“Employee recognition? I want to do that but I can’t afford it!” Declared my favourite client. And he’s not alone.

“I can’t afford it!” seems to be the perennial lament of so many small business owners, especially if the required spending  is not for inventory or some other aspect of your operations.

But there are actually some other things you should want to afford, especially if they concern your employees.

For example, recognising the exceptional performance of your employees, even if you only have just one, is one of those things you should do.

After all, at the end of the day, it is your staff that keeps your business going and keeps your customers coming back, again and again.

And you shouldn’t underestimate the remarkable power recognising and rewarding employees have to motivate those very employees. In some cases, it even inspire them to do the best work of their careers.

Furthermore, recognising your employees is one of those common sense things that inevitably takes your business to new levels of success.

But before we go any further, let me be clear about something.

This is not about how you pay your employees or develop your payroll. As a matter of fact, it assumes that you know how to do this.

However, just in case you would like some help with that, here’s a great post about  paying employees in a small business  you will find very useful.

Definition of employee recognition

Let’s define “employee recognition” in a simple, straightforward way.

It’s a means, or even a system, by which you publicly show your employees that you recognize and appreciate their outstanding performances, beyond the minimal accepted standards.

Remember,  it’s important that you include everyone in the programme.

It’s also important that you establish clear criteria and set meaningful targets and share these with everyone.

Benefits of having some form of employee recognition

One of your key business and leadership functions, is to rapidly scale your business.

A big part of this, is how you attract good employees and motivate them to remain in your business while maintaining their high performance.

As a way to help you achieve this, recognising and rewarding your employees have some very desirable benefits. 

1.  Recognizing the exceptional performance of your employees creates what I call a “performance loop.” By this I mean that when you reward high performance, the awardees want to do even better. When they do better, they are rewarded even further, thus creating the “performance loop.”

2.  It improves your bottom line because it creates a culture which encourages high productivity.

3.  It helps you to keep your best employees who might otherwise leave for greener pastures.

4.  It forces you to upgrade your own performance game and demonstrate your leadership influence.

5.  It improves your hiring process because you learn how to spot high performers easily.

6.  Employee recognition is also a great team building tool, when you have a system in which employees are encouraged to recognize each other.

7.  If you implement a cost-effective award system, the benefits will far outweigh the cost.

How to establish your employee recognition system

If you do not already have a system, I hope I have stirred your interest enough that you’re ready to implement one.

If this is the case, you will easily come up with WHAT you want to recognize and reward. However, where you will have a challenge is with the “HOW.”

It is at that point you will be looking for some type of guidance, or system or structure to help you achieve your goal quickly and safely.

So here is a graphic that list those steps for you: 

10 ways to keep employee recognition simple and affordable 

As a Small Business Owner, you simply don’t have the means to offer the cushy rewards of your “big business colleagues.”

So finding simple and affordable ways to recognise your employees is always a challenge. But don’t worry…I’ll help you with that in this section.

To get you up and running fast, here are 10 simple and affordable ways which you can use to recognize and award your employees.  

Just choose any which are relevant to your business and employees, and fits in your budget. 

1.  Personalize the rewards to suit the receivers

Once you have established a budget and the required criteria, you can now give meaning to the reward by matching it to the receiver.

How would that work?

Let’s say you have budgeted $100 for an award for an employee who maintains perfect attendance for 6 months. And let’s say that 3 employees qualify for that award.

Instead of giving a generic gift voucher, you would give the “DIYer” a voucher for a hardware store. The Fashionista would get hers for her favourite boutique and the dog lover would receive his for his go-to pet shop.

Now, to pull this off effectively, you have to get to know your employees as human beings, beyond the professional requirements of their jobs.

2.  Include a “Featured Employee” section on your website

On your website’s homepage, create a section for a “featured employee” or “employee of the month.” This is a great way to shine a spotlight on your high-achieving employees.

Be sure to include some personal information about the employee such as they hobbies or community involvement. Here’s some help on how to do it.

When you recognise your employees in this way, it has the additional benefit of letting your existing and potential customers know that “real” people work for you.

And there’s more good news for you.

The featured employee will be busy telling everyone they know about the page. This will increase the traffic to your site and if you manage it well, customers for your business as well.

