Metrics Guidance: How to Measure Recognition Success

HR Focus, the monthly publication of the Institute of Management & Administration, Inc., published an article on “How to Go Strategic with Benefits and Pay – and Meet Company Goals” in its June 2008 issue. This is a terrific, detailed article on how to measure the success of total rewards packages as well as individual elements of a rewards package – and how to figure out the metrics necessary to do so.

I am particularly pleased to see the very strong emphasis the article places on using your organization’s strategic plan to “guide the planning, structure and expenditures on benefits and pay so that the total rewards program is in line with the corporate goals.” This is the foundational tenet of a strategic recognition program and absolutely critical to get right.

The article goes on to discuss metrics that are meaningful to corporate management when evaluating the success of total rewards initiatives. This advice is equally applicable to measuring the success specifically of a strategic recognition initiative. I paraphrase this advice as metrics that should:

1) Reflect what’s important in the corporate culture
2) Measure significance relative to the employer’s strategic goals such as changes in productivity, cost and retention, which are more related to strategic values
3) Show how certain rewards drive employee performance
4) Demonstrate how the metric used to measure this performance is linked to the organization’s financial statements and corporate goals

When proposing any new investments in employees, such as with a strategic recognition program, showing how that program will be strategically measured against established corporate goals is critical to securing executive buy-in and, ultimately program success.