The IRF Budgeting for Recognition Toolkit: Calculator, Templates, Guides and Resources

Recognition programs ​have wide reach, so they can motivate broad-based employee behaviors.​ They answer the universal human need for appreciation. Everyone can qualify and, ideally, the great majority of employees will receive at least some recognition. Recognition programs encourage behaviors that incentive and reward programs might miss, such as exemplary customer service, collaboration, and learning. These behaviors boost engagement, reduce employee turnover, improve productivity, build corporate citizenship, and create a robust culture.

It is recommended that organizations spend 1.5-2% of payroll to fund their social recognition program. This includes all costs of the program, from its design using professional advisors, the platforms and technologies involved in managing and measuring recognition programs, all necessary administration and training costs, and the small rewards, points or other tangible tokens of appreciation that may accompany recognition.

Of course, 1.5-2% of payroll is only a rough benchmark. Economies of scale operate as firms grow, lowering costs, but firms might increase their efforts and budgets in times of change or crisis recovery. Each organization should use the information and tools below to estimate the budget requirements for their recognition program based on their unique circumstances.

This toolkit focuses on offering actionable information and instruments to help program owners budget for a recognition program. The information within is grounded in best principles – those that organizations have applied successfully. However, we do not suggest that practices in one organization can or should be cut and pasted into another. The tools we have selected and developed are accompanied with explanations and context so that you can determine what might apply to your organization and how it can be adapted to work in your context and culture.

The toolkit is not intended to offer a comprehensive, do-it-yourself resource; rather to provide information and tools to budget for and build a business case for broad-based employee recognition programs. Recognition program designers can use this toolkit internally, or in advising their clients on how to improve employee engagement, retention and performance through broad-based social recognition programs. This may be especially important in the current pandemic-recovery context where many organizations are struggling to return to productivity and to satisfy burgeoning customer demand with fewer people, even while large numbers of employees expect to be permitted to work remotely and flexibly.

Section 1: The Business Case: Effectiveness data that can be used to sell the concept to leadership for approval and budget allocation

Section 2: Design Factors for Recognition Programs: What needs to be considered categorically to design an effective program

Section 3: Budget, Measure, Analyze: Includes an online budget calculator, example metrics against correlated measures, and ROI.

Section 4: Additional Recommended Resources