Five trends to consider when designing a recognition program.
By Debbie Bolla
Todayâs organizations invest heavily in recognitionÂ programs, according to a WorldatWork study whichÂ found that some spend as much as 10 percentÂ of payroll on employee recognition. While theÂ average investment is two percent of total payroll,Â organizations that are incentivizing their workforceÂ do it with good reason. Their return on investmentÂ includes happy, loyal workers who are productive andÂ more likely to stayâfactors that are critical in todayâsÂ tight talent market.
Each year, the Incentive Research Foundation conductsÂ a study on the key trends in employee recognition.Â The IRF 2020 Trends Report found several factors thatÂ are making an impact in the way that organizationsÂ reward and recognize their workforces. Here are fiveÂ to consider.
1. The use of reporting and analysis to show ROI isÂ growing. The amount of employee data available toÂ HR has increased steadily over the last few years, andÂ HR continues to be challenged to show the value inÂ their investments. As a result, the IRF 2020 TrendsÂ Report found that the number of organizationsÂ conducting analyses on how programs changeÂ behavior increased to 44 percent, compared to 25Â percent in 2019.
The report says that HR leaders should considerÂ both tangible (staff turnover, productivity, sales,Â revenue, market share, and customer acquisition) andÂ intangible (employee satisfaction, collaboration, andÂ impact on company culture) metrics to understandÂ overall program ROI.
2. Feedback from participants helps companiesÂ measure program success. The most common measureÂ of program success used by both organizations (68Â percent) and third parties (80 percent) is employeeÂ satisfaction. This was the most valuable metric toÂ demonstrate success to senior management in 2019 asÂ well.
3. Gift cards are rewarding to employees andÂ organizations alike. The IRF 2020 Trends Report foundÂ that gift cards continue to be an easy way to rewardÂ employees with what they deem as âfun money,âÂ affording them the ability to select their own giftÂ or experience. The research found that brandedÂ gift cardsâones that align to the interests of theÂ recipientâoffer greater perceived value comparedÂ to cash. Gift cards for exclusively online retailers likeÂ Amazon are the most popular, according to 65 percentÂ of the respondents.
4. One-of-a-kind experiences have a lasting impact.Â Incentive travel is rising to the top as a fresh andÂ unique reward. In fact, the Incentive Travel IndustryÂ Index reports that 73 percent of destinationÂ management companies and suppliers said thatÂ offering one-of-a-kind, exclusive experiences wasÂ the top way to add value. Travel incentives haveÂ the power to create memorable experiences thatÂ employees will ultimately link to the organization andÂ their hard work.
Activities that are closer to home and focus onÂ participant preferences are also effective. Some ideasÂ include guitar lessons, spa days, cooking classes,Â or exclusive access to new restaurants. Setting upÂ a âgifting suiteââa marketplace where attendeesÂ can select and customize gifts based on theirÂ preferencesâis also a unique approach.
5. Recognizing more employees instead of beingÂ exclusive has many benefits. Todayâs organizationsÂ are designing their programs with a wide net soÂ the majorityâif not entiretyâof the workforce isÂ rewarded. The study also found that organizationsÂ often have multiple or tiered programs that tie in aÂ larger-scale reward (like an incentive trip) for the top-tierÂ performers, but still recognize other employeesÂ with merchandise and gift cards.
6. Personalization creates a lasting response toÂ recognition programs. As organizations have seenÂ in the last few years, there isnât a one-size-fits-allÂ approach to employee incentive programs. EmployeesÂ respond better to a personalized program. The IRFÂ 2020 Trends Report found that by using participantÂ data, organizations can customize gift card andÂ merchandise options to align with employee interests.
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