By Chris Drysdale Illustration by Jaime Jacob
“VERY FEW PEOPLE OR COMPANIES CAN CLEARLY ARTICULATE WHY THEY DO WHAT THEY DO.”
—SIMON SINEK, START WITH WHY
When we ask new prospects why they want an employee recognition solution they often answer with something like, “because our people need to be recognized.” Saying that is kind of like saying you want to buy a car so you can have a car. Employee recognition is a what, not a why. Extending the car metaphor, you may need a car for your commute to work, or for hauling kids to piano lessons, or for getting four mountain bikes up to the lake, or some combination of those things. But each of those needs points to an entirely different make and model of car, truck, or SUV. The point is, like owning a car, owning a recognition program isn’t an end in itself. Recognition can help your people feel appreciated for sure. But it can also help people develop, enhance teamwork, increase trust in leaders, grow your brand, build your competitive edge, and improve your bottom line. It’s up to you to decide what recognition benefits you’re targeting and in what priority.
No one wants to be that leader who checks a box on their to-do list for a million-dollar recognition program but isn’t 100% sure exactly why. So, let’s find some answers.
In the 1960s, the head of the industrial engineering department of Yale University reportedly said, “If I had only one hour to solve a problem, I would spend up to two-thirds of that hour in attempting to define what the problem is.”1 Objectives matter. So, before you ask how long should this take or what’s our budget (both good questions, by the way), consider asking questions that are more purpose-oriented—questions like: What problems do we hope to solve? What cultural impact do we hope to achieve? How will we measure success? You could even use author Clayton Christensen’s jobs-to-be-done theory2 and ask this: What job are we hiring employee recognition to do?
This exercise doesn’t need to take a long time, but it does need to happen. When an organization can articulate exactly what job they’re hiring a new recognition program to do, it becomes much more obvious which providers are a good fit and which ones are not.
The most common employee recognition mistake that we see organizations make is aiming too low. Working with thousands of companies, we’ve seen dramatic results from employee recognition beyond our clients’ expectations. Recognizing employees has led to such unanticipated things as improved customer experiences (in retail), improved patient outcomes (in healthcare), increased innovation, and the list goes on. So, it’s good to think beyond your current aspirations to imagine what’s really possible. Go into your dream space for a moment. Consider the return you’d like to see beyond your investment.
WHAT WILL SUCCESS LOOK LIKE FOR YOU?
A good way to get a little more aspirational with your goals is to check 10 items on the following wish list. We’re warning you, it’s a good list. You may be tempted to check every item on it, but don’t. The purpose of the exercise is to help you prioritize.
EMPLOYEE EXPERIENCE IMPACT
There. Fun, wasn’t it? It’s exciting to think of all the ways a well-executed recognition solution can impact your organization. Now, where did your wishes cluster? Did they tend to bundle in any area in particular? Or were they all over the map?
INTERPRET YOUR RESULTS.
If you found your recognition priorities scattered throughout the list, that’s perfectly natural. After all, some administrative improvements are tied to business outcomes and vice versa. Just be aware that the more goals you have that are related to culture or business impact, the more capable and experienced of a partner you will need.
If most of your recognition goals clustered in the employee experience and administrative impact areas, you’re not alone. In many organizations, administrative improvements can be just as strategically necessary as experiential, cultural, or business goals. If all you want to do is save money and replace an outdated program, that may just mean a simpler, less expensive solution is right for you. That’s good information for you and your vendor to know right up front. Many vendors can tailor offerings up or down in comprehensiveness to meet client needs or will point you to another company, if necessary. But be careful. Even when considering simple recognition functionality, not all vendors offer the same level of HRIS integration, mobile app development, strong analytics, customer service, etc. It still pays to compare prospective partners against your wish list and find a good match. Also, don’t forget your needs are likely to change in the future. Since engaging a partner is an investment in and of itself, it pays to choose a partner who can grow with your needs.
