Budgeting and planning for reward and recognition: three questions to ask
With 2018 fast approaching now is the time that many businesses will start to think about next year's reward and recognition budget.
If that's you, here are three questions you should be asking:
1) Are we spending appropriately?
There are a number of points you need to consider here, but a good place to start is to analyse what return on investment (ROI) have you achieved to date. You can refer to a range of data to support your thinking, from 'spend per employee' to usage figures. It's also worth considering the Value on Investment (VOI), which instead of focusing on tangible measures such as sales and revenue, looks at intangible measures such as employee engagement. With these points in mind, are you spending enough or is there a case for upping the current budget? You should also be benchmarking yourself against other businesses; for example, the industry average for R&R spend is between 1% and 2% of payroll.
2) Do we need to shake things up?
The best reward and recognition programmes are those that respond to the needs and wants of their employees and now is a good time to consider any changes that you may want to make. In an ideal world you will have collected a range of management information over the past year, which will paint an insightful picture of what is and isn't working in terms of your employee recognition strategy. For example, are there any reward preferences? Are some teams more engaged than others? To what extent are rewards being linked to core values and other business goals?
At the same time think about any developments in employee engagement thinking and how that might impact on your strategy for the coming year. One trend that is continuing to gather pace is flexible working, with more and more employers allowing employees to work flexible hours, often remotely. This is particularly interesting because some employers are offering it as a reward to recognise the efforts of their staff - this is great use of your recognition budget because it doesn't cost a penny!
3) Are we making the best use of tech?
Technology can have a major impact on your organisation's employee recognition culture and for more and more businesses, it's crucial to the success of their reward and recognition strategy. People are more likely to engage in things that are pragmatic and user-friendly and online portals and apps allow for reward and recognition nominations to be made quickly, easily and on-the-go. Online social recognition tools are also an effective way of communicating successes and spreading the message that you value and recognise your team.
That said, if you're taking a "tech-led" approach to R&R, it's important to build your portal with your own workforce in mind and, in our experience, many businesses that want a tech solution require the development of bespoke software to suit their own specific needs. For example, we worked with one client where a huge amount of time and effort went into creating a solution that worked for their offline staff. We specifically engineered bespoke software, taking into account a umber of unique issues - from outdated browser requirements to the specific handsets used by their offline staff. All of this is hugely important, but can have a significant impact on budgets, so is something that needs to be carefully considered at this stage.
Wanting to learn more about budgeting for reward and recognition? Register for our webinar this Thursday.
Jamie King is director of global rewards at Xexec.
This article was supplied by Xexec.
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