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Can you measure ROI on employee recognition Initiatives? It’s a question that always comes up when companies are considering starting an employee recognition program or questioning if they should continue implementing a program. It’s a valid and important question. Depending on the size of your organization, you can be spending an average of $125 to $175 per employee per year on award costs and another $50 to $75 per employee per year on administrative costs. For an organization with 10,000 employees, that’s an investment of up to $2,500,000. Of course, your CEO and CFO will want to know what they are getting for that kind of money. If you can’t answer that question, your employee recognition budget could be the first thing on the chopping block when budgeting time comes around. So how do you measure return-on-investment for a rather subjective initiative focused on recognition? Follow this six-step process to determine the ROI of an employee recognition program. http://www.biworldwide.com/white-papers/employee-engagement/determining-the-roi-of-an-employee-recognition-program http://www.biworldwide.com/
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6StepS for determining
the roI an empLoyee recognition program
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Can you measure the roI on employee recognition initiatives?
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YES you can, but first you have to define what’s important to measure.
Can you measure the roI on employee recognition initiatives?
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Here’s the six step process to follow:
Start with defining your recognition objectives.
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1
Common objectives include:
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Increasing productivity
Common objectives include:
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Increasing productivity
Reducing customer service complaints
Common objectives include:
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Increasing productivity
Reducing customer service complaints
Improving morale
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your program may also positively impact other objectives, but if you focus on one or two, you’ll find it easier to create a defensible ROI.
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Identify the key metrics that align to your objectives.
2
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Identify the key metrics that align to your objectives.
2
Use measurements you already have in place.
establish a control group.
3
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The control group can be a baseline period to use for comparison.
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The control group can be a baseline period to use for comparison.
This adds credibility to your final ROI calculations and results.
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Define and communicate behaviors.
4
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5
Set realistic expectations.
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you should reasonably expect not to see any significant change for at least six months against your key metrics and it could be as much as 36 months.
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Focus your measurement on tactical results such as:
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Percentage of managers who have participated in program training.
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Percentage of managers who have participated in program training.
The number of recognitions employees have sent their co-workers.
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Percentage of managers who have participated in program training.
The number of recognitions employees have sent their co-workers.
The percentage of employees who have recognized a co-worker.
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The number of recognitions, per manager, that have been given.
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The number of recognitions, per manager, that have been given.
Percentage of managers using thier discretionary awards budget.
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Calculate all of your program costs.
6
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Including these costs will lower your roI – and increases your credibility when management understands that you are being completely transparent.
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Including these costs will lower your roI...
Labor
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Including these costs will lower your roI...
Labor
Materials
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Including these costs will lower your roI...
Labor
Materials
Training
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Including these costs will lower your roI...
Labor
Materials
Training
Presentations
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6StepS for determining
the roI an empLoyee recognition program6StepS for determining
the roI an empLoyee recognition program
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BI WorLDWIDe uses the principles of behavioral economics to produce measurable results for our clients by driving and sustaining engagement with their employees, channel partners and customers.
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