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Getting a mug with the company logo on it probably isn't enough to keep an unhappy employee from quitting. But small tokens of recognition presented with the right message and style can make employees feel appreciated, while at the same time underscoring a company's values.

"Small recognition programs have remarkable power when done correctly," notes Alan G. Robinson, professor of finance at the Isenberg School of Management at the University of Massachusetts-Amherst. Robinson recently co-authored Ideas Are Free (Berrett-Koehler Publishers, 2004), a book highlighting successful businesses that use nonmonetary recognition to reward employees who come up with innovative ideas. "Really powerful recognition has to do with the feeling and energy behind it, not the cost."

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One key to building good recognition programs is to focus more on how and why employees are singled out. "Recognition is an action, not an item," says Lynne Eskil, an HR specialist with recognition responsibilities for aerospace giant Boeing's engineering group in Puget Sound, Wash.

At a Toyota plant that Robinson visited in India, walls and machinery were "festooned with stickers" to indicate where employees had suggested innovative ideas. The stickers were inexpensive and distinctive, and included the name of the suggester on each one. Those stickers served as their own reward for employees, Robinson says, because employees could walk by the visual reminders, point and say, "That's my idea."

Beware the Form Letter

One mistake companies make with recognition programs is creating a one-size-fits-all solution that aspires to the lowest common denominator. A personal, individual touch, on the other hand, can go a long way.

"One quick thank-you note on your manager's stationery is worth a whole lot more than a cup and a T-shirt with a form letter," observes Robinson.

"I've had people tell me they were insulted by large cash bonuses in the way they were delivered, and others tell me that a single act of consideration on the part of their manager has kept them motivated and engaged in their position" for years, says rewards guru Bob Nelson, president of San Diego-based Nelson Motivation Inc. and author of several best-selling rewards and recognition books.

Nelson conducted a survey assessing the employee recognition practices most valued by 750 employees across various industries and found that those ranked at the top involved no cost at all, with several of the top 10 involving praise rather than perks or gifts. The No. 1 most important recognition from a manager was support and involvement, followed by personal praise and then autonomy and authority. Cash and other monetary awards came in at No. 10.

That's not to say that small items or privileges have no place in recognition. But employers should take care to "tie them to performance and deliver them in a timely, sincere and specific way," says Nelson.

Recognition as Strategy

For years, recognition has been viewed as a "nice thing to do." But companies now are thinking of recognition more strategically, with programs closely aligned to their business goals, says Greg Boswell, director of performance recognition at O.C. Tanner Co., a recognition services firm in Salt Lake City with numerous Fortune 500 clients.

Boswell, past president of the National Association for Employee Recognition (NAER) in Naperville, Ill., cites data from a study released last fall by NAER and WorldatWork, the Scottsdale, Ariz.-based compensation association. The study found that of surveyed companies with recognition programs, 65 percent have a written strategy for the programs. Of those, 97 percent indicated that the recognition strategy is aligned with their organizational strategy and is linked directly to what matters most to their organizations.

When a recognition program is used in connection with a key business strategy or priority, such as improving customer service, increasing workplace safety or boosting innovation, the program provides an additional tool for communicating and emphasizing that goal with employees, Boswell says.

At AFLAC, the Columbus, Ga.-based insurance company, recognition programs are designed to reinforce a "strong sense of family" that is the company's culture, says Sharon Douglas, AFLAC's chief people officer. The founders' philosophy was to "treat people as you would like to be treated," she says, based on the conclusion that "if you treat the employees well, they will take care of the business."

AFLAC recognizes all employees' birthdays with a card and present they can select through a vendor.

AFLAC's employee appreciation week serves as a focal point for recognition and rewards, and includes family-friendly events. "It's just a big rah-rah time," says Douglas.

On the first Saturday of employee appreciation week, AFLAC rents a multiscreen movie theater, which makes viewing of family-oriented movies available free to the company's 4,000 employees on a first-come, first-served basis.

Later in the week, in addition to free breakfasts, random drawings for prizes and other activities, all employees are invited to bring their families to AFLAC celebrations at one of three locations of their choosing: an amusement park, nature facility or petting zoo. Employees also receive a souvenir, such as a picnic basket, at the end of the week.

In addition to employee appreciation week, AFLAC sponsors other recognition programs that Douglas describes as hybrid because they comprise multiple components. The programs include cash rewards for innovative ideas, with the top three winners honored at the end of employee appreciation week. Also, throughout the year, division heads are encouraged to reward employees who perform "above and beyond the call of duty." The rewards can include stock options, cash or time off.

At T. Rowe Price, the Spotlight on Excellence program also underscores the company's values, says Cathy Plakatoris, vice president for recruiting, retention and development at the Baltimore-based financial services company. In addition to a spontaneous, on-the-spot program for a specific achievement, which includes handwritten and electronic thank-you messages, T. Rowe Price uses a more formal recognition program to focus on employees who in the long run do work that embodies principles that the company wants to emphasize. Peers or managers are encouraged to nominate employees whose work demonstrates teamwork, service, leadership, integrity or initiative.

In addition to supporting T. Rowe Price's strategic goals, the recognition program is designed to "continue to improve associate satisfaction and morale," says Plakatoris. "Recognition really is very important to the associates. They have a lot of fun" with the programs, which include celebrations.

For some companies, recognition also is about employee visibility. Employers hope that employees who see someone getting kudos will aspire to achieve similarly so they too can be recognized, with the employer benefiting from all the achievements.

But not everyone gets a kick out of being seen parking in the employee of the month space; the personal touch remains a key factor in how recognition is perceived by employees. Experts suggest that managers or peers carefully consider the way in which each employee would appreciate being recognized.

"As a rule of thumb, public recognition is desired by most employees--but not all," says Nelson. "It would be wrong to give an employee public recognition when he didn't want that and was embarrassed by it." A manager who knows his employees well should have a handle on how to recognize them in a way that is appreciated by each individual, whether it be in a meeting with a client, in a hallway among co-workers or privately.

"Good recognition really does require managers to become better managers," says Robinson. Implementing recognition programs requires time and thought, "which implies a commitment on the part of management."

Some employers emphasize the importance of the recognition program to managers by providing training up-front and then assessing how much recognition is going on through the annual evaluation process. At T. Rowe Price, recognition is built in to the supervisor training curricula. "We make sure people understand the value of recognizing staff," says Plakatoris.

Boeing emphasizes spontaneity and the personal touch in its Pride@Boeing program. The company has a spot recognition, "instant awards" program that is simple and accessible to peers and managers alike, says Eskil, head administrator of the recognition and service awards program for the company's 10,000-employee engineering group in Puget Sound.