subject: A Quick Overview Of Your Companies Reward And Recognition Programs [print this page] Do you have a reward and recognition program in place? Ben Thompson, an expert in the benefits of such programs, discusses why every business should implement one.
1. While Australia has emerged relatively well from the GFC, many HR professionals are still watching their budgets closely. Do you find you are asked about return on investment statistics when it comes to implementing a reward and recognition program?
Definitely, the majority of businesses looking to introduce or improve an employee reward and recognition program are interested in the ROI. In order to help HR professionals establish ROI, a program should have a three step implementation process including pre-launch performance benchmarking and ongoing performance reviews.
The best programs give businesses the opportunity to measure their ROI at a granular level which they have never experienced before. For example, businesses should be able to view and report, at a business unit level, which peer groups and managers have been recognising exceptional performance, what that performance was and the extent to which each employee is engaged in the program.
2. Is it a myth that reward and recognition programs need to be costly, with extravagant rewards? How important is the recognition element (e.g. a public thank you) in terms of engagement and retention?
The reason I established a program in Australia was because I could not find a reward and recognition program that cost less than $50,000 to set up. I wanted to place reward and recognition programs within reach of every Australian business and do something about Australias lower than average employee engagement levels. *Research by Gallup shows that less than 20 percent of Australian employees are engaged with 80 percent being not engaged or disengaged.
Behaviour is a function of its consequences. When people feel that their efforts are recognised and appreciated through positive reinforcement, their behaviours change and they become more engaged. Extravagant rewards are not the key to engagement, recognition is. Matching social recognition with a tangible reward just increases the utility of positive reinforcement in the longer term.
3. What sort of financial ROI stats are important to consider when it comes to a reward and recognition program?
The first is the percentages of the total spend that is ultimately received by the employees. The higher the set up costs, management fee and cost of rewards, the lower the value received by employees. Similarly programs that use gift cards and vouchers as rewards may experience non redemption or expiry (breakage) of up to 40%.
The second criteria is the specific target metrics particular to each business for example recruitment costs, training costs, on time production, sales, referrals, customer satisfaction, ideas or innovation. What is relevant in a call centre is not necessarily relevant for an airline but a clear set of benchmarking KPIs and objectives should be established up front to enable ROI assessment across the reward and recognition program.
4. Looking beyond the financials, how else might you measure the success (or otherwise) of a reward and recognition program e.g. take-up rates, engagement levels?
Typical benchmarking metrics are employee engagement scores, employee turnover, recruitment costs and program member activity such as award nomination frequency, log-in frequency, training units completed, sales metric submissions and reward redemption.
I find that many clients connect the demonstrated behaviour of their business core values with reward and recognition. Often these core values appear on the company website, brochure and mouse mat but there is no recognition of the fact that employees try to live and breathe these values in their day to day interaction with peers and customers. Once core values are converted into actual examples of behaviour then, where appropriate, these behaviours can be recognised and rewarded.
5. Is it important to have some idea of an end goal in sight i.e. why you are rewarding someone in the first place, especially if its not related directly to something concrete like sales targets (e.g. it might be to reduce errors, or increase on-time delivery, or simply demonstrating desired organisational values)?
Yes, every business should have a set of goals they want to achieve from reward and recognition programs but the golden thread is that they want their employees to know that the place where they spend the bulk of their waking hours recognises and appreciates their effort. Addressing this fundamental desire of human beings, of being needed and appreciated, can have amazing results. Increased engagement, improved productivity and sales are the valuable by-product of a happy and enthusiastic workforce.
6. The time taken on administration and keeping a program going also needs to be considered in your opinion whats the key to a sustainable program?
Thats easy; the key to a sustainable program is having a reliable system. Programs that rely on people instead of a consistent and replicable system are doomed from the start.
Running a program on a robust system ensures that the program can be implemented and run consistently across an entire business (even around the planet) indefinitely.
In terms of actual time taken to administer a reward and recognition program, if you are using a system, it should take no more than an hour or two per week for a multi thousand participant base.
