Reward And Recognition Framework (Definition And Benefits)

By Indeed Editorial Team

Published 15 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A company's reward and recognition programme can help identify employees who perform well at work, which motivates staff and increases productivity. Supervisors, managers and human resource (HR) personnel often look for ways to show appreciation for their employees. If you are planning a career in human resources, it is important for you to understand how to create an appropriate recognition framework for an organisation to encourage employees in the workplace. In this article, we discuss what a reward and recognition framework is, outline the steps to develop one and explain how the programme can benefit a business.

Related: How To Motivate Employees: 18 Steps For Workplace Success

What Is A Reward And Recognition Framework?

Organisations incorporate a reward and recognition framework into their daily practices to encourage and reward staff for their performance and express gratitude for their work. As a result, employers who appreciate their employees have a productive team engaged in the company's development. Reward and recognition programmes can help visualise and define the rewards criteria, aligning the programme with the company's values and determining whether the system works for the employees. Each reward and recognition programme can include three elements:

  • Appreciation: This includes recognising those who do an excellent job for the company, selecting those performing well and identifying how frequently to reward them.

  • Reinforcement: This aids in determining whether the reward and recognition framework is working and motivating employees, and if not, it provides positive feedback to help improve the scheme. It also includes aligning employees with the company's values as part of the reinforcement process.

  • Incentivisation: This includes providing valuable items for recognition and motivating staff to work harder. It is important to clearly outline the criteria for receiving bonuses when deciding how to award incentives.

Benefits Of Rewards And Recognition Frameworks

Employee rewards and recognition can provide a variety of benefits, including:

Improves employee engagement

Employees who believe managers value their contribution are more likely to perform well in their work. While staff appreciate direct leadership recognition, providing additional benefits can help increase their commitment to work and the company. Businesses and HR departments continually strive to innovate and customise bonuses to suit their staff. When a company's employees are content with their work, they are more likely to perform well in the future and inspire others who work alongside them.

Related: Employee Engagement Tools (With Features And Examples)

Boosts staff motivation

Employees often have the motivation to work hard and strive for recognition or reward if they know their company values them. Staff usually know when they can expect a bonus. Some employers may choose to reward employees when they reach a particular milestone. Primarily, most employers inform their employees about the company's reward and recognition system to increase motivation when working on a project or towards achieving a goal.

Employees rarely expect recognition. Because there is no set target for employee recognition, staff usually become thrilled when they receive these public expressions of gratitude at work.

Helps employees understand the role of their contributions

When an employer draws attention to an individual's contributions, it can help the employee understand how their efforts or accomplishments contribute to the overall goals, projects or vision of a company or team. Encouraging employees' innovative ideas and showing that even small contributions can make a significant difference to the company helps motivate and boost their performance. It is important to monitor staff to ensure they understand why their role is relevant and what steps they can take to improve their knowledge.

Reduces staff turnover

Employees who feel valued by their employers are less likely to seek new opportunities. This can aid in improving department or company staff retention rates, potentially lowering recruitment and training costs. To ensure satisfaction among the employees with their current tasks, you can conduct surveys, rotate responsibilities and reward those who achieve above and beyond their job requirements.

Related: How To Develop An Employee Referral Programme (With Tips)

Increases productivity

When employees feel motivated and engaged in their work, both individuals and teams can be more productive. Therefore, companies typically evaluate staff based on their merit and contributions in most employee recognition programmes. Meanwhile, some reward schemes consider employees in relation to one another, which can foster a competitive spirit among colleagues. For example, suppose an employee reward system intends to award a prize to the sales representative with the highest sales quota. In this instance, sales representatives compete to receive the award.

Related: Why Employee Motivation Is Important: A Complete Guide

Helps encourage employees to develop their careers

Employee recognition and rewards programmes can motivate employees to learn new skills, improve existing capabilities, volunteer for additional responsibilities and be more proactive within the organisation. This may aid in developing a self-improvement culture in which staff strive to increase job productivity and advance their careers within an organisation. You can encourage employees to use learning platforms by providing free access and rewarding them with badges and bonuses when they pass a certification exam. Encouraging employees to advance their careers can help them see the benefits of working for an organisation and promotes staff retention.

Related: Types Of Motivation For Career Advancement (With Examples)

Tips For Developing A Reward And Recognition Programme

Here are some tips you can consider when developing a reward and recognition programme:

Make it flexible and scalable

It is important to create a reward and recognition programme that is both flexible and scalable. It is necessary to have an adaptable scheme to accommodate any situation, such as a sudden decrease or increase in staff numbers, the company opening a branch in a different demographic location or a budget reduction for the rewards programme. The team can design a collaborative environment like on-site working models for hybrid or work-from-home working models.

The reward and recognition team can prepare to adapt modifications and quickly change the framework based on what works best for the company at the time, such as a company that has always worked on-site shifting to a work-from-home setting.

Related: How To Develop An Employee Referral Programme (With Tips)

Measure and increase engagement

Employee engagement can assist you in understanding what employees require to perform productively at work. For example, knowing basic staff needs is important if the company has recently transitioned from an on-site to a work-from-home environment. Also, consider the necessity of setting up a home office and internet connection and the cost of fulfilling these requirements for each employee. Finally, a smooth transition benefits the employees and makes them feel optimistic about working for the company.

Implementing these frameworks can help to retain talent while also maintaining costs for the company. It is also necessary to evaluate the scheme's impact and effectiveness after implementation.

Prioritise reward and recognition programmes

While everyone appreciates recognition for their efforts, this alone may not provide enough motivation for staff to continue their hard work and is a primary reason companies have reward and recognition programmes. These frameworks help determine which employees to recognise for their efforts and motivate others to achieve the reward. While these schemes focus on employee rewards, they also help redesign the HR function to find the benefits for employees' well-being and satisfaction.

Related: What Is A Bonus? Definition And Types

Modernise the rewards

It is important to update and modernise the rewards. Revising the framework and HR strategy to meet current requirements allows the company to provide meaningful and worthwhile bonuses to its employees. When recognising someone for their hard work, you can reward them with curated rewards. For example, you can reimburse them with compensatory leave or monetary benefits if they work extra hours. With each recognition, you can award points or vouchers for employees to redeem or donate. This increases the effectiveness of the reward and recognition programme, allowing it to reach more people within the company.

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