Reviewing Your Rewards and Recognition Program
Budgeting season is upon us. With October now here, many companies review budgets and see where improvements can be made and monies can be allocated. This goes for reviewing rewards and recognition programs as well.
Decision makers and program administrators have to decide whether to keep their current program, put it up for review, or implement something new altogether.
If this sounds familiar, you are not alone. Most companies want to do best by their employees and maintain their bottom lines. Below are some questions I’ve received when speaking with clients about their search for the right recognition program.
Vic Sawi, Next Level’s Director of Client Services works on the implementation and review of their recognition programs to ensure they are effective and relevant. He is on the front lines of business development and answers the questions below as our in-house expert.
Q: What are some trends that you are seeing that should be considered when reviewing your recognition program?
A: The question itself actually is a big trend – more and more companies have decided to review their recognition programs. For many, it might be the first time these programs have been reviewed since they were created. Even for mature companies, they may not have reviewed their recognition programs in 5 or even 10 years.
There are a few primary factors that are triggering the renewed focus. First, companies are seeing a change in their employee demographic as more Millennials make up a larger percentage of the workforce.
Many of our clients are considering the potential impact or changes that this demographic shift may bring to their organization.
Second, due to lower unemployment, employees may have other employment options. Once again, companies need to attract new employees and retain their existing talent at the same time.
Strong recognition programs can be beneficial in achieving both goals.
Q: How much time should be planned for a successful implementation? What should my timeline look like?
A: Thanks to our experience and technology, we’re able to implement a new program in 12 weeks or less, once agreements are executed. The scope of the project and client’s internal timelines typically dictate when a program will launch. During the implementation process, we work with each client on their branding guidelines, program communications, data transfer, and testing any technology.
Q: How much are other companies spending on recognition and how much should be budgeted?
A: As a general benchmark, a company will spend between 1%-2% of their payroll towards their recognition programs.
How these funds are distributed by the type of recognition will vary by company and even industry. You can find some guidelines here
. Regarding Peer-to-Peer recognition, the majority of companies do not provide monetary values for these type of awards.
Q: From your experience, any other recommendations for reviewing a recognition program?
A: First, determine which programs fall under “recognition” versus “compensation”. If you’re having difficulty understanding which category a program falls under, so will your employees.
Recognition programs should be programs where employees do not rely on them to pay their basic bills (rent, mortgage, car payments, etc). Most employees are told not to discuss their compensation, but you want employees to discuss their recognition awards to help reinforce program throughout the company.
Second, we’re proud to be your partner and will work with you to administer, communicate and fulfill awards for your recognition program. But you’ll need to have an internal champion for these programs, too. You can have the best recognition program in the world, but if no employees know or utilize the program, results will be less than desired. To maximize the impact of your recognition programs, we will work with your team to tailor your program to ensure it considers your specific culture and environment.
Think About the Big Picture
Whether your boss is asking you to look at the holes in your current program, you notice that your retention is declining, or you don’t have a recognition program at all--it’s important to consider budget, timeline, and be aware of the changes that are happening in the recognition space. After all, recognition is essential to engage your workforce!