Recognition and rewards (R&R) programs are increasingly becoming a proven way for organizations to enhance workplace morale, boost employee productivity, and increase talent retention rates.
However, according to new research conducted in partnership with HR.com, WorkTango found that many companies struggle to fully harness the benefits of their R&R initiatives. To bridge this gap, here are seven research-backed strategies pulled from the survey’s findings designed to help organizations maximize the impact and return on investment (ROI) of their R&R programs:
1. Secure early executive buy-in on R&R programs.
Many recognition and rewards (R&R) programs falter due to insufficient executive buy-in or inadequate budget allocation. This often stems from a lack of understanding about the benefits of these programs. Given that 36% of organizations state that their CEO is responsible for approving R&R initiatives, it's clear that executive buy-in and understanding of the business value R&R software brings is critical prior to the launch of any employee recognition and rewards program. HR leaders should make a strong business case early as to how employee recognition and rewards software investments contribute to improved performance, higher retention rates, and greater employee engagement, and ensure executives support the program and agree on how success will be measured. Once executive buy-in is secured, HR leaders will have a far smoother time rolling out the R&R program, and reporting on its progress.
2. Use a mix of both formal and informal recognition.
Currently, 61% of organizations employ a mix of formal and informal R&R processes. Another 23% utilize mostly informal methods for employee recognition and rewards, and 12% of organizations adhere strictly to formal programs. The remaining 4% of companies utilize years-of-service awards only as the way they recognize employees.
Formal programs, while requiring an initial investment of time and effort to establish, ensure that recognitions are tracked and systematically administered, thereby reducing the risk of overspending or inequitable recognition.
On the other hand, informal programs, though flexible and spontaneous, may lead to inconsistent application between teams and departments, thus potentially causing feelings of exclusion and inequity among employees.
To enhance diversity, equity, and inclusion (DE&I) efforts, use a mix of both formal and informal R&R programs. Doing so creates more equitable and personalized acknowledgments of each employee’s contributions.
3. Measure program effectiveness on an ongoing basis.
Regular assessment is crucial to the success of R&R programs, yet many organizations fail to measure the impact of these programs. Our research found that only 43% of organizations regularly review their R&R programs' effectiveness. Additionally, assessments often occur on an unscheduled basis (34%), making the data somewhat unreliable for those organizations who do measure effectiveness.
Given this missed measurement opportunity, it is unsurprising that only a third of organizations deem their R&R program effectiveness to be high or very high. To improve program effectiveness, organizations should start measuring the impact of their employee recognition and rewards programs through a variety of methods. These can include: gathering feedback on the program through engagement surveys; calculating retention rate improvements; tracking improvements to customer service scores over time as a result of more satisfied employees; tracking improvements in branch productivity based on employee R&R program participation; or any other key success metrics relevant to your organization.
4. Align your R&R program with organizational values and goals.
According to our research, organizations who operate the most effective recognition and rewards programs are 3.5 times more likely to tie their programs closely with company values, and 4 times more likely to measure the impact of those programs on performance.R&R programs that are closely aligned with the company’s goals and values resonate better with employees. This alignment not only incentivizes desired employee behaviors and achievements, but also reinforces the organization's culture. Consider requiring Core Values to be associated with any recognition given, to tie recognition more closely with your company culture.
5. Prioritize inclusive and results-based award nominations.
To enhance the inclusivity of R&R programs, it's important to first diversify the sources from which any associated company or employee award nominations are drawn, and then encourage nominations to be based on actual deliverables or objective employee performance. According to our research results, the majority of organizations primarily rely on managers and peers for R&R nominations, yet only 41% of nominations are based on actual performance results. This indicates a significant opportunity to align R&R more closely with tangible achievements, or else risk award nominations becoming a “popularity contest.”
Broadening the nomination process to include self-nominations, as well as nominations from customers, business partners, or other external stakeholders, can enrich your company’s awards and recognition program. This is because these additional stakeholders can often provide valuable insights based on result-driven criteria. By integrating a wider range of perspectives, organizations can create a more equitable R&R structure that recognizes employees based on the merit of their accomplishments.
6. Get managers and leaders involved to maximize program participation.
According to our research, approximately one-third of organizations surveyed say they plan to enhance their R&R programs by focusing on better training for managers and leaders over the next 24 months.
While most managers are familiar with the basic principles of recognition, they often need a deeper understanding of how their efforts impact the participation of their direct reports before fully buying-in to an R&R program. Companies such as WorkTango often have Manager Resources available to empower leaders and encourage exec-level and frontline manager participation.
7. Leverage technology to make your program more efficient and data-driven.
Many HR leaders want to implement recognition and rewards programs, but struggle to justify the time it will take to administer the program, or the cost of the initial investment. Technology that offers automations, robust analytics, and real-time tracking capabilities can be useful when it comes to proving the ROI of your R&R program over time.
Trending depicting increasing employee Net Promoter Scores (eNPS), increased platform log-ins and participation, and other key stats can often be calculated within an R&R platform to get you started. However, it’s important to note that to calculate the true business impact of any R&R program, HR leaders will have to turn to measures outside of the platform itself. Measuring a reduction in voluntary employee turnover, for example, cannot be calculated within the platform. Instead, HR team members will have to establish a baseline for this figure prior to implementing R&R software, and then analyze employee hires, voluntary resignations and involuntary terminations to track any changes to this metric over time.
The above strategies demonstrate that a well-planned R&R program can significantly improve employee satisfaction, engagement, performance, and loyalty, among other positive business outcomes.
For additional data about the ROI of recognition and rewards programs beyond the HR.com study referenced above, WorkTango recently conducted a separate study in partnership with third-party analyst firm Lighthouse Research & Advisory. For those interested in learning more about the types of ROI associated with investments in Employee Experience technology, you can access that full-length report here.
