The rise and rise of reward and recognition

Employee RecognitionIf one word can define Reward and Recognition in the year 2014, it would be uncertainty. Ongoing economic caution is having an impact on how employers handle Reward and Recognition. However, as new trends emerge, it’s not all doom and gloom…

All engagement practices have felt the impact of belt tightening in 2014, but budgets have shrunk, especially in the reward space. In fact, there has been a marked shift away from spending on rewards and instead investing in robust recognition programs. Recognition, of course, can be carried out effectively with minimal outlay. Recognition is worth its weight in gold; formal and informal types of recognition don’t have to cost a lot, but the power of it is immense. “Research indicates that recognition on its own is more powerful than reward on its own,” says Alan Heyward, executive manager of Accumulate. “Together they’re even more powerful – but you give someone a reward, and it can be easily forgotten about, whereas recognition tends to be more long-lasting.”


A second trend seen throughout the year, and tied to the first, is employers becoming more creative in how they complement their existing Reward and Recognition programs. Popular items include senior mentoring programs. Bonus leave programs have grown in popularity – even simple touches like encouraging employees to take their full 20 days of annual leave a year and rewarding them with three or five bonus days. Health and wellbeing initiatives have seen an uptick – but these are typically not funded by the employer. Instead, the company will use economies of scale and the ability to leverage value from service providers to subsidise costs to employees.

Traditional employee benefits programs also have been refreshed, as employers look to tie benefits programs to their Reward and Recognition programs and to complement their wellness programs. “Engaging people in 2014 is a multi-faceted strategy. With less money to spend, companies want to spread it around and ensure they have something to offer to everyone,” notes Heyward.

Benefits trends include access to special offers, discounts and preferential rates on everyday spend categories: petrol, groceries, wellbeing and sporting goods. The reason, Heyward says, is obvious: “A 20% discount on a Gucci handbag is great, but how many Gucci handbags are you going to buy? Five per cent off groceries, on the other hand, can save an employee plenty over a sustained period of time. And you’re receiving that discount because of your employer.”


Technology has naturally played a role in increasing the sophistication of Reward and Recognition programs. Social recognition (recognition ‘walls,’ the ability to comment and give peers badges and ‘like’ peer posts, etc.) has been around for some time, feeding off the general population’s narcissistic desire to ‘show off’ to friends. An emerging trend is taking a leaf from how consumers are buying products and services online: They do their research; they read and write reviews and use interactive forums. “That’s where I think Reward and Recognition goes to next,” says Heyward. “It’s heading beyond just sharing ‘I’ve been recognised for good work’ with peers and colleagues; it’s much more interactive and involves wider dialogue about how people are feeling about engagement in their organisation. It’s social chatter as opposed to event-driven social recognition.”

This will require different tools and potentially hinges on whether recognition breaks through organisational confines and is able to ‘float’ outside and into the internet. “All of a sudden, me being recognised in my company goes onto my Facebook profile for the world to see,” says Heyward. “That has natural repercussions for the employer brand. Technology didn’t exist 10 years ago to enable us to do 90% of what we’re doing in Reward and Recognition programs today, so I wouldn’t be surprised if this integration with other social platforms is where it goes to next.”


Hay Group identified ‘individualism’ as a ‘megatrend’ for 2014 – that is, the expectation that corporate offerings will be tailored to suit age, socioeconomic status and so forth. Heyward notes that creating “real individualism” is significant challenge in the Reward and Recognition space, and one that is only partly being addressed today. “The investment required to create true individualism is not insignificant,” he says. Nonetheless, progress has been made: Reward and Recognition programs are now device agnostic, meaning they can be accessed from any technological device, and it’s possible to determine who someone is, where they work and what their preferences are, meaning relevant content can be sent to them.

However, with the ongoing tight budgets, compromises will be required. “How much do you invest in it when demands are being made to reduce spend?” says Heyward. “I think we’re in a pretty good space now – I’m not saying we’re there, but we’re in a good space to provide an individual experience when weighed up against investments being made.”

Originally appeared in Human Resources Director Magazine December 2014. Published with consent.

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