Implementing an employee recognition programme should have a direct impact on your organisation’s bottom line, through improved engagement and working culture, but how should you go about measuring this?
The purpose of this guide is to help you set performance measures that justify spend on a formal recognition programme and quantify success to senior management.
So how can you measure whether employees are really more motivated in their work and are performing to a higher level? Or harder still, how can you measure whether the working culture has changed, whether people enjoy coming to work and therefore, are more likely to go the extra mile and less likely to leave?
To make a measureable difference to employee performance through recognition it is essential to identify your objectives prior to implementation. You must then ensure that it is possible to measure the direct impact of your objectives in order to determine whether implementing the scheme has been a success.
Be sure to measure more than just sales success. As Linda Thornburg noted;
“Performance measures in a rewards programme have to be linked to an overall business strategy…. Most reward programmes use multiple measures which can include such variables as improved financial performance along with improved customer service, improved customer satisfaction, and reduced defects.”
Potential measures of success include:
- Employee engagement survey improvements (conducted at regular intervals throughout the year)
- Reduced rates of staff attrition
- Improved product knowledge (measured through online educational modules and testing)
- Number of innovation suggestions put forth (recognition schemes can incorporate idea generation)
- Reduction in absenteeism
- Net promoter score gains (or other customer satisfaction/feedback measures)
- Volume of recognition sent that is aligned to particular company values
- Volume of recognition received that demonstrates desired
Anonymous questionnaires can also reveal a lot about how your employees really feel. Ask questions before the scheme starts, 6 months in and again 1 year later so that it is possible to measure the difference. Ensure employees are given a scale to mark their answers against, rather than simple ‘yes/no’ questions, as this can help to see how much the culture has improved, giving you valuable feedback and making these tricky questions measurable.
Attract and Retain Talent
It is important to benchmark against your competitors. There is little point implementing a recognition scheme that doesn’t offer comparable rewards to those your competitors are offering. This could result in the scheme having an adverse affect on motivation, and could encourage employees to jump ship to work for another company that they probably feel ‘appreciates them more’.
Using Scheme Data
Once up and running, be sure to use the data available from your recognition system to assess uptake and address any issues.
System data can be a valuable means to assess key aspects of engagement, such as:
- Manager to employee relationships – what percentage of each team has been recognised and how often?
- Team bonding and cross departmental networking – how many internal ‘thank yous’ have been sent by team members to their peers within their immediate team and colleagues in other departments?
- Driving behaviours – how many recognition notes have been aligned to your desired behaviours or company values? Which of these behaviours/values are most often recognised and which may require further education?
- Pockets of disengagement – can you identify poor usage of the programme in particular areas of the business?
Set a monthly or quarterly target against these, for example:
- 50% of employees to receive at least one ‘thank you’ per month
- 30% of employees to send a ‘thank you’ each month month
- 90% of ‘thank you’ notes sent to be aligned with a company value
- 20% to be sent cross-departmentally
You may also choose to have a measure based on number/percentage of visitors to a particular landing page on your recognition portal, such as internal news, product guides or details of your company values.
It is imperative to the success of any recognition scheme that communication is well thought through and regular. The motivation and engagement of employees in any initiative is generally dependant on whether they know exactly what is expected of them.
Therefore, when considering scheme measurement, be sure to include regular review of your communications plan. Review website analytics, email campaign results, response rates to direct mail campaigns and website logins immediately following distribution of material, to assess whether your efforts are having the desired impact.
Want to know how to set up your own employee recognition scheme?
Cost Vs Return
Recognition schemes need to change employee behavior. Implementing any formal programme will incur some cost to your organisation, so it is important to be able to prove any return on investment.
There is a large body of evidence demonstrating the results that can be obtained by implementing a well structured and measurable employee recognition scheme.
Regular recognition improves engagement – recognition is a vital tool in delivering the four key enablers of engagement. Yet, we estimate that an organisation of 500 people could be wasting £2.4m a year through lack of engagement. Just a 3% increase in engagement, with a linked 1% reduction in Absence and Retention could reduce this by £526,000 and impact on customer service and revenues.
Take a look at our employee engagement calculator to understand the true financial impact of your organisation’s current level of engagement.
Ultimately it is the job of the HR professional implementing the scheme to work out what it is that needs to be achieved and what targets to set in the beginning. Whatever scheme is chosen, it is imperative that it is regularly measured, communicated and revived to keep it alive.
A motivated workforce is a highly productive workforce with happy customers, which ultimately will help towards achieving your business goals, it is therefore necessary to ensure that employee recognition is regular, timely and carefully considered.
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