Study Finds Lack of Employee Recognition Program ROI Tracking Metrics

by: Nichole Gunn August 18, 2011

In difficult economic times, employers are forced to make changes to the benefits they offer their employees; unfortunately this has an affect on employee engagement and performance.

In line with this, the Society for Human Resource Management conducted a recent study which revealed 8 of 10 businesses utilize worker recognition initiatives as means of engaging and motivating through employee rewards incentives. Along with this, 99 percent of the respondents view employee engagement as key concern or obstacle that will need to be addressed throughout the next five years.

The global survey consisted of human resources (HR) experts and managers, and 750 of them cited acknowledging workers for the number of years on the job. Forty-three percent of the respondents noted providing reward incentives to employees who generated revenue for the company, and 37 percent recognized workers for following company values through related actions and behaviors.

In regard to the completion of work projects, almost 50 percent noted recognizing workers who performed above par on unexpected projects, while only 10 percent cited recognizing workers who produced high quality results on the completion of regularly scheduled work projects. Workers who completed regularly scheduled projects quicker than anticipated were only recognized by 2 percent of the respondents.

Additional results from the survey demonstrates that just over 50 percent of the participants cited that their companies’ supervisors and managers don’t effectively appreciate or recognize employees, 44 percent felt employees are not rewarded for job performance, and over 66 percent felt workers are not satisfied with recognition they receive on the job.

Focusing on the return on investment (ROI) for recognition programs , the study found a lack of metrics tracking. Eight-seven percent of participants cited that their company didn’t monitor the ROI on the programs, and over 75 percent acknowledged that measuring a program’s effectiveness can be problematic.

The cause of this situation seems to be a result of difficult and continually changing success-rating metrics, according to almost 33 percent of the respondents. Thirty-three percent also noted a gap between performance and talent management systems and recognition programs. This results in a lack of numbers and knowledge as to how employee retention and performance is affected by employee recognition programs. Twenty-two percent noted that their companies’ recognition programs don’t provide the valuable metrics that company leaders need, 20 percent recognized that the programs focus only on end-results, not on the strategies that lead to the results, and 15 percent noted they didn’t have the knowledge to determine which metrics were needed to effectively measure the ROI on their programs.

Without effective metric strategies in place to accurately measure the ROI on recognition and reward programs, a company will not be able to determine which initiatives are the most effective and which are the least effective. Since employee recognition can be in the form of gift cards, paid time off, travel incentives, bonuses, and a number of other incentives, it’s important for business leaders to know which strategies are producing the highest ROI, so they can tweak their programs where needed to design the most successful program possible.


About Nichole Gunn

Nichole Gunn is the VP of Marketing at Incentive Solutions, an Atlanta-based incentive company that delivers advanced, agile B2B customer loyalty and channel sales incentives programs.