Top 10 ways to reward and recognize employees

Positive gossip

Praise employees for a job well-done in front of others when they are not around, knowing this indirect praise will get back to them. For some employees, indirect recognition is the most credible because its done without any expectation in return. It essentially says: My boss must have thought what I did was important to have brought it up to the entire management team!

Encourage employees to recognize their colleagues

Employees Spectrum Chemicals & Laboratory Products can give anyone else a written note of thanks that includes a $25 gift certificate for Trader Joes or a restaurant of their choice. Most often, the person offering the thanks personally presents the note and certificate to the honoree in front of the sales department. For more on peer-to-peer recognition, read E-vites, e-cards e-rewards?

Have fun

First Chicago Bank gives out Felix and Oscar awards for the employees with the neatest and messiest work areas. Another company, Oregon Cascade Plumbing and Heating, regularly hosts contests and awards a Kermit the Frog statue to whomever has the best-decorated office, for example, or ugliest shirt.

Write a letter

Write a letter of praise to employees to recognize their specific contributions and accomplishments; send a copy to your boss or higher managers and to the personnel department. Or, provide managers with specially printed packets of thank-you cards to hand out to employees who do exceptional work.

Build teams

At one station of Southwest Airlines the Star of the Quarter honoree gets to invite a group of people to a lunch or dinner featuring a menu of his or her choice. The station managers do all the shopping, preparation and serving for the event. Instead of being a burden, the recognition initiative has become a team-building activity as managers work together. This is one reason its more difficult to get a job at Southwest Airlines than to get into Harvard University (based on the percentage of accepted applicants).

Give company stock

Whether you reward employees with shares of company stock as part of a promotion or recognition for completing a major project this perk will pay the company back in the end. At Lowes Companies, where employees own 25% of the company, productivity is 200% to 300% above the industry average and employee theft is less than one-sixth of the average. Also consider providing stock matching and workshops on overall investment strategies.

Offer big rewards for big ideas

IBMs suggestion program gives $50 to $150,000 for money-saving ideas or suggestions that enhance health, safety or customer service. If the idea leads to measurable savings, the company rewards the employee 25% of the first years net material and labor savings. For awards of more than $200, the employee also receives 25% of projected net savings for the second year, up to $150,000. And ideas that spur intangible benefits dont go unrecognized: they usually range between $50 and $100 with the same $150,000 maximum. Recently, IBM gave out eight $150,000 rewards out of 153,000 ideas submitted by its 223,000 U.S. employees.

Acknowledge suggestions at little cost

Not all companies have as large a budget for rewards as IBM, so Dr. Nelson suggests publicly posting the Best Suggestion of the Week including the suggesters name. Another alternative is to publish every suggestion the company has implemented either online or in print along with who submitted it and the result. He advocates responding to every employee suggestion within a day of submission and having the CEO personally respond may make an even bigger impression.