Six Steps to Employee Recognition ROI

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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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6
Steps for determining
theroianemployee
recognition Program

BIWORLDWIDE.com | Australia | Canada | China | India | Latin America | United Kingdom | United States
Can you measure the
ROI on employee
recognition initiatives?

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YESyou 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

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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

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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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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The number of recognitions,
per manager, that have
been given.

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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

BIWORLDWIDE.com | Australia | Canada | China | India | Latin America | United Kingdom | United States
Including these costs
will lower your ROI...
Labor
Materials

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6
Steps for determining
theroianemployee
recognition Program6
Steps for determining
theroianemployee
recognition Program
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The GOALS of the manufacturer and those of the distribution channel are often at odds. The channel wants to focus on high-margin products and increase total sales, while manufacturers want channel partners to promote the whole line and increase market share for the manufacturer’s brands. Channel partners want more autonomy and exclusive access to end users, while manufacturers want more control and their own access to end users. Partnerships help resolve these issues by enabling both parties to focus on end users’ needs and agreeing on strategies that build shared profit across the entire channel. Everyone has opinions about how best to segment and target channel partners. Ultimately the goal is dealer, distributor or customer loyalty but getting to that point often requires a variety of strategies. This chart shows a classic segmentation of dealers or dealer reps: New or low-performing reps who need simple onboarding strategies to support and engage their efforts. Lower-middle performers who may need training to find their fit with your brand or products. Higher-middle performers who have found a way to gain some momentum in your direction and should be rewarded for their efforts. Retaining top performing reps requires a mixture of all of these strategies, plus a healthy amount of recognition for their efforts. High performing channel partners demonstrate a variety of characteristics: They have clearly defined goals for representing your brand and selling your product. They have the necessary knowledge and skills. They are aware of how they stack up and how they can improve to meet their goals. They are emotionally engaged with your brand. They are focused on the right sales and marketing activities. They understand the relationship needs to benefit both partners. But what about the rest of your channel partners? You can reach out to middle performers and get them moving in your direction with a few simple strategies. But it all comes down to sharing common goals for success. Shared goals can only be accomplished through strong business relationships that demonstrate: A high level of trust A common understanding of marketplace issues Joint business activities Shared resources and best practices

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