Building a successful recognition program

Gain buy-in, set tangible goals, budget effectively — and launch with a splash
By Razor Suleman
|Canadian HR Reporter|Last Updated: 10/01/2010

Every company wants to retain top performers. After all, they’re the ones responsible for the majority of growth and revenue within an organization. And as the economy improves, voluntary turnover is a growing concern for employers — employees no longer feel lucky to have a job and a paycheque is not an adequate thank you.

Companies can retain top performers, whose flight would pose a serious risk to an organization’s operations and future growth, through a successful employee rewards and recognition program that increases engagement and helps recruit, retain and inspire great people.

But what are the traits of a successful program, how much does it cost and what are the necessary steps to achieve program goals?

Think big: An employee recognition program is a strategic HR initiative and should be treated as such. It is a long-term investment to build an employer brand and establish an organization as a top employer. Business leaders and HR professionals have to believe engaged, motivated employees drive business success. An employee recognition program is not about implementing a new HR program or new software. It is about positively transforming corporate culture and making an organization a better, more desirable place to work.

Gain buy-in: Senior management needs to believe and share in this strategic vision. They need to intuitively recognize the value of employee engagement and champion the creation of a culture of recognition. Top employers build a culture of recognition to increase retention and drive performance, which encourages proven, long-term business returns.

Set tangible goals: The first step to building a recognition program is to identify program goals. Is the program going to be based on corporate values, a key business objective for the fiscal year — such as cost-saving, recruitment or customer service — or some other criteria highly valued by the organization? Program goals are closely tied to corporate culture. Set out the employee behaviours that are most important to the business and reward employees based on how well they meet these goals. Setting tangible goals upfront enables administrators to measure and track the success of the program.

Budget effectively: Don’t view recognition and rewards as an added expense but as a key element of a total compensation package. As an industry best practice, allocate one to three per cent of employee salary to rewards. Given the high costs of turnover, this represents a small investment in human capital with high returns when it comes to employee productivity, engagement and retention.

In many cases, organizations reallocate existing budget from do-it-yourself incentive programs or years-of-service programs that, ultimately, cost companies unnecessary time and resources with little return on investment. They require an administrator to design the program, source vendors, track program performance and manage fulfillment, taking away from HR’s core competencies. Money spent on traditional forms of recognition — such as years of service that recognize presence rather than performance — can be better spent on recognition that focuses on core company values, cost-saving ideas and, most importantly, performance.

When it comes to delivering the message, online, points-based solutions can be effective by reducing the time, effort and cost required to administer a recognition program. By automating key processes, technology frees up HR resources to focus on other strategic initiatives. Online solutions have many advantages over do-it-yourself programs and traditional paper-based solutions. These include:

Online catalogue: Online rewards catalogues can be updated regularly and online ordering and fulfillment ensures employees quickly receive the rewards they want, which reinforces the link between positive behaviours and recognition.

Tracking and reporting: Online recognition programs track every recognition, reward, inquiry and transaction in a system to provide extensive data about the program. Administrators can easily see how a recognition program is trending, identify top performers, make correlations with business objectives and track the budget.

Peer-to-peer recognition: Empowering employees to recognize each other using an online solution is immediate, fosters teamwork and enables a culture of recognition.

Communication portal: The details of a rewards and recognition program and company culture can be communicated all in one place by sharing pictures of a party, training videos or other important information and news.

Launch with a splash

An employer could have the best recognition program in the world but it won’t see the desired results if the program is not communicated properly to encourage rapid employee adoption and use of the online program. Companies should create excitement around the new program with an internal communications plan that includes teaser emails, posters and videos. Providing promotional materials to employees prior to launch day with a link to the program website also encourages program activation and use.

Training managers on the program prior to launch is also critical — managers need to know how and when to recognize top-performing employees. It’s also important to stress online recognition does not replace face-to-face or on-the-spot recognition.

Ultimately, human capital drives competitive advantage and business growth. Top performing employees who fit the corporate culture are a company’s greatest assets — they push an organization forward and inspire their peers to excel.

An effective employee recognition program can add a much-needed human dimension to the total compensation package and go a long way toward retaining top performers and attracting new talent. Start recognizing.

Razor Suleman is founder and CEO of I Love Rewards in Toronto. For more information, visit www.iloverewards.com.

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