Employee Recognition Programs: A Guide for SMB Founders

I’ve been running dslx for 2.5 years now. dslx is a bootstrapped content agency, we have no investors, and everything we’ve ever made goes back into the business.

It started with a month’s salary from my freelance days. I’ve learned a lot in these two+ rapid years in business.

I’ve learned how to operate on a shoestring budget, how to build teams from the ground up, and how to reward those teams creatively. 

Possibly one of the biggest lessons I’ve learned is that a business in its early years is only as strong as its people.

They need to be (and deserve to be) appreciated and valued. If you’re in a similar stage of business to me, despite your industry, this article is for you. 

I’m breaking down successful employee recognition programs for businesses with ten or fewer employees.

Or, for those of you with a large portion of your talent sitting in freelance hubs—which is not so uncommon today. 

But, I’m not stopping at my inputs. I’ve called in some of the experts too so we can all learn from each other, unpicking challenges, providing strategies, tracking success, and closing with a case study.

I’d like to say a huge thank you in advance to everyone who contributed to this piece! 

Let’s get into some alternative employee recognition programs.

Understanding the value of employee recognition

Fun fact: As many as 91% of remote workers think employers should do more to show their appreciation. Let’s flip that number on its head. Only 9% of remote teams believe their employers are positively recognizing them.

But, this trend doesn’t exclusively sit with remote workers.

Nectar found that over 83% of employees feel that recognition affects their motivation at work, and over 77% of employees agreed they’d be more productive if they were positively recognized more frequently. 

The funny thing is, recognition doesn’t need to cost SMB founders an arm and a leg.

Yet, the positive repercussions of implementing employee appreciation can 10x employee morale, engagement, and staff retention; all of which positively impact your bottom line financials.

So, why aren’t more founders investing at least their time into this no-brainer? I asked around…

Common challenges faced by SMB leaders when trying to implement recognition initiatives

Budgets aside, I asked a hub of founders and HR leaders what their blockers were in implementing employee recognition programs.

Here’s what they had to say.

Early-stage start-ups are time-poor

It turns out I wasn’t alone in the struggle. Many of the SMB leaders I spoke to for this article identified being time-poor as one of their biggest struggles in implementing recognition programs. 

It’s not surprising. It’s so easy for us to get caught up in the next hurdle that we don’t pause to celebrate the one we just jumped.

“Our biggest challenge as an early-stage start-up is simply continually carving out the time to be intentional to recognize employees.

When we’re moving fast, the little moments seem less important, but ultimately end up as driving factors for long-term success as a team.”

Parker Gilbert, CEO & Co-founder of Numeric

There’s a failure to educate mid-level management on recognition methods

There also seems to be a large misunderstanding as to what recognition is, who’s responsible for it, and what activities can facilitate it.

I spoke with Erika Migliaccio, (previously) Executive HR Leader at General Electric, and now Founder of Upstream HR Strategies, an HR consulting firm. 

Here’s what Erika had to say:

“Employee engagement is driven by an employee’s relationship with their direct manager. Engagement cannot be addressed with group activities.

A pizza party or an engagement “initiative” won’t move the needle. An HR team cannot–and should not–be responsible for engagement.”

Erika Migliaccio, Founder of Upstream HR Strategies

Erika’s team at Upstream HR has developed a framework they call the Engagement Ladder (LDRR).

They encourage managers that they coach to focus on four things:

• Leadership communication
• Employee Development
• Relationships
• Recognition

In fact, I wrote an article in a similar vein a little while ago for dslx: translating love languages for more authentic workplaces.

In the article, I explain that every employee will have a natural love language (psst. Remember we have lives outside of the office) and a manager’s responsibility is to identify and cater to that love language.

When managers do this successfully, they’re able to incite recognition more authentically and naturally for the employee.

Erika went on to explain that employees want to feel seen, valued, and heard—and they want it daily.

Nectar’s findings back this up.

It’s a manager’s responsibility to create memorable moments in everyday interactions.

Pausing and indulging in the small wins, noticing and calling out an employee for going the extra foot, not always the extra mile.

Erika goes on:

“Focus on teaching leaders how to appreciate others every day. Teach them about the five languages of appreciation.

