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How To Build An Effective Business Case For Employee Recognition

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How To Build An Effective Business Case For Employee Recognition

The impact of employee recognition is well known. Despite this, every organization looking at setting up such a program needs to justify the investment internally. Hence, the HR team needs to create an effective business case for employee recognition to get the necessary funding and other approvals.

Also read: Common Misconceptions about Employee Recognition Platforms

Start by Citing Key Research Data on Employee Recognition

To start with, the HR Team should quote key research data to justify the investment to the management.

The following data on employee recognition from research studies can prove helpful:

According to the findings of a survey, 69% of the participating employees accepted that being rewarded and recognized motivated them to continue with their current employer.

Employee of the Month Award

28% of employees have acknowledged the recognition from their immediate superiors as the most powerful form of recognition.

GIVE Model of Employee Recognition

The results of research by Gartner have revealed that positive peer feedback can help in enhancing employee performance by 14%.

Employee Rewards and Recognition

Another study has shown that frequent recognition boosts retention considerably as 63% of employees surveyed said that they were not likely to seek another job option within the next 3-6 months due to receiving frequent recognition.

Long Service Award

Overall, the lack of a proper employee rewards program is one of the primary reasons for the decrease in employee engagement levels.

Disengaged employees can impact the company financially.

How to Create an Effective Business Case for Employee Recognition?

The HR team needs to build a solid business case for employee recognition by presenting verifiable facts.  

How to Build an Effective Business Case for Employee Recognition

1. Explain Alignment of Recognition with Business Goals and Organization Values


Every organization sets some short and long-term goals for its employees to achieve.

These might include, increasing brand awareness, reaching specific business milestones, or establishing stronger customer relationships.

Hence, aligning these goals with the recognition program makes employees feel connected with the success of the business and motivates them to drive outstanding business results.

Also, aligning recognition with organizational values helps build the desired work culture within the organization, which can provide long-term benefits to the organization.

2. Assure that the Program is Not Heavy on Budget

Seek Funding For The Program

Generally, most organizations are averse to the idea of implementing an employee recognition program because they believe it to be too expensive.

The HR teams need to emphasize the importance of providing timely and frequent recognition rather than it being of high monetary value.

A simple thank you note for a task well done or providing an extra day off to employees for a job well done can be highly effective ways of recognizing employees.

3. Outline the Projected Benefits and Targeted Outcomes

Measure The Impact Of The Program

The team should highlight the projected benefits and targeted outcomes of making employee recognition an integral part of HR strategy.

The focus should be on how the program will impact the business and how it is likely to enhance employee engagement and commitment toward the organization.

Overall, the significant role of such programs in boosting talent retention rates and building a strong employer brand to attract great talent from the market should also be emphasized.

4. Present a Simple and Effective Recognition Program Design and Implementation Plan

HiFives Employee Rewards Platform

HR teams should thoroughly research the needs of the business and the workforce. 

They should present a simple and effective program design and implementation plan to their management.

Employee recognition platforms are available in the market that can make the implementation of employee recognition programs extremely simple, cost-effective, and result-oriented.

Hence, the features and functionalities of these platforms should be carefully assessed and compared to match the needs of the program and ensure smooth integration with existing systems.

5. Clearly Outline the Estimated Costs and ROI of the Program

Monetary Rewards

Importantly, presenting an estimate of overall costs and expected returns is essential to build a strong business case.

So, the management can use this information to understand the financial benefits of the program and its long-term impact.

6. Present Examples and Case Studies of Other Organizations

Measuring the Success of Employee Recognition Programs

Additionally, HR Teams should also try to present case studies of other organizations that have benefited from such programs. 

Case studies of industry peers would have an added advantage.

Moreover, to provide a balanced perspective, they could also share case studies of programs that failed and the lessons learned.


Building an effective business case for employee recognition by clearly articulating its benefits is a critical step for HR teams to secure approval from their management to implement employee recognition programs in their organizations.  

Sagar Chaudhuri

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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HiFives is a global employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. It is used by 100+ large enterprises, small businesses and startups in manufacturing, retail, technology, financial services and media, across 25+ countries.