Employee Rewards and Engagement Research

Employee Rewards & Recognition Research Findings 2021

HR Professionals Prioritize Recognition Despite Challenges of Participation, Leadership Buy-In. 

As HR professionals respond to the repercussions of the pandemic (more prevalent remote work, social tensions, and “the Great Resignation”) this year’s survey findings highlight leadership, participation, and reward choice as key players in making rewards and engagement more powerful. 

Overview

Key Findings

Widespread, Yet Ineffective

Even though most organizations have some kind of recognition program, 81% of HR leaders don’t feel it’s very effective.

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Budget Shmudget

HR professionals have more influence than they realize to effect change with recognition—and it’s not about budget.

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Once a Year is Not Enough

Realizing the true potential of rewards and recognition means recognizing employees for more than anniversaries.

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Recommendations

CHRO’s focusing on changing their organizational culture through rewards and recognition should:

1. Attract, Recognize, Retain

Recognize that employee recognition is an essential part of engagement, and that building a powerful program will benefit an organization’s ability to attract, train, and retain talent far into the future—even in uncertain times.

2. Invest in Effort, Not Budget.

Avoid the pitfalls of using budget as an excuse for inaction. Data suggests money is not the primary barrier to recognition effectiveness. The majority of problems HR professionals may be facing are directly within their realm of influence.

3. Retention is Ongoing

Build a program that includes more than just service milestone awards. Recognition once a year is better than nothing, but leaders must recognize employees for more than surviving another year at their company.

Key Finding #1

Doing a Lot Without Getting a Lot

Get more out your recognition programs.
Even though most organizations have some kind of recognition program, 81% of HR leaders don’t feel it’s very effective.

There are many reasons why a recognition program may not be effective. Survey respondents noted many reasons as to why their programs aren’t as effective as they want them to be, and chief among these is the fact that 52% of HR professionals feel that recognition is not frequent enough.

Recognition frequency is an issue for many organizations. Most companies with any kind of recognition program at all only have a method of celebrating service anniversaries, which seems to be the most common form of recognition. In fact, 71% of HR professionals say their company has a service award program, and 74% say their organization recognizes employees once a year. It’s a good bet that one time is a service anniversary.

Adding to the issue of frequency is the challenge of finding rewards employees will value. 57% of HR leaders mention reward choice as their main roadblock. They may be recognizing and rewarding employees, but that communicated value isn’t getting through to the employees themselves. One Awardco client reported similar findings with lackluster awards from their previous reward vendor.

Over half of employees who were given traditional awards to celebrate their service anniversaries left those awards on their desk, or in the trash, when they retired..

Leadership buy-in also seems to be a perennial challenge for HR leaders. While recognition might be seen as valuable, it isn’t seen as a necessity by much of executive leadership. 50% of survey respondents said that they’ve encountered difficulty getting leadership to sign on, which shows how prevalent this issue can be.

Recognize all year.

Recommendations

  1. Increase recognition program effectiveness by increasing recognition frequency. Balance timely service anniversary awards with other celebrations like birthdays, employee appreciation day, holidays, and spot recognitions.
  2. Convey appropriate value with the rewards your organization offers. If your company only offers a handful of items at extreme markups, employees won’t feel valued. Provide as much choice as possible in rewards so employees feel truly cared for.
  3. Get leadership buy-in by providing value without needing extra budget. Not every recognition program needs more budget behind it to fuel success. Encourage leadership and manager participation in recognizing employees so they can see first-hand the power of recognition—and employees will feel even more valued when their managers are involved. 
Key Finding #2

Do What You Can

HR professionals have more influence than they realize to effect change with recognition programs—and it’s not only about budget.

All too often leaders in any organization are fixated on monetary needs to push forward any initiatives. This is a deeply ingrained behavior learned over time, one that stems from oft-repeated challenges in gaining budgetary approval for anything but the bare HR necessities. It’s how business seems to work: almost nothing is free, and things that ARE free don’t provide the same return. Not true for recognition!

In looking at the most pressing issues that HR leaders experience when managing rewards and recognition programs, there is a common thread. Each one can be solved creatively without any need for more budget:

#1: Finding rewards that team members will value.

Survey employees and find out what items they would most value. Many services online offer free survey capability, and HR leaders can create something simple that employees can answer in a matter of minutes. Good information leads to good inspiration—and will help you make better decisions on where to direct the budget you already have.

#2: Maintaining or increasing program participation.

