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Employee Recognition Programs

A WorldatWork and ITA Group survey report recently released, "Trends in Employee Recognition 2013," shows that for the first time in the survey's 11-year history, programs to motivate specific behavior jumped to a top-tier goal, cited by 41% of organizations in 2013 vs. 25% in 2008.

"Employers are increasingly focusing their recognition programs on employee behaviors -- for example, collaboration, teamwork, creativity and problem-solving -- and are even expanding them to include health-related behaviors," said Rose Stanley, CBP, recognition practice leader for WorldatWork.

While length of service, above-and-beyond performance and peer-to-peer recognition remain prevalent goals for recognition programs, the increase in organizations aiming to motivate behaviors marks the most notable change.

"Organizations, while not moving away from legacy recognition programs, are investing more in recognition programs that can drive business results," Stanley said. "We are beginning to see a trend where wellness and recognition programs to motivate specific behaviors are starting to intersect. We expect this intersection to become more pronounced as a way to drive health-care costs down and increase productivity."

This data is particularly timely as organizations review their wellness programs in light of the final rules recently released by the Obama administration governing employer-sponsored wellness plans under the Patient Protection and Affordable Care Act of 2010. The new rules give employers some degree of flexibility to design successful wellness plans within certain limits. Employers will need to familiarize themselves with the new rules as they design wellness plans or recognition plans with wellness incentives that take effect on or after Jan. 1, 2014.

"The 2013 data shows 70% of organizations offer between three and six different recognition programs, but the sustainable impact on both behaviors and the overall business varies across program types," said Jaimee D. Chism, employee loyalty practice leader, ITA Group. "Smart organizations are leveraging recognition programs as agile and flexible tools to align employee behavior with what positively impacts their business today."

Other key survey findings:

  • Budgets: Organizations continue to budget for recognition programs at an average of 2% of payroll. Nearly 1 in 3 respondents said they budget exactly 1% of payroll. Recognition budgets are either centralized (39%), held in each department (17%) or split between the two areas (44%).
  • Management support: 41% of respondents feel a high level of support for recognition programs from senior management, up from 37% in 2010. 46% believe senior management views recognition as an investment rather than an expense.
  • Metrics: Organizations measure program success using: employee satisfaction surveys, participation rates, number of nominations, turnover, productivity, customer surveys and return on investment (ROI). Only 10% of organizations measure ROI on their recognition programs.

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