Abstract: As artificial intelligence transforms industries, employee recognition practices are evolving beyond traditional methods to meet the needs of a digitally native workforce. This article synthesizes research on effective recognition strategies while examining how AI can enhance these practices through data-driven insights and personalization. It highlights AI's capacity to identify achievements in real-time and tailor recognition to individual preferences, while acknowledging challenges related to fairness, transparency, and the essential role of human judgment. Drawing on empirical evidence and case studies from technology and healthcare sectors, the article provides practical frameworks for HR leaders to implement AI-powered recognition systems that maintain appropriate human oversight, address algorithmic bias through diverse teams, and provide transparency into decision processes. Organizations that successfully balance technological capabilities with meaningful human involvement can achieve significant improvements in employee satisfaction, motivation, and retention while creating recognition practices that scale effectively in the age of AI.