Working within your existing recognition program, consider adjusting the emphasis put on recognition in manager trainings. Make sure managers understand the importance of recognition and what it can do for their teams (like boosting retention 63%). Recognizing managers themselves is a good way to kickstart adoption. Consider sharing that when managers participate in recognizing their teams there is a discernible business impact, not to mention they’ll likely find their teams are more cohesive.

#3: Getting executives on board.

A lack of executive support in recognition programs often stems from unclear or miscommunicated objectives. If leaders don’t understand the importance of recognition, or how it can impact their organization, they’ll be less enthusiastic about supporting such a program. If you’re encountering this in your work as an HR professional, consider revamping your program in small ways. Build a business case for how a refreshed recognition program will change the organization.

Recognition can boost retention by 63%.
#4: Effectively using the current budget.

Leaders in any organization are not in their position to exclusively say no to all programs or initiatives proposed by managers. However, good executives certainly should say no to programs that waste company budget and resources on ineffective initiatives. To that end, HR leaders can increase their effectiveness, and that of their programs, by auditing their current budgets and ensuring that the money is being used most effectively—and then showing those results through tracking and reporting. A simple value-driven recognition program can show the repeated behaviors that are being displayed as a direct result of the budget they are spending on such a program. This will show leadership that HR is dedicated to being efficient as well as helpful, and will increase the likelihood of future budgetary approvals.

Recommendations

  1. Do what you can with what you have as an HR leader. Realize that even little improvements are just that: improvements.
  2. Not every new initiative needs more budget, and if you can do more to recognize and reward your teams while still operating under constraints, you’ll be setting yourself up for big wins in the future.
Effectively use the current budget.
Key Finding #3

Retention is a Year-Round Concern

Leaders in the rewards and recognition space recognize employees for more than just service anniversaries, and provide reward choice that truly rewards.

HR professionals that report having effective rewards and recognition programs are 2X more likely to have multiple recognition programs outside of service awards. The benefits of an effective rewards and recognition program are many, such as an engagement boost of nearly 2X, a 31% reduction in turnover, and a significant increase in employee happiness.

To enjoy these benefits and many more, it’s important that HR leaders have more than one recognition program. Recognition programs can take many forms, but spot recognition programs are the most effective at conveying value and gratitude to employees, and are most effective when paired with other program staples such as service anniversary awards.

More choices means more value.

Furthermore, HR leaders with effective programs report offering rewards that employees value. In fact, organizations with the most effective rewards and recognition programs have employees that are less likely to say their reward options are lacking. The message is clear:

Providing choice for rewards conveys value and increases employee satisfaction.

When considering other recognition programs, it can be easy to say that you just don’t have the time. Perhaps it may feel like there are already too many issues with your current program and introducing more than one program would merely decrease any effectiveness at all.

The data tells a different story, one that shows that organizations with more than one program actually experience 4X fewer issues pertaining to rewards and recognition. This includes negative feedback from employees, lack of leadership buy-in, and lack of overall effectiveness. More recognition and rewards leads to less problems with rewards and recognition—and multiple recognition programs can be easily consolidated into one central management tool like Awardco.

Awardco can help you get started where you are.

Recommendations

  1. Start where you are. If your organization doesn’t have any recognition and rewards program, consider starting at the most basic level with service anniversary awards. If that foundation already exists in your company, build on it with additional programs that are widely applicable such as meaningful birthday recognitions, employee appreciation day, or even a simple program to recognize when company values are demonstrated by an employee. If you’re ready to see your programs really take off, implement a spot recognition program to highlight good work every day.
  2. Let employees participate in recognizing each other. This will not only increase participation but effectiveness of the programs. Often coworkers know much more about the effort their fellow employees are giving, and being able to recognize them for that will show everyone else that value given is value seen and appreciated. Leadership will see it too—and will have insight into the daily operations of their organization they may not have had before as they read through the recognitions given from employees to employees.
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Methodology

Awardco’s 2021 Rewards and Recognition Survey

  • The purpose of this survey was to understand the current priorities and experiences of HR professionals to help clients determine benchmarks and best practices for the future.
  • The research was conducted online from May 2021 through July 2021 among 253 respondents in the United States.
  • Participants were required to have some involvement in decisions surrounding influencing their organization’s recognition and rewards programs in some fashion.
  • Respondents came from organizations ranging from less than 50 employees to well over 3000, including industries such as manufacturing, non-profits, financial services, healthcare, tech, transportation, and government.
  • The survey was developed collaboratively by Awardco and a team of analysts from HR.com. It was reviewed, tested, and administered by HR.com’s research analytics team. 

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