Five trends to consider when designing a recognition program.

By Debbie Bolla

Today’s organizations invest heavily in recognition programs, according to a WorldatWork study which found that some spend as much as 10 percent of payroll on employee recognition. While the average investment is two percent of total payroll, organizations that are incentivizing their workforce do it with good reason. Their return on investment includes happy, loyal workers who are productive and more likely to stay -factors that are critical in today’s tight talent market.

Each year, the Incentive Research Foundation conducts a study on the key trends in employee recognition. The IRF 2020 Trends Report found several factors that are making an impact in the way that organizations reward and recognize their workforces. Here are five to consider.

1. The use of reporting and analysis to show ROI is growing. The amount of employee data available to HR has increased steadily over the last few years, and HR continues to be challenged to show the value in their investments. As a result, the IRF 2020 Trends Report found that the number of organizations conducting analyses on how programs change behavior increased to 44 percent, compared to 25 percent in 2019.

The report says that HR leaders should consider both tangible (staff turnover, productivity, sales, revenue, market share, and customer acquisition) and intangible (employee satisfaction, collaboration, and impact on company culture) metrics to understand overall program ROI.

2. Feedback from participants helps companies measure program success. The most common measure of program success used by both organizations (68 percent) and third parties (80 percent) is employee satisfaction. This was the most valuable metric to demonstrate success to senior management in 2019 as well.

3. Gift cards are rewarding to employees and organizations alike. The IRF 2020 Trends Report found that gift cards continue to be an easy way to reward employees with what they deem as “fun money,” affording them the ability to select their own gift or experience. The research found that branded gift cards -ones that align to the interests of the recipient -offer greater perceived value compared to cash. Gift cards for exclusively online retailers like Amazon are the most popular, according to 65 percent of the respondents.

4. One-of-a-kind experiences have a lasting impact. Incentive travel is rising to the top as a fresh and unique reward. In fact, the Incentive Travel Industry Index reports that 73 percent of destination management companies and suppliers said that offering one-of-a-kind, exclusive experiences was the top way to add value. Travel incentives have the power to create memorable experiences that employees will ultimately link to the organization and their hard work.

Activities that are closer to home and focus on participant preferences are also effective. Some ideas include guitar lessons, spa days, cooking classes, or exclusive access to new restaurants. Setting up a “gifting suite” -a marketplace where attendees can select and customize gifts based on their preferences -is also a unique approach.

5. Recognizing more employees instead of being exclusive has many benefits. Today’s organizations are designing their programs with a wide net so the majority -if not entirety -of the workforce is rewarded. The study also found that organizations often have multiple or tiered programs that tie in a larger-scale reward (like an incentive trip) for the top-tier performers, but still recognize other employees with merchandise and gift cards.

6. Personalization creates a lasting response to recognition programs. As organizations have seen in the last few years, there isn’t a one-size-fits-all approach to employee incentive programs. Employees respond better to a personalized program. The IRF 2020 Trends Report found that by using participant data, organizations can customize gift card and merchandise options to align with employee interests.


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Tags: April 2020, Magazine Article, Recognition

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