As the economy recovers, employers are looking for innovative ways to drive positive results through rewarding and recognizing their employees.

High-performance companies understand the importance of offering awards and incentives that recognize, validate and value outstanding work.

They keep employees motivated and are effective methods of reinforcing company expectations and goals, especially in times when merit budgets are low (or even frozen), promotions are rare, health premiums are on the rise and overall job satisfaction is low.

A global workforce study conducted by Towers Perrin (now Towers Watson) surveyed 90,000 employees in 18 countries about a number of topics, including what drives engagement.

The financial results of 50 multinational companies were compared. The companies with high employee engagement posted a 19% increase in operating income and a 28% increase in earnings per share.

Conversely, those with poor employee engagement scores saw operating income decline by nearly one-third and earnings per share drop 11%.

The study concluded that a 15% improvement in engagement will cause a 2% improvement in a firm's operating margin. These are powerful statistics. It's no wonder that companies are designing their reward and recognition programs with the specific purpose of driving engagement.

Programs that work

Here are some examples of what companies are doing to enhance their reward and recognition programs.

Amgen, a drug company in the biotechnology industry, has 17,000 employees in North America, Europe, Asia, Australia and the Middle East. Forty-four percent of employee awards handed out are for work in cross-functional teams.

There are five tiers - from e-mail-based thank you messages that any employee can issue to any other, to an award with substantial value with winners selected by senior executives. This is a Web-based program available in seven languages.

Eighty-five percent of employees have either nominated a co-worker or received an award themselves. Amgen's goal is to have 5% to 8% of employees nominated for an award on a weekly basis.

Research conducted by Globoforce, Intuit and Stanford Graduate School of Business reports that 5% to 8% of a workforce per week being recognized or nominated for recognition is the tipping point between a forgettable recognition program and one that becomes strategic and part of the fabric of the company.

Applied Materials, manufacturers of technology that help produce semiconductor chips and flat panel displays, offers a peer-to-peer recognition program using prepaid MasterCard cards.

Employees can nominate each other for awards. E-mail notifications are then sent to the managers for approval, and once approved, a MasterCard prepaid card is mailed to the recipient.

Financial services company Edward Jones implemented the "Good Idea" program where employees can participate to win a one-week, all-expense-paid trip for two if they suggest a good idea. The award is based on the originality of the idea, potential impact and whether it can be implemented. Edward Jones also offers a recruiting recognition award which includes a gift if someone recruits a new hire.

Peer recognition

Dow Chemical created Recogntion@Dow, a global program that rewards high performance across geographic and cultural boundaries. It's a Web-based peer recognition program using gift certificates redeemable at merchants such as Amazon.com and Macy's.

All leaders are actively engaged and encourage the program's use. Marketing is done through the website, newsletters and management training. All awards must be for a specific action taken and nominators must explain how that action advances one of Dow's four strategic plan goals.

The monetary value of the award is in the winner's local currency and is adjusted to ensure that it has the same buying power in every country.

Avnet, a computer parts distributor, uses a Web-based, peer-to-peer recognition program that lets employees send thank-you messages to other employees.

Managers give out gift cards in nominal amounts (around $100). Also, rewards are given for manager and employee recognition, years of service, sales incentives and employee of the month.

The keys to a successful reward and recognition program include commitment and support by senior management, clearly defined goals and objectives, effective promotion with consistent communications, appropriate incentives and rewards based on your employee demographics and staying current on industry trends and noncash-award tax laws and regulations.

Follow EBN on: Twitter | Facebook | LinkedIn | Podcasts