Reinforce the importance of specific and sincere appreciation. Help them find the right way to say ‘thank you.’“

Founders need to give managers the tools to simplify the recognition process.

For example, a simple app like Greetings of Gratitude can help managers offer specific and sincere thanks—in the moment—even if they’re not naturally good with words of affirmation.

Take a look:

Aligning with some common challenges may help us pick recognition programs and strategies we know our business is in a better position to execute.

Talking of which…

Rethinking traditional recognition programs: innovative approaches tailored for SMBs

Innovative employee appreciation is your winning recipe for employee engagement, retention, productivity, and happiness—¡muy importante!

Ready for what I’ve rustled up for you? Sit up, it’s being served piping hot.

“Time is money” – and it doesn’t cost you a thing

A little clickbaity with my heading, but hopefully I made my point. Time is so precious to everyone.

Time enables us to make more money, or to fill other areas of our lives that we value more than money: spending time with family, spending time on our personal health, engaging in a hobby—I’m taking up crocheting this year!

The clue’s in the wording: we ‘spend’ time. So, how can your business “afford” to gift back time? 

Note: what you gift will be taken away from the impact hours an employee can physically put into their work, although you can counter this by knowing the act of gifting the time back results in more productive contact hours.

At dslx, a few employee recognition rewards we have that revolve around time are: 

• Paid sick leave
• Flexible work hours
• Weekly personal development time
• Paid time off (PTO): increases with each year at the company
• Mental health days: increase with each year at the company
• Volunteering time off (VTO): increases with each year at the company

Peer-to-peer initiatives using alternative resources

Workplace culture is vital in encouraging recognition, and it doesn’t always need to come from an employee’s senior.

One of the most empowering employee recognition initiatives comes from encouraging peer-to-peer recognition and giving teams the confidence and respect to give and appreciate recognition from each other.

I spoke with Connor Ondriska, CEO at SpanishVIP, who’s implemented a similar strategy at his company to navigate budget constraints.

“We introduced a peer-to-peer recognition program where employees could nominate their colleagues for outstanding contributions.

This not only encouraged a culture of appreciation but also minimized financial implications.”

Connor Ondriska, CEO at SpanishVIP

Connor reminded me that just because you don’t have a financial budget, doesn’t mean you don’t have a resource budget.

Make the most of what you have access to—in this case, it’s talent. He explained:

“We leveraged technology by creating a virtual recognition platform where employees could send digital badges and personalized messages to one another.

By utilizing existing resources and embracing innovative approaches, we successfully implemented recognition initiatives while working within our budget limitations.”

I can’t stress the importance of peer-to-peer recognition enough, especially within remote teams.

Loneliness is such a huge battle for many remote employees and a peer-to-peer recognition initiative, like Connor’s, can truly help to combat this drawback of remote work.

Skills development, learning opportunities, and career growth pathways

I’ve relied heavily on data from PromoLeaf for this article and it’s opened my eyes to some interesting employee wants and promising employee recognition initiatives. 

• 37% of survey respondents said that free online training courses are likely to make them feel appreciated at work. 
• Ranked above that were subsidized lunches (43%) and company swag (42%) both of which require a company’s financial investment—although not too great I must add.

Online training and growth opportunities were continuously ranked in the top three across various surveys I looked at when writing this article. 

It makes sense; online training leads to progression, and progression leads to earning a larger salary.

And, a larger salary came out at number one time and time again for what employees wanted to be recognized—but, of course, we knew that already. 

So, how can you invest in your team? How can you provide them with training and development opportunities on a budget?

Here are a few things we’ve implemented at dslx, or that I’ve seen work at previous companies: 

• Adopting tutor mindsets: instigate a tutor mindset among your management. This eradicates feedback for the sake of delivering work and encourages feedback for the sake of continuous learning and development. At dslx, we don’t just edit to correct, we edit to educate.
• Masterclasses with outsourced talent: we’ve had a couple of successful masterclasses from talent we’ve outsourced. These masterclasses are not the freelancer’s core product, but we pay them to share their knowledge with the team for an hour. It typically results in alternative and insightful learning methods and strengthens relationships with our freelance team.  
• Subscription-based course hubs: there are plenty and they’re not too pricey either. LinkedIn, Udemy, Unschool, Coursera, and Skillshare are all good places to start.
• Freelance consultants: when in doubt, hire the experts. Freelance consultants that specialize in your team’s pain point are often much more affordable than you’d think.
• Cross-team training: each member of the dslx team excels in their own way. I often request that one team member teach the rest of us how they do a task so well. Peer-to-peer learning uplifts your team’s confidence while sharing valuable knowledge.

