Rewards and Recognition ROI – Driving measurable results with employee recognition

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R&R RO-Why?

Employees recognized at least monthly are more engaged, productive, and loyal, so of course Total Rewards or compensation and benefits leaders are spending more on recognition and reward. So why do just 40% say it’s driving business results?

Read this one-pager for three challenges to proving ROI from recognition investment, and three pillars of a great recognition strategy.

For HR to be seen as more than a cost center, we must be able to connect people initiatives to overall business goals such as profitability, cost control, and growth.

What is the difference between total rewards and employee compensation?

The difference between total rewards and employee compensation is the difference between a single instrument in an orchestra and the entire symphony. The instrument on its own can make great music, but the richest experience comes from a well-tuned, well-practiced orchestra with an experienced conductor (that’s you!) Compensation is a vital component of total rewards, but the function encompasses all the elements that motivate and engage employees beyond just their paycheck.

What is the importance of total rewards for employee engagement?

The importance of total rewards for employee engagement is immense because it can increase emotional salary while controlling overall headcount costs. Employees with high emotional salary — that is those who feel adequately rewarded beyond just compensation — are more productive, engaged, and less likely to job hunt.

Total rewards and compensation and benefits leaders play an important role in identifying, implementing, and measuring the impact of various people initiatives. Some of the biggest levers for driving emotional salary include culture alignment, recognition, feedback, connection, and professional development.

How do you prove ROI of employee total rewards programs?

Prove ROI of employee total rewards programs by being clear on your objectives and how the program will impact them. For example, with employee recognition strategies, AWI recommends taking a crawl-walk-run approach. Initially your targets will be adoption and usage rates, then specific recognition frequency objectives. When you’ve got a strong culture of recognition, you can use your program to encourage and change behaviors to drive results at every level of the organization.

Why are employee recognition and reward programs important for total rewards?

Employee recognition and reward programs are important for total rewards because they improve employee, team, and business outcomes. When employees feel appreciated and valued, they are more likely to be engaged and motivated. Recognition doesn’t need to be expensive to have a high impact. Positive reinforcement of any kind will encourage the right behaviors to drive results: what gets recognized, gets repeated.

What are the main challenges for proving recognition’s impact on business results?

The three main challenges for proving recognition’s impact on business results are lack of visibility, tunnel vision, and a one-size-fits-all approach. Total Rewards leaders are missing information on recognition spend and impact, they’re treating recognition as its own lane within HR instead of a driver for other initiatives, and they’re implementing a generic program instead of tailoring it to their organization’s unique demographics and objectives.

Ready to get great results with recognition? Read the R&R RO-Why? one-pager for more information and the three core principles of effective recognition.