Formal Recognition

Formal Recognition

Employee recognition stands at the forefront of the methods you can use to enhance employee retention and productivity. Employees will gradually lose interest in the company if they don’t think their work is being recognized. 

There are two ways employee recognition can be deployed: formal and informal employee recognition. 

In this article, let’s look at what formal recognition is and how an organization can develop a full-fledged formal employee recognition program for maximum benefits.

What is Formal Employee Recognition?

Formal recognition is when an HR or someone from higher management recognizes an employee’s efforts and rewards them for it. It can also be when an employee is awarded after reaching a certain company goal, work target, or milestone in their career. 

Formal recognition is a centralized program, meaning it has a definite structure and is managed by people from the organization. 

Examples of Behaviors that Might Trigger Formal Recognition

Here are some examples of when formal employee recognition can be used to appreciate employees:

  • Work anniversary milestone. This is when an employee is recognized for working
  • Improvising an existing work process significantly increases the workers’ profitability and efficiency.
  • Demonstrating the company’s core values and driving company culture.

Difference Between Formal and Informal Recognition

Formal Recognition Informal Recognition
It is organized and has a specific structure.
It is not organized and has no specific structure.
It has several rules and criteria that need to be met to get the reward.
It is spontaneous and unplanned.
Rewards are given by the company, usually team leaders or higher-ups.
It is usually done among the employees.
The aim of this program is to encourage employees to perform better for the company’s growth.
The aim is to promote a positive workplace and emphasize that positive behaviors will be recognized.

Steps to Develop a Formal Recognition Program

1) Be realistic

Companies should be realistic about the goals they set for their employees. They can’t set targets that are too hard to reach in a specific time. This will only demotivate the employees.

They can set clear, attainable goals like increasing sales, improving performance targets, improving customer services, etc.

2) Think about program structure and design

This is an important aspect of formal recognition. The programs companies decide for their employees should be structured and have a clear idea of why they recognize their employees.

3) Promote your rewards scheme effectively

Any rewards scheme won’t be successful if the employees are not properly informed about it. Communication between the employees and the HR or higher officials is very important to achieve the scheme’s goals.

4) Continue to manage your program

The rewards program should be regularly analyzed for its effectiveness and impact on the employee’s performance. Companies can also get feedback from employees and try improvising it. 

Companies should be ready to adapt the criteria and expectations of the program according to the employee’s needs. 

5) Share your success

Companies can share the news across other departments if a rewards program has been successful in its implementation and got positive feedback from employees. 

This can drive employee participation in the following schemes and also make them aware that the company prioritizes their hard-working employees. 

Formal Employee Recognition Examples

Launching a Values Awards program

Apart from giving spot rewards for an achievement, you can also launch formal Value Awards Programs. This kind of employee recognition reinforces the behaviors that are consistent with your company’s culture while also making recipients feel seen, recognized, and valued.

You can reward employees regularly (e.g., quarterly or annually) in a formal Company Values Awards program. This is a formal recognition because a central committee, typically the company’s HR department and/or executive team, evaluates the nominations and chooses the winners.

Celebrating employee anniversaries

Work anniversaries are a great opportunity to celebrate and appreciate employees who have stayed with the company and played a part in its growth. This also signifies that you acknowledge the employee’s work and dedication to the company. 

Celebrating employee anniversaries is also a great way to promote employee retention. No one will want to leave a company that appreciates and acknowledges them. This can be a great way to show others that their hard work will not go unrecognized.

Hosting an annual President’s Club

Annual President’s Clubs evaluate and reward employees based on their annual performance. These clubs are generally geared towards the best performers of a specific department.

Mostly these awards are for outstanding employees from the sales department, like sales reps, sales leaders, etc. Some companies also conduct these clubs for employees from growth-related departments too. 


Whether it is an MNC or a small startup, recognition is key to retaining employees and encouraging them to perform better. Formal recognition is a great way to officially recognize employees and show that their efforts are recognized by the company.

If companies can’t do the programs by themselves, they can use employee recognition software that can provide them with a clear idea and structure for effective employee recognition.

Frequently Asked Questions

1. What is formal recognition?

Formal recognition is a structured program with specified methods and criteria that are tied to the values and goals of an organization. There will be a nomination and selection process to choose the best performers. These employees are then publicly acknowledged at an awards event.

2. What are some examples of formal recognition?

Quarterly or annual company awards like employee of the month, employee of the year, and celebrating work anniversaries are some forms of formal recognition.

3. What are formal and informal recognition?

Informal recognition might be as basic as a note or a verbal “thank you.” It is different from formal recognition, which involves rewards such as gifts, money, and certificates. 

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