How Much Should You Budget For Employee Rewards & Recognition?


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How Much Should You Budget For Employee Rewards & Recognition?

The average budget for employee recognition is 2% of payroll, and the median amount is 1%. [1]

Considering these statistics, an employee recognition and rewards program will cost you ~$100 per month per employee. (calculation based on average $60k yearly salary per employee)

Benefits of Giving Employee Rewards

Companies give their employees rewards and recognition because of the following reasons:

  1. Better customer service arising from better employee engagement
  2. Employee retention that lessens recruitment cost
  3. Enhanced adherence to protocols that reduce absenteeism and workplace accidents
  4. Improves organizational culture and employee well-being
  5. Increased productivity due to employee motivation

Steps in Creating a Reward System

To create a reward system for company employees, management undertakes certain steps, as follows:

  1. Identification of group or company goals that's supported by the reward system;
  2. Naming the desired worker performance that will strengthen the company's objectives;
  3. Determination of main performance measurements founded on the person's or group's earlier achievements;
  4. Determination of proper rewards; and,
  5. Communication of the program to the staff.

Business Reward Cost Factors

There are many factors that will increase the cost of employee rewards:

  1. The design or nature of the reward and recognition program.
  2. Age of workers. (A firm with older workers may have increased health costs).
  3. Gender of workers (Women may have higher insurance premiums than men).
  4. Lifestyle of Employees

Examples of Rewards Most Preferred by Employees

Rewards and recognition can be anything from a simple pat at the back of the excelling employee. Other than that, there are some other forms of rewards that employees appreciate getting from their immediate supervisor or the company, such as:

  1. Clothing or stuff with company logo
  2. Free monthly subscription of magazines or consumable products
  3. Company-paid online course to learn a new skill
  4. Premium or upgraded office products
  5. Company-sponsored yoga classes
  6. Lunch coupons
  7. Tickets to concerts, movies, sports games, or a festival
  8. Sponsor a team or employee in a marathon or a contest
  9. Giving a transportation budget for a week or month
  10. Free team lunch
  11. Spotify or Grammarly Premium subscription
  12. Paid day off
  13. A long lunch break
  14. Cash or gift checks
  15. Dinner with the immediate supervisor
  16. Parking space
  17. Get free training as preferred by the staff
  18. Tech accessories, such as a headphone, tablet, speaker, or smartwatch
  19. Company-paid weekend holiday with the family
  20. Healthy snacks at work

Employee Recognition Software Platforms for Rewards Programs

Considering that we are in the digital age and businesses would like to cut costs, there is now a growing demand for employee recognition software. These were created to assist companies in retaining talent, building culture, and measuring essential intangibles like staff morale.

Factors to Consider when Choosing an Employee Recognition Software Platform

Since the software platform recognizes employee attainments and even provides gifts for birthdays and other special occasions, companies should consider the following when choosing which platform to use.

  1. Compatibility with company systems

  2. Clear identification of recognition against rewards

  3. Security

  4. Ease of use and scalability of the software

Best Employee Recognition Software Platforms and Rewards Programs

15five

Elevates the performance and engagement of employees by continuously asking questions and starting the right conversations.

Businesses using 15five:

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kazoo

Kazoo

Motivosity

Motivosity

References

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