Are You Wasting Your Investment in Employee Recognition: Part 2?

Early last week, Globoforce released the results of a survey showing, in part, HR leaders feel their programs fall short in driving bottom-line results. A staggering 42% of all organizations surveyed are not measuring their program’s results in any way, leaving CEOs in the dark on the effectiveness and true value of their recognition programs and effectively wasting the money invested.

Late last week, the Chartered Institute of Personnel and Development (CIPD) issued similar findings in its Annual Reward Management Survey:

• 46% of employers were not aware of total remuneration spend (benefits, base pay, variable pay and insurance)
• An astonishing 68% of organizations do not assess the impact of their reward practices
• Of those that do measure remuneration spend, 83% cannot break it down into categories of salary, variable pay and benefits.

Charles Cotton, reward advisor at the CIPD, had this to say:

“If organisations do not have a complete handle on where their staff spending goes, it makes it far more difficult to prioritise investment in the measures that will retain and motivate talented individuals. Reward, if implemented correctly, can engage staff at a time when pay freezes and redundancies are prevalent, boosting the chances of the organisations coming out of the recession in good shape to benefit from the recovery."

A hallmark of strategic recognition is saving organizations money by carefully targeting the funds invested in recognition to boost morale and productivity. How important is this? Accountemps, a US recruiting firm, recently conducted a survey of senior executives, finding “failure to recognize employee achievements” ranked second only to communication as the thing that had the most negative impact on employee morale. Similarly, senior executives recognized recognition as a best remedy for low morale, again second only to communication.

What this all tells me is senior executives acknowledge the importance of recognition to boost morale and performance. Yet they are also unaware of their investment in the means to recognize employees and have no measurement or proof of success of those investments against goals.

Now is not the time for companies to spend good money after bad on investments they are not even fully aware of. To realize the full return on your investment in recognition, you must have a program that aligns with and reinforces your corporate goals and objectives, reports on progress against predetermined metrics, and meets employee needs for recognition of their efforts in this stressed time.

Are you investing in recognition programs today? What is your current level of investment? Are you seeing the return you need? Tell us in our weekly poll.