Employee Recognition Mistakes Companies Make — and How to Fix Them

Most companies will say they care about employee recognition. Far fewer have programs that genuinely make people feel recognized.

I’ve spent most of my career in the gift card and rewards industry, where I’ve held several leadership positions. I’ve seen first-hand what makes employee recognition work—and what doesn’t. And I’ve made some mistakes that too many companies are still making.

Here’s what companies get wrong about employee recognition and rewards, along with some better approaches I’ve learned along the way.

Employee recognition mistake #1: assuming everyone wants the same kind of recognition

Early in my career, I made the mistake a lot of leaders make: I assumed that if I liked something, everyone liked it.

For example, I don’t enjoy receiving public recognition. In fact, I shy away from it.

So I mistakenly assumed that no one else liked public recognition, either—until I found out that some people on my team were suffering because they didn’t feel recognized by me or the company. I even had employees ask me if they were doing something wrong, when in fact they were doing everything right.

It took me a while to realize that people are fundamentally different from each other. Our brains are wired differently. We respond to different things. Learning and accepting that fact has been a journey.

Employee recognition is a deeply personal experience because we all have unique preferences. Some people need more intrinsic signals, like autonomy and trust, while others really value public recognition. Others still may be more motivated by a reward they can show off to their friends and family.

None of these forms of recognition are inherently better or worse, but you have to know what matters to each person. And you need a variety of tools at your disposal if you want to cultivate meaningful employee appreciation.

Mistake #2: Treating employee recognition as a one-off initiative

I see too many businesses treating recognition like a one-off initiative. They launch a program, run it for a quarter (or maybe just send out a few corporate holiday gifts), and call it a day.

I personally haven’t seen this one-off approach to employee rewards be very successful.

What I have seen work is identifying your goal first. Then you break that goal into smaller, measurable things you can tackle one by one.

Say you want your employees to be more engaged at work. That’s a pretty broad goal. So before you get started, you need to figure out what engagement actually looks like for your team.

For me, there are some more fundamental questions underneath all of this: How are you valuing your employees, and do they know they’re valued?

And if you can’t answer these questions, no initiative is going to solve your recognition problem.

Mistake #3: Treating recognition as HR’s job alone

Whenever possible, I recommend letting team leads and managers handle recognition. They’re the ones on the ground with their people, so they’re in the best position to know what they want and need.

But it shouldn’t stop there, at the front line.

Do those managers feel recognized by their managers? Do directors feel recognized by the executive team? At the executive level, are they above recognizing or being recognized, or are they pushing all this work to HR?

You need to think through all these areas if you really want to build a culture of recognition.

Mistake #4: Adding unnecessary restrictions to recognition

It’s when we get down to employee recognition budgets that I really break with how most companies do things. I think too many are too restrictive and try to maintain too much control over how rewards are distributed. A ‘thank-you’ should be simple and timely, not a whole process with red tape and rubber stamping.

For example, a manager might simply want to give someone a $25 gift card for stepping up during a particularly busy week, but they have to submit a request to HR and wait however long for approval.

From a control perspective, I understand why all that matters. But I would love for the executive, compliance, and finance teams to butt out of the process a little bit. Too much oversight can turn what should be a delightful experience into something cold and emotionless.

In my experience, when you set too many rules, restrictions, and hoops to jump through, you’re adding so much friction to the process that departments rarely even hit their recognition budgets, let alone go over. At the end of the day, the controls meant to stop overspending end up stopping recognition.

I’d rather see companies take all this friction out.

If someone’s abusing the system, obviously you can deal with that. But the easier and more natural you make recognition, the more human it feels and the more impact it has.

That’s the idea behind our Team Accounts at Giftbit. Managers can send rewards on their own, while Finance keeps visibility and control over spending. It’s a simple way to let managers stay autonomous and keep an evergreen recognition system flowing, without losing centralized control over budgets and permissions.

Mistake #5: Waiting too long to recognize good work

Finally, recognition works best when it happens close to the moment. I’ve seen this personally countless times, but research from the Incentive Research Foundation also backs me up. Specifically, they found that among employees who felt their recognition was genuine, 69% said it was delivered promptly. Among those who felt their recognition was insincere, only 19% received it in a timely manner..

Think about that manager who wanted to give an employee a $25 gift card to thank them for stepping up during a busy week. Now imagine that the employee doesn’t get that gift card until several weeks later. Is it going to feel like genuine appreciation, or like an afterthought? Is it going to feel connected to what they did to earn it?

That’s a big part of why I’m such a proponent of digital gift cards. Being able to send someone a quick thank-you from your phone, and have them get their gift in seconds, really boosts the whole program. You don’t have to wait for some merch to arrive in the mail before you can deliver it. And you don’t have to send someone over to HR to pick out a gift card from the manager’s desk, either.

The reward isn’t the point on its own, though. It’s a way to back up genuine appreciation, so it works best alongside everything else we’re talking about.

Use employee rewards to reinforce genuine appreciation

And remember that recognition should be fun! People should feel good both giving recognition and receiving it. It should be easy and hassle-free to send gifts and rewards and redeem them.

When companies try to centralize and control employee recognition, they often end up with overly restrictive policies. It’s better to democratize the program.

So open up recognition to as many different kinds of use cases as possible. Then trust your team to recognize and reward each other for what’s really valuable.

That’s really what all of this comes down to. Know your people, make recognition easy, and trust them.

If you’re building a program or rethinking the one you have, our guide to employee rewards is a good place to start. I’d also encourage you to book some time with our sales team if you’d like to chat through the possibilities for your organization.