How to Find Money for Employee Recognition

Looking for the best way to reward employees? Here is how to find the money for employee recognition and some non-financial perks.

Bookmark(0)

No account yet? Register

Successful black businessman looking at camera celebrating success got promotion

Employee recognition is one of the easiest ways to boost productivity and reduce turnover. Every year United States employers spend over $100 billion on employee rewards.

But there’s a problem. At least 87% of recognition programs focus on tenure, and only 58% of employees know that recognition programs even exist.

At the same time, employers aren’t sure as to what constitutes effective recognition. Money, whether it’s in the form of gift cards or bonuses, is always a strong motivator. However, finding room in the budget can be difficult. And is that really what employees want?

What defines meaningful employee rewards

It’s important to redefine how employees define meaningful rewards before getting into what type of rewards to give. Studies have shown that employees prefer rewards and recognition that:

  • Are linked to good work
  • Feel spontaneous
  • Offer “experience” value — such as travel or merchandise
  • Provide opportunities for growth

In addition, a Gallup poll revealed that the best frequency for recognition is at least once per week.

It’s clear that items such as travel, merchandise, or even additional training are all items that cost money behind the scenes. While there are non-monetary rewards that can help you provide recognition more often, you first need to understand how often you give monetary rewards. And for that, it’s time to dig into the budget.

Finding more money for your employees

While you begin to poke around and rearrange your budget, you may want to give your employees a chance to tell you what they want. Give them a survey about what type of recognition they prefer, so you know what to plan for and how much money you may need.

Next, you need to review two types of rewards that relate to company finances:

  • Direct costs: travel, lunches, perks, gift cards, etc.
  • Indirect costs: Extra PTO days, longer breaks, etc.

You’ll want to leverage both of these to make the most of your budget. It’s also important to remember that while these upfront costs may seem expensive, an efficient rewards program can potentially make up for it in productivity and increased revenue.

Now, since it’s ideal to recognize employees weekly, it’s clear that providing big financial rewards isn’t practical. You do not need to say when you’ll be giving these awards since an employee’s best work isn’t predictable. Instead, you may want to sort out a list of employees and try to allocate one direct and indirect reward per year, at least. That can help you set the initial budget.

While these upfront costs may seem expensive, an efficient rewards program can potentially make up for it in productivity and increased revenue.

You may decide to use these financial, big-ticket items around ket events, like:

  • Holidays
  • Birthdays
  • New Year
  • Quarterly updates
  • Company milestones or anniversaries
  • Monthly recognition programs

Typically, businesses set aside 1% of their budget for employee rewards. Suppose you know about initiatives to cut down on costs in different departments, such as automating different processes. In that case, you can ask that some of these savings be redirected to employee engagement and retention efforts.

How to give employee recognition

When recognizing your employees, it’s essential to follow a few rules of thumb:

  • Let them know why they are receiving a reward
  • Highlight their success to the team if it’s a big win
  • Ensure that rewards for team members are equitable to prevent unhealthy competition
  • Make sure to find time during the year to reward every employee

For weekly check-ups and general praise, you may only need to tell the employee involved. You may also want to get peer-to-peer recognition involved through a “kudos” box or another anonymous warm up.

8 ideas for non-financial recognition

After you’ve decided on your monetary rewards, it’s time to look at other ways you can shower your employees with recognition. There are countless ideas of how you can show your appreciation and engage your employees — but these are our top eight. All of them are quick and easy wins that will ensure your employees feel cared about.

1. Praise

When you notice an employee doing their job well, give them a thumbs up or a kind word on the spot.

When you notice an employee doing their job well, give them a thumbs up or a kind word on the spot. This is probably the most apparent form of non-financial recognition — after all, words are free. You’ll also want to highlight their positive performance during reviews.

2. Job titles

It’s not always possible to give promotions or bonuses. But sometimes, leveling up a job title is a good way to show that you see an employee’s dedication and hard work. Higher job titles seem like a small shift of hand, but it may help your employee advance their career down the road.

3. Special projects

Another way to show support is to give your employees additional responsibility — usually with a special project. This can be a side project that supports the team and allows your employee to use their strengths. Or it could simply be something to help them boost their resume and advance their career.

4. Handwritten notes

Sometimes a simple handwritten note is all you need. It may seem a little old school, but the personalization of the note can make it just as effective as spoken praise. And it’s something that your employees can keep.

5. Attention

Another simple way to give recognition is to simply listen and engage with your employees. This includes paying attention when they speak about their goals and personal life and when they are providing feedback. Sometimes just feeling listened to is enough.

6. Flexible work options

While not every employee can work from home, some employees appreciate flexible time schedules and remote work options. If you know that a significant portion of your office prefers remote work or will come in and out of the office, you can also optimize your space and potentially reduce office costs.

7. Family invites

If you are hosting an event, don’t forget to extend the invitation to your employee’s close family. This provides additional incentive for workers to attend the event and makes them feel more appreciated.

8. Customer praise

Finally, if you receive a review from a customer or overhear positive comments about your employees, share these words of encouragement with the team. While recognition from the boss is important, employees also want to know that their work is appreciated.

Bookmark(0)

No account yet? Register

Might also interest you