Building a business case for employee recognition

When you’re recognized for achieving a goal, it feels pretty good, doesn’t it? You feel supported, valued, and appreciated. Most importantly, you get that extra dose of encouragement and want to accomplish more.

Increasingly, leadership practices emphasize the role recognition plays in keeping employees engaged and working at their best. Despite this, many HR departments continue to struggle with how to justify investing in recognition programs for their people. Besides the business case, organizations aiming to adopt employee recognition need to figure out what kind of program or initiatives will best suit their objectives. And once decided, implement and communicate the program throughout the organization. We get it, it’s not a walk in the park. 

That’s why we’ve provided an overview of those practices and program features we believe drive the best results as well as a number of compelling statistics to power your business case.

At the end, we’ve also included a link to our own FREE business case template.

Traditional vs. ‘new wave’ employee recognition 

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The traditional idea of employee recognition may conjure up the classic ‘employee of the month’ - a manager recites the same speech and recognizes one of a handful of top performers each month. The broader team is often left uninspired, and the discussion of employee engagement is put on the back burner for another month. 

Traditional methods of rewards and recognition - which travels vertically through an organization - often lack inclusion and real motivation. Even worse, it risks coming across as forced, fake, or inauthentic. In order for recognition and rewards to be truly impactful for your organization, that narrative needs to change. Rather, a robust process that fosters a collective experience and leaves team members feeling both supported and empowered. 

Peer-to-peer recognition, while still a relatively new concept to the employee engagement world, is already making waves. It challenges the one-way, traditional sense of recognition and the idea that cash incentives are the only rewards that drive results. In fact, peer-to-peer is 35.7% more likely to have a positive financial influence than manager-only recognition.  We’ll dive deeper into peer-to-peer recognition shortly. ‍

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The cost and threat of poor employee engagement  

It can be difficult to pin down an exact ROI on the implementation of employee rewards and recognition programs given the variety of challenges faced by organizations. However, the influence employee appreciation has on issues like retention, loyalty, productivity, and work culture is indisputable. And the numbers don’t lie:

• 2.5x more revenue with employees who are highly engaged vs. those with low engagement 

• 2x annual net income than those companies who do not prioritize engagement 

• High performing companies were 37% more likely to use a recognition process to motivate employees 

• 74% of companies who have a recognition and reward process report a better work environment 

• 46% of managers consider employee recognition an asset, rather than an expense

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‍Specific selling features 

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So, your organization is interested in the idea of a recognition and rewards program and you’re leaning towards something innovative, easy, and fun. But, you’re not sure what program design to put forward with your business case. Let’s get into the nitty-gritty of things and explore the specific features and the objectives they support:

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Drive results with objective-driven campaigns 

Recognition programs don’t just “motivate” employees - they inspire employees to hit specific targets or KPIs that support your organization’s strategic goals. How can you ensure that your program isn't generic? Opt for a program that allows you to craft tailor-made campaigns for both the broader organization as well as for specific teams. 

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With Qarrot, you can build campaigns around any measurable objective - such as leads closed or calls logged. When team members hit those objectives, you can award them with unique badges (also customizable) and points they can redeem for rewards. What more, they also come with gamification features to keep team members engaged and having fun. The more engaged and interested your team members are, the better results your recognition and rewards program will achieve. So, keep it fun!

Empower with peer-to-peer recognition 

As explored earlier, the traditional methods of recognition leave a lot to be desired. Instead of (or in addition to) a top-down approach, leaders should strive to create an environment where employees can motivate and inspire each other. This means you can improve workplace culture while simultaneously reinforcing the core values you want employees to exemplify. In other terms, you can help employees better identify and align with the organization - which is crucial for retaining talent. And the celebrations don’t have to stop there - it’s equally important to mark other occasions like birthdays and work anniversaries. When employees are engaged, their performance reflects that, compared to an unengaged team that often comes with a larger price tag in the long run. 

Lighten your load with program automation

All too often, we’ve heard from stressed out HR managers who are working overtime to stay on top of their company’s email and spreadsheet-based recognition and rewards program. Not only do manual programs like this drive many HR managers to the brink, but they’re also far less effective at driving results. This is especially true as organizations grow and the lack of structure wreaks havoc for managers, employees, and the HR department alike. Thankfully, now with the software-enabled programs of today that no longer has to be the case. Recognition software, like Qarrot, helps streamline and automate many of the program tasks like sending recognitions, tracking points, and distributing rewards. Program automation can literally reduce your administration effort by 75%.

Many programs, including Qarrot, also offer intuitive reporting so you can uncover just how engaged your employees are as well as monitor what types of incentives get the best results. 

Putting together your employee recognition business case

Even though recognition software like Qarrot makes it easy to measure results, we know it’s often difficult to estimate what those results will be when you’re at the business casing stage.

That’s why we’ve put together an easy-to-use and FREE business case template in Google Sheets. Download our template to put forward an ROI-based argument for employee recognition within your organization.

Get FREE Business Case Template