Gamify your recognition initiatives

Gamification strategies do wonders for engagement. There’s no wonder apps like Duo Lingo have such fantastic user retention rates.

Borrowing gamification techniques can do wonders for your employee engagement metrics while positively contributing to employee recognition. 

Verity Gough, Communications Manager at MyStaffShop, shares how they’ve managed to riddle elements of gamification into their employee recognition program.

“We have a recognition system called Fanclub which allows us to send personalized messages to colleagues who we would like to recognize for a particular reason: great work, extra effort, that kind of thing. 

It gives the employee a real lift when they receive one. Knowing that you are being recognized by your peers or managers really does go a long way to motivate and engage our team. 

We can see how many people are using this, how regularly, and who is more engaged in using it than others. This serves as a yardstick to measure how staff are performing in general and it is something of a litmus test for the culture in general.”

Verity Gough, Communications Manager at MyStaffShop

Platforms are not the only way to gamify employee recognition. Perhaps it’s something like ringing an office bell, a pinboard, an awards ceremony at an afterworks—think out of the box and keep it fun!

Use alternative, yet familiar, recognition platforms

With the above being said, I know that it can be complicated for young businesses to commit to new software.

Whether that’s for dollars or time, implementing new tech will cost you in both and sometimes we just can’t afford it. 

Don’t be afraid to use the platforms that your team is already using.

Consider platforms like: 

• Slack or Teams channels 
• Internal company newsletters
• Even private company social media accounts: Facebook groups, Instagram channels, etc

You’re either already paying for the platforms, or they’re free, and your team is already familiar with them; meaning no time is lost on onboarding, just a focus on implementing a new practice and building recognition habits.

Hand over the mic: try employee-led initiatives

Last, but certainly not least, if you’re ever stuck in a rut on ideas, or unsure what your employees want from your recognition program, then hand the mic over to them! 

Erika from Upstream HR explains that one of the most important things you can do to drive engagement is to give employees a voice; show them that their thoughts, their ideas, and their opinions matter.

She tells us:

“At GE Energy, I led an initiative called ‘Walk in My Shoes.’ We empowered every employee to identify a process in their daily work that was painful—something that didn’t make a lot of sense and could be simplified. 

Then, they invited their manager to sit with them for an hour and observe that process. Managers were asked to collect their employees’ ideas and sponsor projects to simplify the most cumbersome processes.”

-Erika

Within a few weeks, the GE Energy team had hundreds of simplification projects in a database and an equal number of excited employees who finally felt “heard.” 

Managers were equally excited to have a line of sight to complexity they didn’t know was plaguing their employees.

Erika goes on:

“The halls were buzzing with hope and lined with cut-out paper footprints that served as “trophies” for those whose processes were selected by their managers.”

Empowering teams to create and drive recognition initiatives that are seen, heard, and acted upon by leadership are perfect employee morale boosters.

Plus, you can bag a few operational wins along the way if you take a leaf out of Erika’s book!

How to evaluate your recognition program: understanding key metrics to determine success

Creative staff acknowledgment and its success boils down to whether you can track it, understand its shortcomings, and adapt.

Let’s look at two things you need to keep in mind for successfully tracking your new program. 

Learn from continuous employee feedback centered around unique goals

One of the feedback collection methods I can’t stress enough is that it’s continuous.

Don’t wait until the end of the quarter—or worse, the year—to understand if your recognition program is flying or failing. 

Erika shares how they measure the success of their recognition app: Greetings of Gratitude and other company initiatives.

“Employee engagement survey questions and retention metrics are the best measures. Stay away from generic engagement questions and ask specific questions that gauge progress on the drivers of engagement and recognition.”

-Erika

Keep in mind that your surveys or more informal questions can’t be cookie-cutter recipes.

