One-half of employers feel recognition has no effect on employee morale

But engagement key objective of programs: Conference Board
||Last Updated: 05/06/2011

Ninety-seven per cent of organizations in Canada have an employee rewards and recognition program in place, according to a study by the Conference Board of Canada. Yet, less than one-half of the respondents believe their employees are satisfied with the organization’s rewards and recognition practices.

There’s a need for organizations to fine-tune or even revamp the rewards and recognition programs, according to Nicole Stewart, a research associate at the Conference Board and author of the study Making it Meaningful: Recognizing and Rewarding Employees in Canadian Organizations.

Only 54 per cent of the166 medium- and large-sized organizations surveyed are satisfied with their recognition program and 48 per cent believe employees are satisfied with their organization’s rewards and recognition programs.

And while improving employee engagement is a key objective of the recognition programs, most employers believe the program has had no effect on employee morale.

“Those wanting to improve their programs are especially concerned with reaching out to and providing value to all employees,” wrote Stewart. “Organizations considering implementing a new program or changing their existing program should take the time to understand the key drivers of employee engagement, gather employee feedback and consider the company’s objectives as well as employee preferences.”

The average annual amount spent on recognition is $175 per employee. Public sector organizations average $123 in expenditure per employee while those in the private sector spend $208, according to the survey. 0n average, 0.26 per cent of base pay is spent on rewards and recognition programs.

The most prevalent type of recognition program is long-service recognition, found the Conference Board, with almost all organizations rewarding employees for their tenure and 45 per cent of recognition spending going to this area. The most common types of service rewards include gifts, pins, and plaques and the average value of the reward rises with each milestone, averaging from $111 for five years to $842 for 40 years.

Manager-to-employee recognition or “on-the-spot” recognition is in place in almost three-quarters of organizations, said the study. Many organizations use this type of recognition for performance-based recognition, including outstanding individual achievements and team performance. Gift certificates, followed by small gifts and non-monetary recognition, are the most common rewards that managers give employees.

Managers have an important role to play in providing recognition, found the Conference Board. But only 26 per cent of the organizations surveyed provide training to their managers on the rewards and recognition programs.

“Recognition from a manager carries meaning and motivation for employees, whether or not it is accompanied by a reward,” said Karla Thorpe, associate director of compensation and industrial relations at the Conference Board. “Organizations should keep in mind that recognition is personal, in that what motivates one employee is different from what motivates another.”

Nearly two-thirds of organizations have retirement recognition at their organization. Gifts are the most common

reward, with an average value of $426. Most organizations hold events for retirement recognition, with the manager or employee typically having input into the type of event that is held.

Peer-to-peer recognition is the least common, offered by only one-half of organizations, found the Conference Board. Most commonly, employees can recognize their peers for outstanding achievement and teamwork or internal collaboration. Non-monetary recognition is widespread in organizations with peer-to-peer programs.

Eighty-six per cent of organizations evaluate the effectiveness of their rewards and recognition programs. Many feel the strength of their rewards and recognition programs lies in the flexibility and variety their program offers — meaning different types of recognition, flexibility in how recognition is awarded; and the selection of gifts, said the study.

Some of the main challenges in managing rewards and recognition programs include:

• getting employees and managers to actively participate in their programs

• ensuring employees are being rewarded and recognized fairly and consistently

• making the business case — finding the budget, showing a return on investment

• administrating and communicating the program.

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