For years, we told teams to launch recognition first and add rewards a few months later. The thinking was simple: build a habit of gratitude before anything tangible comes into play.
Then we studied eight years of behavior from 5,000+ teams using HeyTaco, with researchers from the University of Waterloo, the University of Illinois, and the Wisconsin School of Business. The data changed our advice.
What the research says about timing
Teams with rewards enabled saw 80% more recognition activity and were 481% more likely to adopt peer recognition company-wide. The researchers found no evidence that companies should hold back rewards until they establish a recognition program.
Design mattered more than timing. Rewards that stayed fresh and felt like appreciation kept programs going. Rewards that felt like payment didn't.
"It's not the presence of rewards that causes problems. It's how those rewards are framed." —Dr. Ewelina Forker, Wisconsin School of Business
Why rewards can backfire (and how to avoid it)
The old worry is real: rewards can make recognition feel transactional. But the cause is framing, not timing. A gift card for every 25 thank-yous feels like a vending machine whether you launch it in month one or month six.
Rewards support recognition when they are:
- Distinct from pay. They should feel like a special thank-you, not part of compensation.
- Personal or experiential. An afternoon off or lunch with a leader carries more meaning than cash.
- Refreshed often. Rotating options keeps interest high and avoids the "same old prizes" slump.
How to launch rewards alongside recognition
- Start small. Launch with three to five rewards and grow from there. Teams in our study averaged eight.
- Lead with non-monetary and team rewards. Extra time off, team lunches, and collaborative rewards like Tacos for Charity keep the focus on community.
- Price for early wins. Make a few rewards reachable within the first month so people see the program is real.
- Frame it as celebration. Announce rewards as a way to celebrate each other, not as points for prizes.
- Watch the data and adjust. Use reporting to see how much recognition is flowing and what people redeem. Think of your rewards as a pop-up store: try a few options, keep what works, rotate the rest.
For the full playbook, see how to build an employee rewards program.
Does HeyTaco work without rewards?
Yes. Plenty of teams never add rewards, and recognition is meaningful on its own. Leaderboards, levels, and Taco Tags make giving recognition fun, and public appreciation becomes its own reward.
Rewards aren't required. But if you plan to offer them, there's no reason to wait.
When waiting still makes sense
Launching recognition first is fine if you have a practical reason: budget isn't approved yet, or leadership hasn't agreed on what to offer. Just don't wait for an arbitrary "habit" milestone. The data doesn't support it.
Bottom line: Celebrate, don't incentivize
Add rewards whenever you're ready, including on day one. Keep them small, personal, and fresh, and frame them as a celebration of your culture. Do that, and rewards amplify recognition instead of replacing it.
Adding rewards to a recognition program FAQ
Should you launch rewards at the same time as recognition? You can. In HeyTaco data from 5,000+ teams, teams with rewards enabled saw 80% more recognition activity and were 481% more likely to adopt peer recognition company-wide. There's no evidence that waiting helps.
What are some examples of rewards and recognition? Recognition is specific, honest appreciation given often. Rewards are occasional extras, like flexible scheduling, a team lunch, or a gift card.
What type of rewards do employees actually want? Choice, personalization, and experiences. Experiences can be simple, like extra PTO or a fitness class. Curate your options to fit your team's culture.
What's the biggest mistake companies make when adding employee rewards? Making them feel transactional: cash-only rewards, thresholds that feel out of reach, or rewards tied only to top performers. A manager who never says thank you but suddenly hands out gift cards won't improve the culture.
Should remote and hybrid employees get different rewards? The rewards can be the same, but delivery may differ. Mail tangible rewards like swag and handwritten cards, and make sure remote employees get the same public recognition as everyone else.