The more your goals land in the Culture and Business Impact areas of the wish list, the more you need a seasoned partner. You’ll need a partner who has worked with hundreds of enterprises and offers a complete range of culture consulting services, world-class technology and features, award design and manufacturing, supply chain management and fulfillment, and research and insights to drive your business goals. Not surprisingly, the farther toward business impact your aspirations lie, the more you’ll need a strong recognition partner to help you achieve them and the fewer partners you’ll find who are truly qualified to help you meet your goals.
Depending on your timeline, this can either be done quickly or at a more convenient pace. But you’re going to want to get out there. Have some conversations. Talk to HR leaders in and out of your industry about what they’re doing. What’s working? What’s not? How much do they spend on recognition? And how are they using recognition programs to drive business results?3 Attend conferences, visit websites, and yes, even talk to a sales representative or two. If you’re nervous, you can make it clear that you don’t want to buy anything right away. Ask them to consult with you first. A good sales rep will respect your wishes. A bad one will help you eliminate that prospective partner from your list right away. Either way, you win. As an alternative, if a prospective provider has a consulting team, engage with them first. We’ve seen that approach work wonders for clients, whether it leads to a recognition solution purchase or not. It always pays to learn from people with experience. It’s much easier than reinventing the wheel.
Once you’ve gained a little bit of insight into what’s possible, revisit the wish list exercise above. See if you’ve added any aspirations. You’re getting closer to understanding your goals and selecting a vendor!
Next, a word on learning from other organizations. This is important. While looking to other organizations for employee recognition ideas is highly recommended, be careful not to copycat. Recognition influences culture, and culture is all about your organization’s unique personality, attitudes, philosophies, behaviors, and values. Your program needs to reflect you. Not some other company, no matter how famous.
Some customers are so busy benchmarking against what other great companies are doing that they lose sight of their own unique culture in the process. Everyone asks, What’s Google doing? What’s Amazon doing? What’s Nike doing? And that’s fine. But if you get too caught up in copying another company’s culture, you can wind up modeling your solutions after someone else’s problems, opportunities, and goals. So become a great extrapolator. Master the art of extending what you learn from others to your own situation. Look for similarities and differences. But most of all, be sure to set goals that are essential to your organization and culture. Once you’ve done so, go out and find a partner that will help bring your vision, for your culture, to life.
Finally, money matters. If you already have an annual employee recognition budget in mind, good on you. Your foresight and preparation will make the search for a vendor much easier. If you aren’t really sure what to spend, now is a good time to learn and decide.
First of all, remember that you aren’t looking to create a once-a-year impact. The best recognition solutions create a constant flow of positivity and encouragement all year long. Plan enough money in your budget to allow peers to recognize peers with some frequency. Then, add how much you’d like to set aside for higher value award nominations that require manager approvals. Finally, add what you plan to spend on meaningful years-of-service awards. If that’s too difficult, a good place to start is to simply ask yourself how much you’d like to spend per employee per year on recognition. Don’t forget to ask around and check with your peers in other companies to see what they’re doing.
For a frame of reference, the most widely agreed upon standard throughout the industry, including the Society for Human Resource Management, is that 1% of payroll is a sweet spot for what to spend per employee per year. Spend less, and you may not achieve your desired outcomes. Spend more, and you may be overdoing it. The companies we aspire to be like most push toward this spending goal and feel confident their people, and their culture, are worth it.
But that guideline is admittedly aspirational. Our research indicates, across all industries and company sizes, that organizations are spending $150–$200 on average per employee, per year—much less than the 1% of payroll recommended. This provides you with a baseline starting point. Spend more and you’ll get more.
Perhaps the best advice is to spend as close to 1% of payroll as you can afford—while remembering that every dollar you spend will pay you back with interest in increased productivity, motivation, engagement, tenure, and business results. Don’t forget. When it comes to the millions that companies lose in high turnover, low productivity, burnout, and other aspects of a weak culture, 1% of payroll is a drop in the bucket.
Once you’ve set clear goals and put a solid budget in place, you’re ready to research top providers, and find the perfect recognition partner for your organization.
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