Recognition programs used by organizations to reward and motivate employees can sound like they’re offering the best of everything. It can be difficult, however, to pinpoint whether or not these programs are actually accomplishing what they set out to. Is there a significant ROI, or are they really only for show?

A Culture of Recognition

The culture of appreciation that these recognition programs help to foster can attract and retain top performers, as well as improve performances by increasing engagement. (These programs can complement salaries and data derived from compensation management software.)

Of course, total rewards programs are just one of the many ways organizations can increase employee engagement. Still, there are a number of reasons why they are significant on their own.

Best Practices

Organizations typically establish recognition programs to improve the culture of the workplace, but they don’t always integrate the various aspects of such programs fully with the business strategy or existing culture. This fails to capture the full value of worker recognition programs

For this approach to succeed, it must motivate workers directly, both globally and individually. As you strategize your plan, keep in mind these key principles.

  • Include both formal and informal recognition
  • Offer a variety of rewards; what is a reward for one employee might not be for another
  • Emphasize that the recognition is in response to increased quality of performance, rather than quantity of effort
  • Recognize employees frequently, as irregular recognition can be worse than none at all
  • Measure the cost of the reward system and the benefits gained

A successful recognition program has to be about more than acknowledgement when a supervisor notices or remembers. It has to be a carefully thought through and well-planned approach, with a schedule and a way of measuring what warrants recognition.

Measuring Success

Applying various metrics is a simply way to quantify, measure, and track key performance indicators. This includes the linkage between program costs and results and the allocation of financial resources.

Metrics typically outline the current situation, compare current numbers with previous years’ or with a competitor’s position, and quantify goals to measure progress.

Some of the key considerations when choosing what to measure are:

  • Use readily available data that can be gathered regularly
  • Speak in terms, ratios, formulas, and language business leaders are familiar with
  • Focus on results and quality, not just cost
  • Tie metrics to key challenges facing the business with potential results
  • Exclude metrics that don’t add decision-making value
  • Stick to simple metrics
  • Identify and compare results with competitors whenever possible
  • Avoid soft metrics, based on feelings or intuition
  • Measure ROI, cost/benefit ratios, and impact on problems

The overall goal of these metrics is to give the whole picture of what is happening, and focus on key areas where change is necessary. If chosen carefully, these metrics can develop a benchmark to use for evaluating the progress towards goals moving forward.

Choosing a recognition program as part of your overall compensation strategy could very well work wonders for your business, both financially and in overall perception of company culture and employee satisfaction. Don’t be afraid of data or of measuring your results. Having concrete information about your program will only reinforce its merits and garner support for your programs.