Employee Recognition

HR: Your guide to sourcing and allocating recognition funds

recognition fundsYour recognition proposal was successfully accepted, you have the buy-in you needed to get going.

Now you need to source the funds for your program…

You already know that your program’s success is tied to senior leadership’s resource commitment to it.

If this is the position you find yourself in, worry no more. We have just the guide for you. In this blog post, we will take you through exactly how to source your funds and how you should be allocating those funds for ultimate recognition success.

Let’s take a look:


1. What’s my budget?

The budgets for the year are already set. You now need to work out what percentage of that budget can be allocated to the running of your recognition program.

Don’t worry, the leg work of calculating that all that has already been done for you. The research conducted by WorldatWork in their Trends in Employee Recognition report for 2017 indicates that a budget of 1% of payroll should be dedicated to your recognition program.

Our recommendation is that a 1 - 2% of your payroll budget, should be dedicated to your recognition program. This will obviously change depending on your geographic location, a US budget would look different to that of one in Africa. You can find out more in our eBook 👉🏼 here.

What often goes unnoticed with regards to recognition budgets is the tax implications for your employees and your company. This often becomes one of those hidden costs that are never budgeted for and can take budget committees by surprise.

Your taxes should either be budgeted for in the rewards portion of your program or as an additional provision. We recommend that it be assigned as an additional provision held back by your company and managed on behalf of your employees to alleviate the additional taxation burden.

2. The role of rewards in your budget

Are your rewards included as a part of your recognition budget? Perhaps you’re not sure just yet, that’s okay.

Your budget should be amended depending on the type of rewards you decide to include in your program. There are generally two types of rewards that you would consider including, they are intrinsic and extrinsic rewards:


Intrinsic rewards could include:

  • Verbal, written, electronic ‘thank you’

  • Real-time peer-to-peer recognition

  • Real-time manager-to-employee recognition

  • Flexible working hours

  • Autonomy

  • Learning and personal growth opportunities

Extrinsic rewards could include:

  • Quarterly and annual awards

  • Celebrations

  • Group travel

  • Merchandise

  • Gift cards

  • Digital vouchers

  • Experience rewards

  • Points-based rewards

We, therefore, recommend that 1 - 2% of payroll be dedicated as your budget if you are including extrinsic rewards. If you are going to be including intrinsic rewards as a part of your rewards mix then your recognition budget could be reduced to a 0.75% of payroll.

“Did you know that according to a trends study conducted by the Incentive Research Foundation, a majority of US companies make use of non-monetary rewards to support their recognition efforts?”

It is, therefore, crucial to consider the types of awards and rewards you’d like to include as a part of your recognition strategy. Remember that your ultimate goal is to boost your company’s level of engagement, productivity and motivation. Whilst also making it fun and meaningful.  

3. Should a fully integrated platform fit into my budget?

A great example of a fully integrated platform is bountiXP we offer a wide range of rewards including; digital vouchers, rewards cards, virtual rewards cards, an online rewards shop, and merchandise rewards. We also have a pretty nifty rewards app as well as a travel mall.

You can reduce your recognition costs with an integrated recognition platform.


Often, employee systems and programs can take time to manage and measure. The benefit of bountiXP is that it keeps all your data, analytics and rewards and recognition budget all in one central place. This level of access to data allows you to keep track of your recognition efforts allowing you to effectively report on your success as well as prove the ROI of your program.


Key Takeaways

Financial conversations are always difficult to have. You are now armed with industry best practices, benchmarks and trends. This should help you make the best use of your budget and bring your company's engagement levels along with it and you don’t need us to tell you that higher levels of productivity generate higher ROI.

We wrote a pretty comprehensive eBook on developing, budgeting and running a pretty rock-solid employee recognition program. We highly recommend downloading it. Simply click the download button below to get going 👇🏼

employee recognition