Using reward and recognition
Feeling appreciated and valued motivates performance and promotes wellbeing. Here are some ways to recognise and reward people, from simple informal acknowledgement through to formal systems of reward and recognition.
Part of the Creating an environment that supports thriving module.
Why are reward and recognition important?
Workplaces that reward and recognise their people tend to enjoy lower turnover and greater engagement and wellbeing among staff, as well as higher customer satisfaction. Reward and recognition can also improve productivity and wellbeing.
Rewards may include praise or recognition, gratitude, pay, esteem and career opportunities such as promotions.
Research shows an imbalance between effort and reward is a risk factor for poor mental health. It can also negatively impact physical health; being in a ‘high cost–low gain’ environment is linked with depression, coronary heart disease and reduced immune function.
How to design reward and recognition programs
Reward and recognition programs should align with your organisation’s goals and values. Co-designing them with workers also ensures they are perceived as appropriate, fair and valued. Here are some ways your organisation can reward and recognise effort:
- Express appreciation – Regularly and genuinely thank people for their work.
- Provide regular positive feedback – Tell people specifically what you liked about how they did something.
- Acknowledge teamwork – Acknowledge and reward everyone who contributed to a good outcome.
- Consider rewarding people for outstanding work or achievements – Rewards can include giftcards, a written acknowledgement/certificate/award, peer recognition, celebrations, etc. Rewarding a diversity of success and effort can help avoid perceptions of favouritism.
- Ensure fair pay and benefits – Pay people the correct award rates and pay them on time. Any schemes for bonuses, profit sharing, paid time off, fringe benefits etc. must be transparent and procedurally fair.
Reward and recognition starts with thanking people for a job well done. Any formal system of recognition and reward must be transparent and fair.
How to build manager capability
Managers may need training to carry out worker appreciation, recognition and reward activities such as giving effective feedback and praise.
Here are some key areas of focus for managers:
- understanding the importance of reward and recognition and how it can affect the organisation’s bottom line
- helping workers understand how their performance affects the organisation's goals and success
- explaining the organisation’s approach for managing and rewarding individual and team performance
- learning ways to motivate and support good performance
- delivering sincere and timely appreciation and praise.
Don’t assume managers automatically know how to offer praise and give effective feedback. They need training to carry out worker appreciation, recognition and reward activities.
Ensuring people feel appreciated, rewarded and recognised for their work promotes mental health and wellbeing. Using strengths-based approaches to design work and provide feedback can also demonstrate how your organisation values people for their contributions.