understanding your workforce allows you to consider the best way to launch and run your scheme to deliver the most impact.
Step 5: Choose the most appropriate recognition methods
Part of understanding your workforce means knowing what recognition methods will yield the best outcomes. Whether it’s public praise, a direct conversation, or a big bang, your employees will appreciate something different.
Embed flexibility into your employee recognition programme to ensure you can make it as personalised and impactful as possible.
Step 6: Ensure fairness and inclusivity
Part of the governance process is ensuring that your employee recognition scheme is fair and inclusive. Applying a values-based approach helps with this because it celebrates behaviours over results. Another element of inclusivity comes down to access and visibility.
Deskless workers can be harder to reach, and depending on your recognition platform, they could struggle to gain access. Ensure your employee recognition platform is mobile-friendly to improve accessibility, engagement and inclusivity.
Step 7: Implement the programme
Implementing your employee recognition programme involves more than just pushing a button – setting something live. Plan launch communications or a launch event to generate buzz. Get employees excited about what it means for them to encourage them to get involved.
Ensure employees can access and are clear on the behaviours or actions that they can recognise others for. When it comes to embedding a new employee recognition platform, creating super users or recognition champions will help with getting your whole workforce enrolled and help alleviate any potential teething problems.
Step 8: Measure and evaluate
You’ve identified your goals and defined your KPIs at the start. Don’t wait until the end of the year to see how you’re tracking against them. Regularly review the results and monitor employee behaviours, evaluating any changes you may need to make to your strategy.
Sometimes it’s a quick fix, like encouraging employees to be more engaged in the recognition platform. If there are more significant issues to resolve, then it’s best to tackle them and evolve your strategy sooner rather than later, to get the best results and return on investment.
Encouraging employee-to-employee recognition
We’ve discussed the importance of employee-to-employee or peer-to-peer recognition on improving engagement and satisfaction, but regularly recognising others won't always come naturally.
If you’re implementing a new scheme and employees haven’t previously had a formal platform to express their gratitude, you’ll need to encourage them to get more involved before it becomes second nature.
Creating a buzz when you launch the scheme will help, but you should also consider giving rewards. Be sure to include a category for the person who nominated the most colleagues at your annual employee awards event.
11 reasons to prioritise employee recognition
We’ve explored what employee recognition is and how to launch your programme. Next, we’re giving you eleven reasons that define why you should prioritise it. From driving employee engagement to improving financial wellbeing, read on for the eleven reasons that will support you in building your recognition scheme business case.
1. Driving employee engagement with recognition
A supportive and inclusive reward and recognition strategy will boost employee engagement. Companies with an engaged workforce deliver 147% more earnings per share than their competitors (Gallup).
2. Improve employee performance
When you effectively recognise and reward your employees for their brilliance, however you define it, you encourage them to continue at that pace. An unappreciated employee performing at a high level will lose their drive and passion if their hard work is unacknowledged, and their performance will decline.
As we explore in our blog, ‘Reducing Stress by Increasing Recognition’, 79% of workers said they worked harder when recognised, and 78% were more productive!
3. Reduce absenteeism
When you use your reward and recognition strategy to keep your workforce engaged, happy, and acknowledged, you could reduce absenteeism by 41% (Gallup). In addition to increased engagement, if you’ve included mental and physical wellbeing initiatives in your strategy, you could improve the health of your workforce, reducing sickness-related absences as well.
4. Retain top talent
45% of people in employment are looking for a new job, and if your employees feel undervalued, they may join that figure. A study conducted by Deloitte found that recognition programmes reduce voluntary staff turnover by 31%.
5. Attract talent
With employees demanding more and job seekers in the driving seat, talent acquisition has become a challenge for HR professionals. Improving your employee value proposition with a robust reward and recognition strategy and sought-after employee benefits helps attract top talent and shorten the expensive recruitment process.
6. Improve employee financial wellbeing
When combined with monetary rewards, your employee recognition scheme can improve employee financial wellbeing. In an uncertain economic climate, employees may cut back on the things that bring them joy, as revealed by a YouGov survey. A bonus, money added to their prepaid cashback card, or eVouchers, gives employees a chance to spend on something that will improve their quality of life without impacting their budget.
7. Create a positive workplace environment
We’ve mentioned the role employee recognition plays in improving your workplace culture, but why is this a reason to prioritise it?
When you create a positive workplace culture through fairly and effectively rewarding and recognising your employees, you can see improvements in many areas. Your happy and engaged workforce will be productive, your absenteeism rates will reduce, you’ll be in a better position to retain your top talent, and you’ll be on your way to becoming an employer of choice.
8. Enhance your social value credentials.
Your recognition scheme can also enhance your social value credentials, which, as Business Expoli reveals, matters. Often linked to Corporate Social Responsibility (CSR), social value doesn’t just focus on the business’s environmental and community initiatives but also looks at how you take care of your people.
Build non-financial rewards like volunteering into your employee recognition strategy to give your CSR credentials a real boost.
9. Nurture a loyal workforce
Beyond engagement and the drive to do well and stick around, a loyal employee will live and breathe your business. If an employee feels like your business is doing its best for them, they will repay that generosity in kind.
10. Improve physical wellbeing
Just as employee rewards can improve financial wellbeing, they can also enhance physical wellbeing. From a monetary reward perspective, employees could purchase items to improve their physical health, such as at-home gym equipment or even a spa day.
From a non-monetary perspective, giving employees time off as an employee reward will give them extra time to find balance and recoup.
11. Enhance mental wellbeing
Financial difficulties caused by the cost-of-living crisis add to personal pressures and magnify any existing work-related stress until your employees reach a point of burnout. Monetary rewards can improve financial wellbeing. The knock-on effect is that this can also improve mental wellbeing.
Without the element of monetary rewards, we’ve explored the role recognition has in improving self-worth, engagement, culture and happiness, which all support a positive mental outlook.
Your employee recognition guide with Pluxee UK
You’ve learned everything you need to know about employee recognition programmes, from why they matter, the benefits to your people and business, employee recognition best practices, and how to make your scheme great.
An impactful employee recognition scheme helps your business thrive, supporting a sustainable people and ultimately, a growth strategy.
Join us in making work not just a place to be but a place to belong.
Sources: Gallup, Deloitte, YouGov, Business Expoli.
FAQs
Do you have any tips on how to measure employee recognition?
To measure the impact of employee recognition, define what you want to improve, measure your current level, and then track the improvements.
What does recognition mean to an employee?
To an employee, recognition means that you see them and that you value their contributions, giving them an enhanced sense of self-worth.
What should I write for employee recognition?
Keep it natural and on point, ensuring it’s personalised and relevant to what you’re recognising them for.
What type of recognition do employees want?
This is a great question, and it’s best directed to your employees because they will each have a different answer. Try to personalise your scheme to make it as inclusive as possible.
