The Pros and Cons of Employee Recognition Programs: Can a Business Make Rewards Work?

The Pros and Cons of Employee Recognition Programs: Can a Business Make Rewards Work?
Page content

Why Employee Recognition?

Discussing the pros and cons of employee recognition programs inevitably draws the question whether these setups are antiquated. Modern job descriptions outline in minute details the employer’s expectations. Employee handbooks list the disciplinary processes for workers failing to perform in accordance with their stated job descriptions. Is there really a need for employee rewards programs? The short answer is a resounding ‘yes.’

Recognizing efforts and superior accomplishments alike serve to motivate the workforce. An absence of disciplinary action is insufficient to motivate workers to consistently perform at their highest levels or maintain newly achieved levels of performance. Employee recognition programs provide the formal ‘pat on the back’ for a job well done.

When Good Employee Recognition Goes Bad

On the flip-side of this theoretical purpose is the practical application that sometimes fails to meet the spirit of these recognition programs. For example, there are employee-of-the-month awards that follow a predictable path down the employee roster. Too many bottom-line oriented managers and company owners rely on these recognition programs to keep workers happy.

This is a clear sign that inadequate staff retention policies are in place. Moreover, the periodic award of employee recognition or rewards is not an adequate replacement for hands-on management, constructive but positive feedback, frequent evaluations and competitive fiscal remuneration.

Advantages and Disadvantages

The overall success or failure of a recognition program is determined by the way it is structured and administered.


  • Employee recognition schemes reward workers who advance the business’ goals. This opens the door to rewards for hard work, creativity, loss prevention, and initiative by workers at all levels.
  • A business-wide nomination process keeps the playing field level.
  • Leveled employee rewards offer recognition for various forms of worker excellence.


  • Management selection of employees leads to allegations (or actual cases) of favoritism. An employee nomination system may lead to the creation of discord and factions within the workforce. This problem may be made worse if family members, dating or married couples work together.
  • Limiting recognition of an employee to only one occurrence per calendar year stifles the continued willingness of the worker to excel.
  • HR World(1) explains that a lack of funds makes an employee rewards program unproductive. For example, a worker who just invented a way to prevent thousands of dollars worth of warehouse shrinkage should get more than merely a computer-generated certificate and a mug with the corporate logo.

At the end of the day, the discussion over the pros and cons of employee recognition programs likely determines whether a company will implement anything at all or simply stick with the occasional verbal praise from supervisors and managers. It is noteworthy that not having an employee reward program is better than keeping in place a poorly run or inadequately funded one.



Photo credit: “Mug icon” by Iconshock/Wikimedia Commons at

This post is part of the series: Ins and Outs of Employee Recognition Programs

In this series of articles, we explore how to develop an employee recognition program that really works. Get great ideas and advice – and also learn what to avoid.

  1. Understanding the Pros and Cons of Employee Recognition Programs
  2. Recognize Employees With These 10 Creative Ideas
  3. A Simple Letter Goes a Long Way: Employee Recognition Tips
  4. Counterproductive Employee Recognition Programs: What Not to Do
  5. Employee Recognition and Reward Ideas That Won’t Break Your Budget