Human Resource Management

Five-Year Plan? Organizations Struggle to Make the Most of Rewards and Recognition Programs

Nicole Stewart, Research Associate, Leadership and Human Resources Research
June 13, 2011

Canadian organizations spend an average of $175 per employee annually on recognizing and rewarding workers for their performance or years of service. While it is just 0.26 per cent of payroll, this expenditure is a significant amount, especially for larger employers.

Despite the financial resources and staff time put into these programs, employers often struggle to get employees to participate—and to ensure that recognition is meaningful and consistent throughout the organization.

Organizational Investment

Ninety-seven per cent of the organizations surveyed by The Conference Board of Canada have an employee rewards and recognition program. However, fewer than half of organizations feel employees are satisfied with the program, even though the number one goal is to increase employee engagement.

While few employees would refuse a reward, it is often recognition that makes them feel valued and contributes to higher performance.

The Conference Board of Canada report, Making It Meaningful: Recognizing and Rewarding Employees in Canadian Organizations, benchmarks recognition and rewards practices and programs across Canada.

It covers the types of rewards, gifts, milestones, and accomplishments associated with long-service, retirement, and performance-based recognition programs. The report describes how organizations communicate, administer, budget for, and evaluate their rewards and recognition programs.

Evaluating a Program

While few employees would refuse a reward, it is often recognition that makes them feel valued and contributes to higher performance. Rewards and recognition programs allow organizations to affect employees’ perceptions of organizational and manager support, as well as their views of fairness, all key drivers of employee engagement.

Organizations need to ask what they are trying to achieve and whether existing programs are making the most of their investment. When evaluating rewards and recognition programs, organizations should do the following:

Consider the objectives of the program. If the objective of the program is to increase engagement, then employers should consider what drives engagement in the organization.
Take employee preferences into account. While many employees thrive in the spotlight, others are better rewarded with a private thank you from their manager.
Ensure recognition is delivered sincerely. The most generous rewards lose value if the recipient thinks the accompanying recognition is insincere. Employers should ask themselves: “Who is best situated to provide recognition—the direct manager, senior management, or someone from outside the organization?”
Make recognition timely. Recognition for something accomplished eight months ago—while still welcome—can have less of a positive impact on employees than immediate feedback. Organizations should ensure that recognition is provided as soon as possible after the corresponding accomplishment.
Tap into the workplace culture. No two workplaces are alike. When thinking of ways to meaningfully reward and recognize employees, employers should consider their workplace culture. What may work well in a sales environment, such as a call centre, will probably not be as effective in an educational institution.