While setting up their employee rewards and recognition programs, organizations often face the dilemma of choosing between the recognition module of their HRMS platform and specialized recognition softwares.
Most organizations today use software platforms called HR Management Systems or HRMS to manage employee data and HR-related processes.
There are 3 major functions of HRMS platforms:
1. Data Management
2. Transaction Management
3. Reporting and Analytics
The HRMS is often the system of record for employee data and stores the updated details of every employee.
This could range from personal information like name, date of birth, and home address to official information like designation, pay grade, date of joining, department, reporting manager, etc.
These systems also enable update of the details of any employee in the organization and maintain the history of any changes done over time.
HRMS helps in digitizing and automating a large number of HR processes such as:
1. Recruitment/ Application Tracking
2. Onboarding and Off-boarding
3. Payroll Processing
4. Attendance and Time Management
5. Leave Management
6. Performance Management
7. Employee Recognition
8. Benefits Management
9. Employee Helpdesk
10. Employee Self-Service
HRMS has different modules catering to different processes; all modules can be used all together or only specific modules can be enabled as required.
HRMS has strong reporting and analytics capabilities.
They come equipped with numerous dashboards and pre-configured reports that enable HR/ management to track key people metrics.
These metrics would include hiring, retention/ attrition, performance, productivity, etc. at an organization, department/ division, team/supervisor, and individual employee levels.
HRMS may also allow ad-hoc reports and queries required for decision-making. HRMS are robust tools that power the HR data and processes within organizations.
They are the basic building blocks for the digital workplace concept that most organizations are focused on building.
Popular HRMS include SuccessFactors, Workday, Oracle Cloud HCM, Darwinbox, PeopleStrong, etc.
Read: 7 Ways HR Software Can Support Your Remote Workers
An employee recognition platform is a specialized software platform that enables organizations to reward and recognize members of their workforce systematically.
The platform enables managers and supervisors to reward the good performance of their team members in a timely and structured way.
It also enables peers to appreciate each other’s good work and acknowledge any support or help that they may have received.
Employee recognition platforms help organizations reward and recognize employee actions and behavior that are in alignment with the organization’s business goals and core values.
The key features of an employee recognition platform are listed below:
1. Supports different types and methods of recognition that are part of the organization’s rewards and recognition policy
2. Enables approvals for specific reward requests and budget management
3. Supports both monetary and non-monetary forms of recognition. There might be various options for monetary rewards.
4. Can be effectively integrated with other workplace platforms such as HRMS
5. Enables effective communication of the rewards and recognition with the organization (and even outside)
6. A good employee recognition software is easy to set up, configure and use
Popular employee recognition platforms include BlueBoard, Vantage Circle, Nectar, HiFives, Kazoo, Xoxoday, Bonusly, etc.
Using HRMS for rewarding and recognizing employees can prove advantageous over specialized recognition platforms in the following ways:
1. Lower Total Costs of Implementation
2. Fewer Integration Requirements
3. Employee Data Integrity is likely to be Better
4. Need to Deal only with a Single Vendor
HRMS covers a wide range of HR functions, from employee onboarding, payroll, leave management, and employee recognition through different modules.
Since organizations use multiple modules of the HRMS, the ‘per module’ costs might be lower than that of implementing separate and dedicated employee recognition software.
Unlike a specialized recognition platform, the different HRMS modules are already integrated.
Hence, within the HRMS employee data is readily available to the recognition module, which makes the process more seamless and effective.
Even data from other modules such as performance management, time and attendance, and learning management modules are much easily available to the recognition module as compared to a separate recognition software.
Since the HRMS is generally the system of record for the employee data, any changes in the data like entry, exit, or reporting structure changes are available to the recognition module in real time.
Hence, using the HRMS recognition module ensures higher integrity of employee data.
Compare this with separate recognition software that is dependent on data coming through integration with the HRMS and hence might be impacted by delays or even errors.
Such issues might harm the entire process of recognition.
One of the biggest benefits of using the HRMS for rewarding and recognizing employees is that it requires organizations to deal with a single vendor.
This simplifies procurement, billing, payment, vendor management, and other business processes.
It also ensures that there are no coordination issues while dealing with multiple vendors, especially on aspects like data and integration.
Specialized and dedicated software for employee recognition programs offers the following benefits over HRMS recognition modules:
1. Best-in-Class Features
2. Industry Best Practices
3. Pre-Built Integration with Popular HRMS
4. Suitable for Global Organizations
5. Vendor Support for Program Design
Specialized recognition platforms offer the advantage of best-in-class features and functionalities as they are designed based on significant vendor expertise and experience, specific to the rewards and recognition domain.
The platforms would typically take into account different use cases and scenarios that might be prevalent in organizations in different industries and with different workforce sizes.
This is as opposed to the ‘one-size-fits-all’ strategy that HRMS vendors might adopt. For them, recognition is one of the many modules of the platform.
Also read: Top 10 Reasons for Customizing an Employee Recognition Program
Recognition platforms are designed keeping in mind the industry’s best practices of rewards and recognition.
Their features are based on the actual experiences of multiple organizations in using them as part of the programs.
This can ensure better results in terms of enhancing employee engagement and improving their happiness and satisfaction levels.
Read: 9 Key Points for a Successful Employee Rewards Program
Recognition platform vendors are well aware of the need to integrate their platforms with the existing HRMS systems.
Hence, they have pre-built connectors with most of the popular HRMS that be configured quickly with minimal effort.
Such connectors help in reducing the cycle time for implementation and any potential data issues in the future.
Specialized recognition platforms tend to be better suited for businesses operating globally as they can be easily tailored to the specific employee recognition needs of a particular country or region.
Whereas, HRMS platforms are often restricted by countries or regions as they need to be compliant with the relevant labor laws.
Hence, a global organization might have multiple HRMS platforms across different locations but a single recognition platform that can be integrated with the different HRMS platforms.
Rewards and recognition programs need to be tailored based on the unique needs of the organization and its workforce.
These programs should also incorporate industry best practices.
A specialized recognition platform vendor is better suited to provide support and advice for designing an employee rewards and recognition policy due to their strong expertise and experience in this domain.
The vendor would also understand the critical success factors of a program and the typical challenges involved in the implementation.
Read: A Step-by-Step Guide on How to Set up an Employee Recognition Program
A well-designed and implemented employee recognition program can generate significant returns on investment for the organization.
A good program can help organizations align employee performance with their business goals and employee behavior with their core values and culture more effectively.
Hence, the investment in a specialized and dedicated recognition platform that powers such a program would be better justified for the organization.
This is our take:
Organizations should look beyond the debate of HRMS Recognition Module versus Recognition Platform and focus on selecting a platform based on their specific needs and expected benefits from employee recognition.
Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of experience in the corporate world and entrepreneurship. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank, in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn
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