BlogEmployee Rewards and Employee Recognition: What’s the Difference?

Employee Rewards and Employee Recognition: What’s the Difference?

22 August, 2022

Employee Rewards and Employee Recognition: What’s the Difference?

While offering competitive pay is a crucial part of talent acquisition, recruitment, and retention; a transactional paycheck alone does not suffice. Proactive HR leaders now understand that adequate compensation accompanied by a well-rounded rewards and recognition program with ample employee engagement initiatives is what paves the way to a holistic employee experience.

Although, more often than not, the terms ‘rewards’ and ‘recognition’ are used interchangeably, which can be a conundrum when it comes to designing your own R&R framework. For instance, a common question that may arise is- when is a reward appropriate and when is recognition the way to go? Thus, in order to optimize your strategy, it is imperative to de-couple these two terms and identify their key distinctions. Read on for a deeper insight!

Importance of Employee Recognition

Broadly, employee recognition programs entail a different purpose altogether; they are intended to provide a psychological boost by directing appreciation and praise rather than acknowledging an accomplishment with a physical reward. From a behavioral psychology viewpoint, the human brain craves and thrives on being recognized. It stimulates the hypothalamus (the part of our brain that controls our metabolism and stress levels) and increases dopamine production (the chemical that causes happiness) that leads to enhanced productivity and motivation. Here are a few key differentiators that can reaffirm the essence of employee recognition as a whole, self-serving ensemble in your overall employee engagement strategy-

1. Employee recognition is intangible in nature but amounts to a great value in the recipient’s mind.

2. It is a relational exchange between the employee and the recognizer, due to which it has the ability to influence and nurture workplace relationships.

3. Recognizing an employee does not need to be outcome-driven; behavioral or value-based attributes are also worthy of being appreciated with a simple thank-you note or a personal message.

4. Appraising good work can happen frequently and in the moment, which means the time lag between the deed and its’ acknowledgement is significantly reduced, thus maximizing its’ impact.

5. Employee recognition is inexpensive.

Furthermore, with digital employee recognition platforms that allow instantaneous, on-the-go recognition along with a 360-degree mechanism of manager-to-employee and peer-to-peer recognition, sky is the limit! Read more about the importance and benefits of employee recognition programs.

Importance of Employee Rewards

The benefits of rewards can be easily understood through gamification, or applying gaming principles to non-gaming environments. A primary focus of gaming is rewarding and incentivizing the user, so they experience a sense of accomplishment for engaging in certain actions. A similar environment can be created through a digital R&R platform, where employees receive monetary rewards or other incentives for their work accomplishments.

Read about the psychological underpinnings of winning tangible rewards in our blog on the ‘human drive to acquire’ Below are some defining features of employee rewards-

1. Rewards are tangible in nature and usually come in the form of physical products, merchandize, digital gift cards, or cash payouts.

2. Rewards are usually used to reinforce desirable outcomes, such as when someone hits a specific revenue goal or designated sales target.

3. An employee rewards program involves a prudent use of resources, but also generates significant RoI in the form of enhanced productivity and performance.

4. Offering self-selection of rewards empowers employees with the freedom of choice, thus escalating its’ value.

It is important to remember that having a robust employee rewards program helps in attracting top talent, while free-flowing recognition can prove to be instrumental in fostering retention and loyalty. Digitizing your employee rewards framework can help in establishing a salient link between the two, in the form of reward points that can be offered along with a digital recognition. Read more about designing the perfect employee rewards catalog.

Design a Tasteful Mix of Recognition and Rewards to Reap the Best Results!

Although most elements in a rewards and recognition program are similar, it is useful to keep the above distinctions in mind and know when to use which, especially when organizations wish to provide a cutting-edge employee experience while keeping costs low.

Now that the key differential aspects of Rewards & Recognition have been defined, the next stage in your strategy could be as simple as scheduling a demo of our digital R&R platform. Get in touch with us today!

Leave your comment

Your email address will not be published. Required fields are marked *


12 April, 2024

Optimizing Employee Engagement through Work-Life Balance: An HR’s Guide

“Work is a rubber ball. If you drop it, it will bounce back. The other four balls—family, health, friends,...

5 April, 2024

Mental Health at the Workplace: Psychological safety and belonging 

One of the greatest transformations in modern workplaces has been brought about by the hybrid work model. With many...

28 March, 2024

Top Ways to Increase Employee Engagement

In the era of measuring and strategizing new ways to increase employee engagement, HR leaders can sometimes forget the...

22 March, 2024

Strategies to Enhance Employee Engagement at the Workplace 

“Highly engaged employees make the customer experience. Disengaged employees break it.” Timothy R. Clark   Employee engagement is a vast...

20 March, 2024

Creating True Wellness: 5 Fresh Ideas for Employee Wellbeing Activities

“When employees are happy, they are your very best ambassadors.” James Sinegal In today’s day and age, employee wellness...