Recognition Budget

How to manage your recognition budget in 2019

recognition budgetBudgeting for recognition within your company can be a tough nut to crack. Whether your business has an existing employee recognition programme, or you are still in the process of ironing out the kinks on a workable system, there are quite a few variables to bear in mind when you’re determining how to put your budget to proper use.

Here’s a concise guide to optimal recognition budgeting that will pave the way for a well-balanced programme in 2019:

 

What is a recognition budget?

Your recognition budget is the amount of money your organisation puts aside to facilitate the acknowledgement of positive employee performance throughout the year. Ideally, this budget should be linked to a strategic rewards programme that has been tailored to reach all employees and drive the mission, values and strategic objectives of your business.

When a budget like this is not managed effectively, your company could end up spending a lot more on recognition than you had anticipated, or even realised.  With an overall recognition strategy in place, your reward initiatives can be tracked in a cohesive fashion in alignment with your corporate culture and goals.

 

What is the global median amount per employee?

When it comes to payroll and the median budget for employee recognition, it will all depend on the size and nature of your business. However, there are certain benchmarks in place that can be used to determine a starting point if you are still in the process of tailoring your internal engagement processes.

  • According to WorldatWork (a global association for human resources management professionals and business leaders), there are certain companies that spend upwards of 10% of their payroll on employee recognition. However, the average budget is set at 2%, while the median is 1%.

  • Recognition Professionals International (an association that represents workers in the field of human resources), places the average global expenditure in this regard at between R400 and R700/FTE.

The important thing to remember is that your employee reward budget should be scaled to suit your business. Recognition doesn’t always have to be tied to a financial incentive. There are other routes of acknowledgement that include peer-to-peer recognition and more.

 

3 Top tips to keep your budget lean & manageable

In a disruptive business climate, investing in your employees is imperative, but we also realise you have to keep an eye on your bottom line. Here are a few tips to keep your budget as lean as possible:

  1. Keep it simple. An integrated recognition platform keeps all of your data and analytics in one place. This provides you with a bird's eye view of all your recognition effort and makes it a lot simpler to manage your time and money.

  2. Leave room for hidden costs. There are plenty of engagement platforms that come with hidden costs like registration, on-boarding and set-up. Additionally, there are certain taxation implications to consider, especially if you plan to manage the potential taxation burden of recognition rewards on behalf of your employees. Leave a margin for error.

  3. Overcome budget constraints with gamification. If your budget allows for limited rewards and you want to instil a competition element, be sure to drive programme participation by means of gamification elements that promote friendly competition and social interaction.

 

Aligning your recognition strategy with your business goals

recognition budgetThere is no one-size-fits-all approach when it comes to a recognition programme. Every company has to tailor a strategy that suits their company culture, business goals and the preferences of their employees in order for it to be truly effective. Ultimately, this strategy will serve to guide the allocation of your recognition budget.

Here are 10 questions to ask yourself when you consider your strategy:

  1. What are our goals and targets in terms of recognition?

  2. How will we measure our programme performance metrics?

  3. Are our recognition opportunities linked to strategic priorities within our organisation?

  4. Are we creating opportunity for both formal recognition and informal, day-to-day recognition?

  5. Are we inviting and encouraging company-wide social engagement in the form of posts, likes and comments?

  6. Is there scope for both intrinsic and extrinsic rewards that provide motivational appeal?

  7. Will the programme stimulate strategic dialogue?

  8. Do we have avenues in place for ongoing feedback?

  9. How will we analyse our data analytics and can we do so via a single, user-friendly interface?

  10. Are we stimulating a continuous culture of learning?

This concise guide to managing your recognition budget should have you well on your way to making better use of your in-house resources in 2019. Keep an eye on the blog in coming weeks and months as we share more expert insight on matters relating to everything from effective employee recognition, to sustainable service awards and employee engagement.

In the meantime, feel free to reach out to a bountiXP representative to learn more about our SaaS-based employee recognition and engagement platform that assists businesses to retain their top talent and build tangible bottom-line value by unlocking organisational effectiveness.

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