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 necessary funding and other approvals.
Also read: Common Misconceptions about Employee Recognition Platforms
To start off 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.
28% of employees have acknowledged the recognition from their immediate superiors as the most powerful form of recognition.
The results of research by Gartner have revealed that positive peer feedback can help in enhancing employee performance by 14%.
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.
Overall, 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 companies financially.
The HR team needs to build a solid business case for employee recognition by presenting verifiable fact.
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 the organizational values helps build the desired work culture within the organization, which can provide long-term benefits to the organization.
Generally, most organizations are averse to the idea of implementing an employee recognition program because they believe them 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 cone can be highly effective ways of recognizing employees.
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.
All in all, the significant role played by such programs in boosting talent retention rates and building a strong employer brand to attract great talent from the market should also be emphasized.
HR teams should thoroughly research 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 functionality of these platforms should be carefully assessed to match the needs of the program and ensure smooth integration with existing systems.
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.
Additionally, HR Teams should also try to present case studies of other organizations who have benefited from such programs. Case studies of industry peers would have added advantage. Moreover, to provide a balanced perspective, they could also share case studies of programs that failed and the lessons learnt.
Building an effective business case for employee recognition by clearing articulating it benefits is a critical step for HR teams to secure the approval from their management to implement employee recognition programs in their organizations.
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