Study Highlights Challenges and Opportunities in Rewards and Recognition Programs

The HR.com Research Institute's latest study, 'HR.com's State of Rewards and Recognition 2025', reveals a pressing issue within the human resources sector: while the benefits of effective rewards and recognition (R&R) programs are widely acknowledged, many organizations struggle to implement them successfully. The study identifies five key benefits of such programs, including making employees feel valued, enhancing the overall employee experience, improving attitudes and behaviors, boosting well-being, and increasing both individual and organizational performance. Despite these advantages, significant hurdles remain, such as the absence of measurable performance goals, inadequate managerial training, inconsistent application of programs, lack of transparency, and poor communication.

High-performing organizations, however, showcase a markedly different approach to R&R initiatives. These organizations are significantly more likely to incorporate charitable donations as rewards, measure the impact of R&R programs through employee performance metrics, and regularly review the effectiveness of these programs. This disparity highlights the potential for other organizations to learn from these high performers and adapt their strategies accordingly.

Technology emerges as a pivotal factor in the evolution of R&R strategies. A substantial portion of surveyed organizations plan to enhance their tracking and reporting of R&R activities and employ analytics for deeper insights. Artificial intelligence (AI) is particularly promising, with expectations for its use in personalizing recognition at scale, aligning candidate and employer values, and tracking performance trends for more timely recognition. Debbie McGrath, Chief Instigator and CEO at HR.com, underscores the necessity for HR teams to adopt smarter tools, such as automation and AI, to develop more consistent, impactful, and scalable employee appreciation programs.

This research underscores the urgent need for organizations to rethink their approach to rewards and recognition. By leveraging technological advancements and adopting data-driven strategies, companies can overcome existing barriers and create more meaningful and effective employee experiences. The implications of this study are profound, not only for HR professionals but for the broader business community, as it highlights the critical role of R&R programs in fostering a positive workplace culture and driving organizational success.