Rewarding and recognizing employees have been identified as one of the most critical aspects for developing a highly motivated and engaged workforce. However, when it comes to choosing the right recognition system, most organizations face the dilemma of choosing between the recognition module of their HRMS platform and specialized recognition software. Let’s dive deeper into this debate of HRMS Recognition Module versus Recognition Platform to understand it better.
Role of HRMS in Organizations
Most organizations today use software platforms called HR Management Systems or HRMS to manage the employee data and HR related processes.
There are 3 major functions of HRMS platforms:
A. Data Management
The HRMS is often the system of record for employee data and stores the updated details of every employee ranging from personal information like name, date of birth and home address to official information like designation, paygrade, date of joining, department, reporting manager, etc.
These systems also enable updation the details of any employee in the organization and maintain the history of any changes done over time.
B. Transaction Management
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 have different modules catering to different processes; all modules can be used all together or only specific modules can be enabled as required.
C. Reporting and Analytics
HRMS have strong reporting and analytics capabilities. They come equipped with numerous dashboards and pre-configured reports that enable the HR/ management track key people metrics such as 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 definitely 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.
Employee Recognition Software Platforms
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 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 to reward and recognition employee actions and behavior that are in alignment with the organizations’ business goals and core values.
The key features of an employee recognition platform are listed below:
- Supports different types and methods of recognition that are part of the organization’s rewards and recognition policy
- Enables approvals for specific reward requests and budget management
- Supports both monetary and non-monetary forms of recognition. There might be various options for monetary rewards.
- Can be effectively integrated with other workplace platforms such as HRMS
- Enables effective communication of the rewards and recognition with the organization (and even outside)
- A good employee recognition software is easy to set up, configure and use
Advantages of HRMS Recognition Modules over Dedicated Recognition Platforms
Using HRMS for rewarding and recognizing employees can prove advantageous for organizations as compared to using specialized recognition platforms in the following ways:
1. Lower Total Costs of Implementation
HRMS cover 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.
2. Fewer Integration Requirements
Unlike a specialized recognition platform, the different HRMS modules are already integrated with each other. 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.
3. Employee Data Integrity is likely to be Better
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 a 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 have a negative impact on the entire process of recognition.
4. Need to Deal only with a Single Vendor
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, simplifying the 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.
Advantages of Dedicated Recognition Platforms over HRMS Recognition Modules
Specialized and dedicated software for employee recognition programs offer the following benefits over HRMS recognition modules:
1. Best-in-Class Features
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-fit-all’ strategy that HRMS vendors might adopt. For them, recognition is one of the many modules of the platform.
2. Industry Best Practices
Recognition platforms are designed keeping in mind the industry 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.
3. Pre-Built Integration with Popular HRMS
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 efforts. Such connectors help in reducing the cycle time for implementation and any potential data issues in the future.
4. Suitable for Global Organizations
Specialized recognition platforms tend to 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.
5. Vendor Support for Program Design
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.
6. Affordable with High ROI
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.
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