Recognition Programs Declined in the Recession

The title of this post was a heading of an article in the May/June edition of Incentive Magazine.  Is anyone surprised that companies reduced recognition budgets or discontinued programs altogether when the company was going through bad economic times?  Seems to me that when you are laying off part of your workforce those types of reductions would be appropriate. 

These programs get reduced or cut because management really doesn’t see them as strategic ways to improve the performance of their employees.  Even worse, they see them as nothing more than a cost without an appreciable return.    

However, from a macro level, the Incentive ResearchFoundation, on several occasions, has attempted to draw a strong relationship between employee recognition and improved bottom line results.  While research on this has never been conclusive, research on defined incentive activities does have empirical evidence to support that expense.   

What’s the difference?  In our opinion, the recognition award industry is top heavy with companies that do a wonderful job of implementing award programs that drive companies to recognize performance.  These companies however lack the experience to implement incentive activities that include the design research, training, communications, measurement, feedback, and awards that will drive incremental results.  These results can be measured, an ROI can be formulated to show bottom line results.  Therefore, the recognition programs fade in dire economic times and incentive programs tend to be retained to drive results in these down times.   

In the above article, there is a telling paragraph that supports our opinion…

“Fifty-two percent of respondents “believe” senior management views recognition as an investment rather than an expense, but just 11 percent of the organizations measure the return on investment of recognition programs.”

“Believing” your program is an investment is the management thing to say, but it doesn’t keep them from being reduced or eliminated.  It is easier to retain these programs when you know it does produce results.  Measuring the performance of recognition programs has always been their Achilles heel!

Related Articles:

Reducing Employee Recognition

Employee Recognition ROI Calculator

Working Harder, Getting Paid Less

http://www.awardofchoice.com/blog/2011/06/working-harder-getting-paid-less-enjoying-it-less/