Please note that this can work for your social media pages as well.

3.  Issue PTO certificates as recognition awards

Everyone appreciates an extra day off, so offering a day of PTO (Paid Time Off) as an employee recognition award, is sure to be welcomed.

A great way to do this is to issue employee with PTO certificates which they can present to you whenever they choose. The only condition you should attach to this is a number of days’ notice.

When this is combined with a personal, hand-written “thank you” note from you, this award is the bomb!

4.  Create an employee recognition VIP parking award

Reward a top performer with the best parking spot in the lot for a month or two, complete with a parking sign denoting the special spot.

There is something about this award that makes the receiver feel incredibly special, especially if parking for your business is limited and or difficult.

I know because my son’s grandmother was recognised for her long service to the business in this way. She was ever so proud of this award and other employees could not wait to get theirs.  

And another thing, here’s a really good way to add even more value to this award. Include a car washing service which washes the car a fixed number of times, right on the spot.

5.  Create a Long-term employee personalized “yearbook”

Employees who remain with your small business over the long term are very special. They would have contributed significantly to your business and must be recognized for this.

One of the best ways to do this is to create a yearbook documenting their journey by featuring their notable achievements and milestones.

In highlighting these, make sure you also emphasize their importance to the growth of your business.

Your next step is to hold a small ceremony and present this yearbook to the employee in front of their colleagues.

It’s a great, personal way to recognize an employee’s years of hard work.

6.  Implement peer recognition awards

When you allow your staff to recognize each other for jobs well done, this goes a long way in making employees feel that their contribution matters.

It also helps with team building, facilitating camaraderie and good interpersonal relations among team members.

This in turn can improve communication, increase overall productivity and reduce operations cost.

Let the employees decide what form the award should take, your only input being the amount you can put in the budget for this.

In addition, make space in specific team meetings for the employee recognition to take place.

7.  Establish an employee recognition drop box

This is a variation of #6 above.

In this instance, you provide a drop box where all employees can drop in cards recognizing their peers for jobs well done.

These cards are then read at the next team meeting so that those recognized can be celebrated.

This is just another simple and affordable way to make sure that hard work is recognized, since it can be hard for you to be aware of everything.

8.  Donate to a charity on the Awardee’s behalf

If any of your awardees support a favourite charity, you can donate some money to that charity on their behalf.

You can either match their donations or you can donate an amount that the business can afford. 

You can also support either of these methods with a PTO day or two off so that they can volunteer time in addition to money.

Make sure you present these awards at a team meeting or some similar event arranged for that purpose.

9.  Allow employee to choose their “Employee Recognition” award

This is a variation of #1.

You can do this without breaking the bank and you can also make it competitive and fun.

Decide on a variety of items you want to offer for this award but make sure they are about the same price.

Another thing you must do is to ensure that those taking part are aware of the criteria and the items.

Then allow the awardees to choose the item that matters most to them from the list. Offer things like gift cards, movie or game tickets, PTO days or free lunches.

To make it fun and competitive, tell them that the only guarantee that they can get the item they want is to achieve the targets in the shortest possible time.

If you set this up right, you can use it to achieve some meaningful business targets in a very short time.

10.  Implement a system of trophies or plaques

Giving employees a physical trophy or a plaque is a familiar and affordable way to recognize good work.

You can give individual trophies or team trophies depending on the size of your business.

You can also have an employee of the month plaque with 12 name plates, one for each winner.

To encourage consistently high performance, display this plaque in a prominent position in your business.

Your next “employee recognition” step

By now you will realise that the possibilities and opportunities for recognising your employees are limited only by your imagination.

You also will realise that doing so allows you to be successful while genuinely caring for your staff.

And guess what?

You can begin immediately because I have given you enough for you to make a quick and easy start. So here’s what your next step should be:

1.  Decide how much you can spend on employee recognition awards annually. Be realistic.

2.  Decide on the criteria for recognition. These could be tangible targets or desirable behaviours

3.  Look at the list of possibilities I shared above, select and implement just 3 that can work for you.

There you have it! A reward system and the potential for happy and long term employees.

To your simple, successful and affordable employee recognition programme…