Why Traditional Employee Recognition Programs are Broken and How to Fix Them

July 24, 2012 - 3 minute read - Posted by

Employee recognition programs have been around for a long time and there is no doubt that employees who feel recognized are happier, more productive, more engaged, and less likely to leave your company. However, traditional employee recognition programs have limitations associated with them that make them less effective and sometimes demotivating. In this post we will look at some of these limitations and how you can avoid them in your organization.

As workplaces are becoming more democratic, less hierarchical, and more agile, traditional employee recognition programs have become less effective and broken. This is similar to how traditional 360-feedback has stopped working. Here are three limitations of traditional employee recognition programs in modern workplaces and how to overcome them.

  • Controlling and Not DemocraticTraditional employee recognition programs are driven by management. This means that recognized employees are chosen by management based on their judgments without taking into account the opinion of other employees. This can become demotivating as some employees who are not recognized may feel the system is unfair or biased. Also, recognized employees may feel manipulated, overpowered, and controlled since the recognition decision is coming top-down.

    To avoid this problem, everyone in the company (both managers and employees) must participate in choosing the employees that must be recognized with equal votes.

  • Creating an Us vs Them CultureIn traditional employee recognition programs, management does not participate in the program and they merely choose lower level employees to be recognized. This is demotivating and disempowering as it creates a culture where there is separation between managers and non-management employees.

    To avoid this problem, management and company leaders must also be part of the recognition program, and employees should be able to recognize their managers or the company CEO when it’s deserved. By enabling recognition to go in both directions of the org-chart, it creates an inclusive and transparent culture where people feel they are on the same ship.


  • Discontinuous and too late:Traditional employee recognition programs are discontinuous, and employees have to wait (often for long periods) for a staff meeting or a town hall to get recognized. This makes the employee recognition less effective, which is also why traditional performance reviews are not so effective.

    To overcome this problem, make sure the recognition is given as soon as it is deserved. Even if you are going to announce the recognition at a gathering, this doesn’t mean that you cannot also give recognition now when it has the most impact.

With the great number of Generation Y entering the workforce, revising your employee recognition program is becoming even more important as Gen Ys demand transparency, inclusiveness, and rapid feedback. Good luck!

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