Recognition Help Desk: 3 Tips for Funding a Recognition Program

May 5, 2021 Aaron Kinne

Coins and calculator

5-minute read

Is the idea of implementing a robust, comprehensive employee recognition program – with all its inherent benefits – near the top of your wish list? Are you stymied by the lack of budget for such a program? The truth is, you may already have the funds you need to put a program in place. You just have to know where to look.

“You’ll be surprised how much money your organization probably spends on recognition without really knowing it,” notes Tony Tsai, AVP corporate communications, CAA Club Group of companies. “A lot of times, recognition is spent in many different areas, from many different accounts. From department lunches, to gift cards, to little moments.”

But can you actually fund a strategic, comprehensive program by reallocating funds from the “hidden” and underperforming recognition activities you already have in place?

That was the question Mary Martinolich, director of organizational effectiveness, and her team at Health First faced. “We are nonprofit healthcare and we do not have deep pockets,” she noted. “And after last year with COVID, our revenues were down, so it was not a good time to go to our senior leaders. Instead, we reallocated all the dollars that we spent on our celebratory events and recognition stores to fund the ‘Well Done’ [recognition] program. We took those dollars that primarily supported something that happened just once a year and turned them into dollars that could promote recognition throughout the year – which was a real win.”

With that as our background, let’s look at three simple tips that will help you fund a vibrant, company-wide, values-based recognition program in your organization.

Tip 1: Uncover the hidden spend.

Is your company already funding various recognition activities on an ad-hoc, inconsistent, or informal basis?

Because such programs are rarely centralized, monitored, or measured, they tend to be forgotten – meandering along on their own inertia. They may be hidden in budgetary nooks and crannies – costing your organization time and money spent managing vendors, planning events, tracking inventories, and troubleshooting problems.

And here’s the real kicker … they may be costing you more – far more – than a cohesive, centralized recognition program. “Since we’ve launched [our unified recognition program], we’ve probably spent less than half of what we used to spend on recognition,” observes Tony. “It’s giving our leaders a better idea of the value of what recognition should be.”

Tip 2: Identify your Total Rewards “slackers.”

Have you ever done a line-item analysis of your Total Rewards spend? Things like R&R expenses? Retention bonuses? Or the ubiquitous “perks”?

If not, you might be surprised by the number of programs that are obsolete, underperform, or don’t align with your Total Rewards strategy.

A Total Rewards inventory audit gives you the chance to take a fresh look at what programs fail to deliver on their ROI promise – while identifying those that provide real, meaningful value to your organization.

By uncovering, analyzing, and consolidating your hidden recognition spending and your underperforming rewards programs, it’s likely you’ll find the funding for a unified, comprehensive social recognition program – one that delivers on your investment and helps build a culture that propels your business forward.

Tip 3: Make the business case for employee recognition.

Even if you’ve uncovered existing funding, you still may need to make the business case for a social recognition program to senior management. That was the case for Claire Whieldon, global reward programmes director at Workhuman® client AstraZeneca.

“When we initially went to the leadership team, they asked, ‘How much do we already spend on recognition?’" she recalled. "What are we investing? What return are we actually getting?"

She noted that while there were a couple of ad hoc recognition programs in some of the larger locations, there wasn’t one place to compile the information she was looking for. That provided the argument she needed.

“As a company full of scientists, you can imagine they're really, really interested in data,” she adds. “So having one platform gave us a great opportunity to bring all of that data together,” and that became “an easy way of selling the program to the board.” In her pitch to senior leadership, she told them: "There's going to be huge amount of data that we can get – not just what we're spending, but how  people are connecting, what skills are being recognized, and how is the organization collaborating. In short, the data we'll be getting is so powerful. That was an important part of our business case.”

The ROI of social recognition

“Social recognition is an investment with quantifiable returns: increased engagement, productivity, quality, and profitability; and decreased turnover and absenteeism,” note Eric Mosley and Derek Irvine in their book, “Making Work Human.”

Workhuman research has documented volumes of solid, empirical data that makes a strong case for the ROI of a unified social recognition program. In fact, much of it is well-chronicled in Chapters 3, 7, and 8 of “Making Work Human.” And while I couldn’t possibly cover it all here, I can assure you … the evidence that a comprehensive social recognition program has a positive impact on retention, engagement, and productivity is nothing short of overwhelming.

“Crowdsourced variable pay can be self-funding,” observes compensation consultant Jim Brennan. In his view, crowdsourced pay – in the form of social recognition – more than pays for itself: “It will come out of productivity improvement, which makes it easy to sell to management.”

Find the funding.

In the end, all or most of the funds you need to implement a unified, comprehensive recognition program may already exist. You just have to know where to look.

“If you start to calculate it all,” notes Tony, “you’ll realize you have the funds to support a more centralized recognition program that not only allows people to see recognition across the enterprise, but gives the business visibility into how much is being spent.”

Ready? Start your search today!

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About the Author

Aaron Kinne

Aaron Kinne is a senior writer at Workhuman.

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