Narrow down on questions that specifically correlate with your business, culture, and the goals you’re trying to achieve with your program. 

Rather than sharing questions, let me share some goals you can shoot for—build your questions from there. 

• Decreased sick days
• Higher quality of work  
• Decreased staff churn
• Increased engagement 
• Increased collaboration 
• Decreased staff disputes 
• Increased active attendance 
• Increased satisfaction at work (think: NPS Survey, but for employees) 

Some of these goals will be harder to track than others, it’s up to you to identify questions that will help you gauge their success.

And, more importantly, gather this feedback regularly—and act upon it!

Gather a blend of quantitative and qualitative data

Building off of the above idea of continuous tracking, you’ll need a blend of quantitative and qualitative data to truly understand the success of your campaign.

Just because someone says they’re happier may not necessarily mean they are. Response bias is rife in the workplace, employees may be influenced by:

• Demand bias: wanting to help the survey garner the results they know it’s looking for 
• Social desirability bias: wanting themselves or their team to be perceived positively via their response

A blend of both types of data sets will help you dispel response bias as much as possible.

I spoke to Connor Ondriska, CEO at SpanishVIP to understand how he gathers this data blend. 

Quantitatively: Connor’s team tracks key performance indicators such as employee retention rates, productivity levels, and employee satisfaction scores. These indicators often show a positive correlation with effective recognition practices. 

Qualitatively: the team conducts regular surveys and feedback sessions to gather employees’ perspectives on the impact of recognition initiatives. This helps them identify unexpected outcomes and understand the specific aspects of recognition that resonate most with their team—or don’t!

Connor explains:

“One valuable metric that emerged during our evaluations was the increase in cross-departmental collaboration and teamwork.

Recognizing employees for collaborative efforts led to improved communication, knowledge sharing, and a stronger sense of unity within the organization.”

-Connor

Now you know some initiatives to try and how to track them, let’s throw a case study in for good measure.

How Orange Line successfully implements employee recognition

David Klein, co-founder of Orange Line, a global digital marketing agency, has successfully implemented a rather unconventional employee recognition initiative.

We took the time to speak with David to understand the business’s journey. 

1. Hi, David! Can you share an instance where an unconventional form of recognition significantly impacted your employees’ motivation and engagement? 

David: “Sure! One of the less conventional methods that we use daily for employee recognition is via a points rewards system that is connected to our real-time communications channel. 

Every team member has a certain number of points that they can allocate to other team members each month. We have set up several categories to choose from which makes it easy for people to reward points when they see certain behaviors (for example diligence and growth).

This has been a fantastic practice as our team is constantly thinking about ways that we can recognize each other’s efforts.”

2. Amazing. Can you tell us the challenges your business faced in implementing this points reward system, and how you overcame them?

David: “It’s one thing to set up a system, it’s another thing to put it into practice and regularly use it the way it was intended to be. It’s compliance rather than budget which I’d say is the main obstacle. 

Aligning all key stakeholders to help bring everyone on the journey has been a critical part of our process.”

3. Onboarding any new process can always prove tricky—even if it’s a fun one. In what ways have you measured the success of your employee recognition program? 

David: “We measure the success of the program in a more direct way, via program usage statistics and our employee heartbeat surveys. More indirectly, we measure the success of our programs by retention rates.”

The program has been extremely well adopted by David’s team. Over 75% of the team has used it to award points to others within the last two months.

Here’s a screenshot from their behind-the-scenes.

4. Thanks for sharing your story with us, David. Any parting words you’d like to share?

David: “Recognition comes in many forms at Orange Line. It is essential to us that each team member feels valued.”

It’s time to start recognizing those employees!

We made it! Thanks for bearing with me on this one. It’s a huge topic and one that I hope to make more accessible for those budget- or time-short startups out there.

Remember, a business (especially in its earliest years) is only as strong as its workforce. 

People > Products.  

When you start to recognize talent more regularly, and in a way that feels authentic and natural to everyone involved, you create a grateful, collaborative, and happy workplace culture that will reward your business—and all of its people—ten times over.

The last thing I need to do? Recognize you. Thank you for showing up, for reading, and for investing in a future filled with happy workplaces.

Have a great day.