Prioritise Your Employee Recognition Goals

Establish why you need a recognition program

A recognition program isn’t an end in itself. Recognition can help your employees feel appreciated. But it can also enhance teamwork, increase trust in leaders, grow your brand, build your competitive edge, and improve your bottom line. It’s up to you to decide what recognition benefits you’re targeting and in what priority.

So, gather your buying committee and ask yourself a few questions:

• What do you hope to accomplish with a recognition solution?
• What areas of your business do you plan to impact?
• What metrics do you want to improve?

No one wants to be that leader who checks a box on their to-do list for a million-dollar recognition program but isn’t 100% sure exactly why. So, let’s identify your company's unique "why."

‍Get insight into how companies like 3M, Southwest Airlines, and Chevron decided on goals for their recognition program—and the results they achieved.

What do you hope to accomplish with a recognition program?

In the 1960s, the head of the industrial engineering department of Yale University reportedly said, “If I had only one hour to solve a problem, I would spend up to two-thirds of that hour in attempting to define what the problem is.” Objectives matter. So, before you ask how long should this take or what’s our budget (both good questions, by the way), consider asking questions that are more purpose-oriented like:

• What problems do we hope to solve?
• What cultural impact do we hope to achieve?
• How will we measure success?
• You could even use author Clayton Christensen’s jobs-to-be-done theory and ask this: What job are we hiring employee recognition to do?

This exercise doesn’t need to take a long time, but it does need to happen. When an organisation can articulate exactly what job they’re hiring a new recognition program to do, it becomes much more obvious which providers are a good fit and which ones are not.

Get the data you need to refine your employee experience and workplace culture goals in our annual Global Culture Report.

Plan your return beyond investment

The most common employee recognition mistake that we see organisations make is aiming too low. Working with thousands of companies, we’ve seen dramatic results from employee recognition beyond our clients’ expectations.

Recognising employees has led to such unanticipated things as improved customer experiences (in retail), improved patient outcomes (in healthcare), increased innovation, and the list goes on. So, it’s good to think beyond your current aspirations to imagine what’s really possible. Go into your dream space for a moment. Consider the return you’d like to see beyond your investment.

“When recognition is done right, it helps success come more easily. We currently have the highest quality outcomes in the history of our organisation.”
‍—Chief Human Resource and Ethics Officer, Ohio Living

Here are the top 5 questions we get about the ROI of recognition, including how to plan your budget and how to measure impact across your organisation.

What will success look like for you?

A good way to get a little more aspirational with your goals is to check 10 items on the following wish list. We’re warning you, it’s a good list. You may be tempted to check every item on it, but don’t. The purpose of the exercise is to help you prioritise.

Business Impact

• Grow our bottom line
• Increase profitability
• Retain our best employees
• Attract new talent
• Boost engagement
• Drive sales
• Enhance productivity
• Improve customer/patient experience

Culture Impact

• Drive innovation
• Give work purpose
• Increase the sense of opportunity
• Magnify feelings of success
• Make employees feel appreciated
• Strengthen wellbeing
• Help leaders become trusted mentors
• Connect employees to one another
• Fuel more teamwork
• Become more inclusive
• Champion our values
• Increase employee motivation
• Decrease burnout
• Keep people safe
• Develop skills and competencies

Employee Experience Impact

• Improve participation
• Make giving recognition easy
• Provide a top-rated mobile app
• Integrate with apps people use
• Deliver strong offline recognition
• Delight with great award choices
• Make it fun with digital awards
• Create custom trophies and awards

Administrative Impact

• Consolidate platforms/programs
• Reduce costs
• Replace an outdated program
• Show results with smart analytics
• Enable self-serve programs
• Integrate with other HRIS
• Provide great budgeting tools
• Keep employee data in my country
• Customisable to fit our culture
• Improve customer service
• Comply with recognition tax laws

It’s exciting to think of all the ways a well-executed recognition solution can impact your organisation. Now, where did your wishes cluster? Did they tend to bundle in any area in particular? Or were they all over the map?

