Employee Rewards and Recognition: The Definition, Differences, and Advantages

Employee rewards and recognition are major elements that can motivate employees. In most organisations, these two factors are included in the employee’s journey. It can establish a long-term relationship between management and the employees. Employees find it easier to work harder when they feel as if they matter.


Employee rewards and recognition are not only beneficial for the employees, but for the organisation as it plays a key role in an employee’s retention rate and the reputation of the organisation.

Rewards are a token of appreciation, mostly materialistic or monetary, given to employees to acknowledge their work or performance. These rewards can be goal-based, time-based, or in some instances, even task-based. Rewards are always tangible.

Recognition is the word of encouragement that is always given as an acknowledgement. Unlike rewards, recognition need not be given based on goals or tasks. A manager, superior, or even a colleague can genuinely appreciate a fellow worker for the work they do. It can be minimal or a big achievement, but timely recognition plays an important role in an employee’s work cycle.


Differences Between Employee Rewards and Recognition

Rewards and recognition are a part of employee benefits, but they are two distinct ways of appreciation. Recognition is important and without an appreciation of how to recognise your employees well, you’re going to struggle to provide a great workforce experience. What are the two ways? How are they related? Rewards are tangible and may vary, while recognition is not concrete, rather it is positive feedback that can be given in a variety of ways.

Rewards can be more generally called benefits. There are rewards given to an employee as a way of saying “this is important to me.” This may include cash, gifts, discounts, or non-monetary benefits. Recognition is the praise, honour, or deference paid to someone, where something is given to someone as context for action or achievement.

Recognition is all about a person, who may offer one small or large award for something he/she has done. Work responses for recognition are positive, which is an action or event that an employee can do to complement the supervisor. They can be in exchange for higher pay, promotions, awards, opportunities, or just favorable comments. It is important to note that employees may anticipate a reward from their supervisor and crave it more than receiving recognition.

Finally, the pressure of getting a reward or recognition is an incentive used to make employees do what they don’t want to do. They perform certain tasks and activities better when they are under pressure. Top management must learn more about human emotions, which emotions are related to people and organisations, and emotional intelligence. As more and more organisations adopt emotionally intelligent thinking, the strategy will likely become more important, especially in a multicultural world. Emotional intelligence is the ability to identify your emotions, understand other’s emotions, and then choose the right way to deal with them.


Advantages of Having an Employee Rewards and Recognition Program

Every program that is owned by an organisation comes with a set of advantages where rewards and recognition have a significant impact. Some of the advantages of having an employee reward and recognition program are listed below.



Employee Happiness

Employee happiness refers to the mental state of being content and happy at work. Employee recognition and rewards programs can help to enhance this emotional state. They can utilise positive reinforcement to offset any negative sentiments they may have as a result of the nature of their work. These programs are also advantageous since they provide employees with a sense of commitment to their employer. This sense of commitment is critical for employee retention and motivation, which is essential for productivity.


A Higher Retention Rate

A higher retention rate is possible due to consistency in rewarding and meeting goals in the workplace. It can encourage good behaviour and reward those who are already good workers. It is also labour-intensive, so it can provide job satisfaction to the employees who participate. It can introduce a sense of belonging, which can provide higher levels of motivation to help employees focus on long-term benefits.


A Positive Work Culture

Positive work culture is demonstrated when the workplace culture fosters a feeling of mutual appreciation and respect among the employees. An organisation that offers rewards and recognition for its employees has created a positive work culture that can be reflected in the positive moods and feelings of joy within the workplace.


Attracts New Candidates

An organisation attracts new candidates when it has healthy and structured rewards and recognition programs. The program can build a positive work culture. It can also induce employee happiness and help build a healthy work environment. Organisations that can maintain high retention rates provide a higher level of competency, creativity, and loyalty. Ultimately, effective rewards and recognition programs strengthen customer satisfaction and productivity.


Builds Trust

The rewards and recognition program can also help the organisation build trust and positive work culture. It is also important for the organisation to partake in this program for a better retention rate and employee happiness. Most employers provide their employees with monetary rewards, such as cash-based bonus programs, company stipends, and overtime pay. You can always structure the program so that the employee can benefit from it. By making it shareable with their family and friends.

When it comes to recognizing the employees, personnel who receive a timely word of motivation and encouragement tend to perform better. The sense of acknowledgment received by the employee can build trust and a rapport between the superior and subordinate.



Employee rewards and recognition are not a new concept and have been established practices in businesses for many years. The considerations of these practices vary greatly for each company, and for each individual. Those who work for a business may choose to implement an employee reward and recognition program because it can increase employee happiness and trust between coworkers and managers. Some may choose to implement employee rewards and recognition programs because it increases the quality, retention, and volume of staff they can bring in.

Some may choose to implement employee rewards and recognition programs because it lowers employee turnover, increases customer satisfaction, showcases employee accomplishments, and helps to enhance their internal brand. Most of all, the decision to implement employee rewards and recognition programs is a calculated, smart decision that can have many benefits for a company.


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