How to Find Budget Dollars for Employee Recognition

Sharlyn Lauby

22 Mar 2018

Let’s face it. Sometimes as much as HR and the organization want to create and implement a program, the resources simply aren’t available. As a result, we have to resort to the “no-cost, low-cost program options”.

I thought about this as I was planning my agenda for this year’s WorkHuman Conference, pioneered by Globoforce. I’ve been to every year since its inception and it continues to get better. This year’s conference is being held April 2-5, 2018 in Austin, Texas. And it’s not too late to join us! (Check out the promo code at the end of this post for a discount.)

Anyway, back to the conference. I saw that one of the sessions this year was titled “Show Me the Money: 5 Unexpected Places to Find Recognition Budget” and reached out to the speaker Rob Schmitter, solutions architect at Globoforce, to see if he would give us a sneak peek. Thankfully, he said “yes”.

Rob, I’d like to think that everyone understands recognition is important. But I could see some organizations questioning whether or not they need a “formal” program (versus an informal one). What’s the one statistic that can help companies start to consider formal recognition?

[Schmitter] For me, it’s less about a statistic and more about a realization. If you want better business outcomes (less attrition, more engagement, higher sales, more profit), then create a better employee experience. Products and services will come and go, but it’s your employees that are the constant and the driving force behind those products and services. They don’t invent themselves.

It stands to reason that more engaged employees deliver better products and are more likely to ‘Wow’ your customers. That’s what drives better business outcomes. Companies that focus on human workplace practices like trust, relationships, feedback, empowerment, growth and appreciation consistently out perform their competition because their employees are more engaged.

To me, the first step in implementing any program is conducting an internal assessment. How can organizations conduct an assessment of their recognition programs?

[Schmitter] Conducting an internal assessment of existing recognition programs can be a difficult task. Here are three things to keep in mind:

Know where to look.
Get the full cooperation of those owners to come clean in terms of activity and spend.
Realize you’ll never identify everything, especially when a formal, centralized program does not exist.

I’ve seen some pretty clever (and sneaky) rouge programs over my 30 years of total rewards experience. That said, I do have 3 favorite places to look first.

Finance. Specifically, manager and employee expense items that can’t clearly be categorized or understood.
Compensation. Any ‘one-time’ employee payment should be clearly understood and pay close attention to the ‘Other’ category. Most organizations have one and this can be a gold mine.
Payroll. What payments do they see that look suspicious in nature?

There are plenty of other places to look too, but these are your best bets. Oh, one last thing, whatever dollar figure you come up with in terms of spend, triple it! That’s what our research suggests the real spend is…

I don’t want to give away your session during the WorkHuman Conference, but one of the things you’re going to discuss is how to get the budget for recognition programs. Are there any assumptions that HR pros need to keep in mind when asking for budget dollars to implement a recognition program?

[Schmitter] During the conference, I will be sharing 5 places that can help fund your recognition program and it’s very unlikely that just one will provide all the dollars you need. In fact, sourcing budget is generally an exercise in identifying or shaving off a little budget from a multitude of sources.

All that said, getting approval to invest in a recognition program almost always comes down to return-on-investment (ROI), as it should – organizations can’t afford to invest in just a ‘feel good program’. It has to deliver some value back to the business. The good news is that the investment in recognition, on a per employee basis, does just that.

I believe the return on the investment ratio just can’t be beat with any other HR management tool. We have some great case studies (and will be sharing a couple more during WorkHuman) that demonstrate some impressive results and it’s that kind of data that will ultimately get your investment approved.

Unfortunately, the reality of business is that we don’t always get everything we ask for. But in the case of recognition, having a program turned down can be perceived as the company saying, “it’s not important”. How can senior leaders balance recognition with budget demands?

[Schmitter] I think the conversation is finally moving away from recognition not being important. More and more senior leaders realize now the opportunity that a strategic, social recognition program presents. The research and results just can’t be ignored anymore.

That said, having your program funding request denied is still a reality and more likely due to poor program strategy and design versus the idea that recognition is not important. To overcome the budget approval obstacle, make sure that your program can demonstrate real ROI. Take on some big HR or business objectives and design a thoughtful program around those objectives. Be sure to have your success measures in place and documented when you go for approval. Just like you have a compensation strategy, you should have a recognition one too.

Last question. Even though we’re talking about how to get budget dollars, what’s one “no-cost” recognition strategy that organizations can implement, while they’re trying to get the budget?

[Schmitter] I’ve always thought that one of the best forms of recognition is to be a great listener. It acknowledges to others that you hear them and that what they have to say is important. You may not agree with it, but the simply act of not being dismissive or uninterested tells others that you appreciate them, that they have a voice and that they belong in the conversation. It feels good and is cost free!

My thanks to Rob for sharing his ideas. If you’re not already subscribed to the Globoforce blog, take a moment to check it out. And as promised, you can use promotion code WH18INF-DBU to get a little discount on your WorkHuman Conference registration.

We spend a lot of time on this blog talking about the increased focus on employee engagement and retention. Part of the way organizations can create an engaging culture and keep employees is by recognizing them.