How to improve the ROI of your employee recognition programme
This has to be the guiding principle behind any employee recognition programme. It’s a human need to be acknowledged and thanked for a job well done, making the recipient feel valued and motivated to keep performing well.
Implementing an effective, successful employee recognition scheme is therefore an essential element of your employee value proposition.
The big question is: how can you measure the return on investment (ROI) you’re getting on your scheme and ensure your budgets are working as hard as they can?
Investment in the right scheme
The first step is to review your current programme and establish how much of your efforts are having any measurable impact – or not. Many businesses are still using recognition and reward in an unplanned, ad hoc way that feels a little bit like a series of stabs in the dark.
By contrast, including measurable key performance indicators (KPIs) in your scheme will make sure your budget goes further and your ROI is secure. There are many ways in which you can measure the positive impact of recognition and reward on your bottom line:
1. Using the right technology
Technology has to be at the centre of any employee recognition activity and not just from a financial investment point of view. An increasing number of people now expect workplace initiatives to be communicated and delivered digitally.
From an employer’s perspective, online solutions are a win-win because of their potential to save time, reduce administration and drive down costs. As workplace culture changes to reflect a demand for more flexible and remote working, online reward schemes can change with it in a way that traditional schemes never could.
Smart admin interfaces mean that set-up and on-going management of these types of schemes is faster, easier and more streamlined, bringing clunky and disparate schemes together in one cost-effective place. Reporting dashboards provide increased visibility on spend and intelligent insight into KPIs and engagement scores, ensuring the recognition activity is fully measurable.
2. Recognition is free
Giving employees the opportunity to recognise and share in the achievements of their peers by making them online, social and interactive is becoming increasingly important to employees.
The latest recognition technology enables any employee, team leader or manager to log in, write a credit and give recognition to another employee that can be viewed by the wider workforce on a ‘recognition wall’.
This type of technology can easily be configured so that recognition can be from manager down, peer-to-peer or between team members, while success can be shared and celebrated in an inclusive, empowering and motivating way.
An optional reward element can give recognition a further motivational boost with a financial value from a range of gift cards or vouchers.
3. Lower staff turnover
According to a recent survey by human resource company Investors in People, one in four employees feel unhappy at work and 47 per cent expect to be looking for a new job in 2018.
In contrast, a study by Forbes also shows that organisations who scored in the top 20 per cent for building a recognition-rich culture enjoyed a 31 per cent lower turnover rate.
The cost to a business of recruiting and training employees is always significant so it is a huge financial setback if that talent leaves. Reduced recruitment costs and more productive employees will therefore directly and positively impact your ROI.
4. Better staff engagement
Studies into employee engagement consistently reveal that having highly engaged workers leads to reduced absenteeism, increased productivity, more sales and better profitability.
An employee who is positively engaged with a company is aligned with its goals and motivated to help it succeed. He or she will perform at their level best each day by bringing passion into their work, which in turn often leads to innovative practices.
Innovation is the cornerstone of progress (and profitability) and research states that employees who receive strong recognition are 33 per cent more likely to be proactively innovating, generating twice as many ideas per month as those who don’t.
Whatever you do to recognise and reward your employees, the most important thing is to review and research your options carefully to ensure you’re investing in the most cost-effective programme. If you get it right, you’ll be reaping further financial rewards in terms of reduced staff turnover, reduced absenteeism, improved employee morale and increased employee engagement. What’s not to like?
The author is Andy Philpott is marketing and sales director for Edenred UK.
This article was provided by Edenred UK.
In partnership with Edenred
We help you build stronger connections with your employees to drive higher engagement&performance.