Interpret your results

If you found your recognition priorities scattered throughout the list, that’s perfectly natural. After all, some administrative improvements are tied to business outcomes and vice versa. Just be aware that the more goals you have that are related to culture or business impact, the more capable and experienced of a partner you will need.

If most of your recognition goals are clustered in the employee experience and administrative impact areas, you’re not alone. In many organisations, administrative improvements can be just as strategically necessary as experiential, cultural, or business goals.

“The power of recognition and appreciation can impact engagement. It impacts attrition, it impacts net promoter score. There is a business return when you do it the right way.”
‍—HR Director, Capital One

Many vendors can tailor offerings up or down in comprehensiveness to meet client needs or will point you to another company, if necessary. But be careful. Even when considering simple recognition functionality, not every employee recognition vendor offers the same level of HRIS integration, mobile app development, strong analytics, customer service, etc. It still pays to compare prospective recognition partners against your wish list and find a good match.

Also, don’t forget your needs are likely to change in the future. Since engaging a partner is an investment in and of itself, it pays to choose a partner who can grow with your needs.

You’ll need a partner who has worked with hundreds of enterprises and offers a complete range of culture consulting services, world-class technology and features, award design and manufacturing, supply chain management and fulfillment, and research and insights to drive your business goals.

See what sets O.C. Tanner apart—in the words of our clients—and why we have a 97% client retention rate. 

Talk to other HR leaders and experts

Talk to HR leaders in and out of your industry about what they’re doing. What’s working? What’s not? How much do they spend on recognition? And how are they using recognition programs to drive business results? Attend conferences, visit websites, and yes, even talk to a sales representative or two.

If you’re nervous, you can make it clear that you don’t want to buy anything right away. Ask them to consult with you first. A good sales rep will respect your wishes. A bad one will help you eliminate that prospective partner from your list right away. Either way, you win.

“[O.C. Tanner’s] consultation and world-class research provide ideas and strategies that help shape recognition at our organisation.”
‍—KPMG

As an alternative, if a prospective provider has a consulting team, engage with them first. We’ve seen that approach work wonders for clients, whether it leads to a recognition solution purchase or not. It always pays to learn from people with experience. It’s much easier than reinventing the wheel.

Once you’ve gained a little bit of insight into what’s possible, revisit the wish list exercise above. See if you’ve added any aspirations. You’re getting closer to understanding your goals and selecting a vendor.

Set your recognition budget

Finally, money matters. If you already have an annual employee recognition budget in mind, good on you. Your foresight and preparation will make the search for a vendor much easier. If you aren’t really sure what to spend, now is a good time to learn and decide.

Remember that you aren’t looking to create a once-a-year impact. The best recognition solutions facilitate frequent employee appreciation. Plan enough money in your budget to allow peers to recognise peers with some frequency. Then, add how much you’d like to set aside for higher value award nominations that require manager approvals. Finally, add what you plan to spend on meaningful years-of-service awards.

If that’s too difficult, a good place to start is to simply ask yourself how much you’d like to spend per employee per year on recognition.

For a frame of reference, the most widely agreed upon standard throughout the industry, including the Society for Human Resource Management, is that 1% of payroll is a sweet spot for what to spend per employee per year. Spend less, and you may not achieve your desired outcomes. Spend more, and you may be overdoing it. The companies we admire push toward this spending goal. They know their people and culture are worth it.

Perhaps the best advice is to spend as close to 1% of payroll as you can afford—while remembering that every dollar you spend will pay you back with interest in increased productivity, motivation, engagement, tenure, and business results. Don’t forget: When it comes to the millions that companies lose in high turnover, low productivity, burnout, and other aspects of a weak culture, 1% of payroll is a drop in the bucket.

“What we are seeing right now is that companies who truly value their people are going to not just survive but thrive.”
‍—Senior Executive, The Auto Club Group

Once you’ve set clear goals and put a solid budget in place, you’re ready to research top providers, and find the perfect recognition partner for your organisation.