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Employee recognition is vital for performance-oriented companies that look for mobilizing all employees and stakeholders, prominently dealers and distributors, in the direction of clear business objectives ascertained by sales, profits, customer satisfaction, and productivity. Such performance driven companies need to regularly communicate and strengthen their dynamic aims. Nevertheless, recognition for such organizations goes beyond the conventional character of service awards. In spite of the fact that recognition and incentive seem interchangeable, the two terms should not be confused with one another. While the recognition includes all the means that draw attention to employees who perform, the incentives usually employ discerning means to persuade people to accomplish a particular objective like increasing sales. Recognition can be impromptu, indeed to the level that there is no ceremonial announcement that the organization has a recognition program, while the incentives are well known so as to build enthusiasm through material reward. The true beauty of the recognition programs based on performance is their nature of surprise that is in contrast to service-award programs that make necessary ceremonies holding on a routine basis. In this way the employees would be much more interested in performing better rather than just concentrating on the reward 101 things to do when your bored book.

Employee recognition domain has become to gain recognition among organizations as they begin to judge the impact of downsizing on long-term productivity, profits, and the quality of products and services. Previously, employee recognition meant service awards, wherein recognition of their service years in a company people got an intensifying series of awards accompanying a mention in the employee newsletter, while staying until retirement, they might get a gold watch. From time to time, companies expanded these programs to comprise recognition for diverse actions like superlative customer service; nevertheless often these were limited to rewarding nature.

In the present era, no one just simply depends on the incentives and reward system, rather in a downsized company; employees would ridicule a service award if there were one. Thus, with more understanding of the employees' needs, companies are becoming more proactive when it comes to the employee recognition. While the effective recognition include activities like day-to-day, informal, and formal. For example, commendation is an illustration of day-to-day recognition that costs nothing and can be given by any person, to anyone anytime. While the form of informal recognition can take a diversity of forms, it has certain limitations and oftentimes contains a low-cost, material beckoning of appreciation or congratulations, the formal recognition includes awards for achievements, service, etc., and the celebration episodes at which all contributing employees take part and get recognition. However, a formal recognition customarily has inevitable policy and legal requirements.

In "1001 Ways to Reward Employees" and the "1001 Ways to Energize Employees", Bob Nelson and suggests the significance of awards and recognition and the reason that they are essential tool of employee motivation, team building and productivity. According to Nelson, the American organizations did not always identify or accept this, as for a much longer time corporate America thought that high salaries, cash bonuses and good employee benefits were all that was needed to motivate their employees. While these factors do in an effective way provide a form of short-term motivation, however, much research finding points out that money is not an effective long-term motivational tool. Before 1954, what termed corporate motivation was the formula of Frederick W. Taylor that encapsulates that money was the primary motivator for all performance. Contrary to this scientific management formula, in the Hierarchy of Needs Abraham Maslow in 1950's denied this scientific management and originated that individuals were not machines as they in truth have various levels of motivational contentment that need to be appeased to a certain degree. Form this theory it becomes apparent that contentment on top of that degree could be better consummated by using other less expensive and increasingly effectual forms of reward.

In the 1995 issue of "Employee Relations Today", Professor Kenneth Kovach reported that his most recent research proved the two most referred to factors of motivation by employees were not salary and benefits, but more or less, an interesting job and recognition for doing that job well. Frederick Herzberg also identified this importance of recognition by the employer in his finding that employee accomplishment and recognition are two motivating factors inherent to the job environment. Furthermore, he asserted that the job satisfaction is contingent on these factors over and above anything. Thus a well planned recognition program can, lessen turnover, assist in retaining competent people and elevate pride and loyalty in the company, which not only improves performance but also brings about positive attitudes and raise a productive and perpetual work environment.

The programs that are meant to serve the purpose of recognizing employees' efforts must be designed in a manner that not just satisfies the importance of employees' recognition, but also take into consideration the workforce diversity. Another thing is the involvement of the employees in this program downright the grassroots level. Once designed, it is the responsibility of the management to evaluate the existing program and make changes whenever and wherever feasible. Giving lapel pins or corporate logo jewelry where the employees already possess them would not create much of the sensation or motivation. Kovach (1995) accentuates that there definitely is a gap that exists between employee needs and employer's understanding of those needs. This gap is widened as the management overlooks the differences in corporate culture and the consequent contrariety in personal tastes evident in distinct departments within an organization or at dormitories strewn across expansively "different demographic, psychographic and geographic areas". Current research corroborates that a selection "program targeted at the employee's lifestyle is the most appreciated and cost effective approach. The awards should be something that the employee wants, needs and will use and cherish. It should be something special to the recipient. People never forget who gave them something of personal value, nor do they ever forget why it was given.

The problem is that many recognition programs do not offer awards that employees really want. There is no validity in benchmarking the most popular items in most existing programs because the selections are often obsolete. The most expensive award you can give someone is something they didn't want in the first place, have no use for and will not use" (Nicastro, 2002). Accordingly, Nicastro (2002) further researches in to the subject and narrates that the things that are considered practically accepted with today's employees are "electronics, fashion jewelry, brand name timepieces and watches, collectibles, sporting goods and lifestyle targeted gifts. The most appreciated awards are items that the recipient would like to own, but has not or can not justify buying for themselves". Nicastro (2002) further investigates that in a study of 3000 service recognition programs, it was found out that the awards that are most adored are when they are given on or near the employee's employment anniversary date. The study also revealed that the "most common complaints by employees is that their anniversary came and went without any recognition. Whenever possible awards should be presented in front of peers, with someone from administration, who is known, recognized and respected making the presentation. This does not mean you need to have an awards banquet; a small departmental ceremony with cake and coffee can be just as effective. Recognize the achievement, talk about the recipients accomplishments, contributions to the company and a short work related anecdote. Make the recipient and the accomplishment special. It's the timeliness, the respect and the special recognition that makes a lasting impression".

In the article, "Consultant Dispels Myths About Award Programs", Bob Nelson (2001) further elucidates most of recognition programs are outmoded. This Nelson references to the 10-year national study, the Independent National Study of Recognition Policies and Practices, by Perspectives Resources, Inc. This study finds out that the outmoded factors of recognition de motivates rather than motivates the employees as they no longer meet the employees needs and the corporate objectives. "Companies are spending more than $500 million annually on service award programs that don't work," says Edward L. Ford, recognition consultant, "and minor changes will not address the problems. At the same time, with all the downsizing and change taking place in business today, recognition is more important to the morale of employees than ever. It is imperative that companies take a fresh look at what constitutes effective recognition -- including what the needs of the award recipient are." Giving insights in to the less important award program as compared to reward program, Nelson assets that organizations are haunted by myths that were prevalent in 60's and 70's. The first one that he points out is that "Logo emblems of gold and diamonds make the best award". Where for the myth he gives that the "Corporate emblems are outdated, and 95.8 percent of employees would rather have practical merchandise items as awards".