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Sp r i n g 2021 • forwardHR | 15 REWARDING EMPLOYEES An ongoing battle Determining the ROI of recognition programs By Joe Cull, Vice President, Royal Recognition, Inc. M ore than ever before, organizations are finding ways to motivate employees and improve performance in the workplace. While the positive effects of recognition programs may be apparent to human resource or hiring managers, measuring and displaying the results to administration can be a struggle. At some point, HR managers will be asked to explain the benefits of the initiative or the program may be eliminated. Below are five simple steps to assure administration their investment in recognition programs have a significant impact on their bottom line. As is the basis for every great presentation, consider the fundamentals and plan ahead. Every ROI analysis involves an inclusive framework of various data collection points. Begin mining for data as early as possible — perhaps even as human resources sends out the first round of recognition — for the most detailed and interesting demonstration possible. 1. Define a baseline measurement. Generally, a recognition program's baseline is measured as the employee's reaction to the program, converted to planned course of action. If the reaction lines up with the next step in the recognition process (also called a conversion rate), be sure to have record. Your current recognition program may not deliver upon its promise of engagement if employees do not believe the program is directly applicable to their position, and can lead to plummeting conversion rates. Reward programs only succeed when employees view them as being rewarded for actions above and beyond the ordinary (versus an entitlement to their compensation). Also, decide what an appropriate and reasonable success rate is for a program of this style. 2. Manage expectations for corporate culture. Recognition programs are all about rewarding for positive behaviors in order to attract and retain the best workforce suited to your organization. By taking the time to teach employees to emphasize corporate values every day, they will become not only engaged, but also rewarded by their work. Laying these guidelines down is key to managing the expectations of employee culture, and more importantly the expectations of administration as a whole. 3. Measure changes in employee knowledge. At this point, we are able to measure the shi in knowledge of the individual employee. If they are able to identify exactly why they are receiving a type of recognition (for years of service, "above and beyond" performance, etc.) and can use that knowledge to recognize a peer or mention it to a supervisor — the current recognition program in place is doing what was promised when implemented. 4. Reflect on impact overall. Viewing the effects of a recognition program on the organization as a whole is incredibly challenging. Several effects are not financially measurable, so some impacts, while undeniably important to the program, are intangible. Some of the most commonly seen impacts include decrease in employee turnover, increase in employee morale scores and length of employee tenure during the time the program has been in place. 5. Compiling results. Begin by taking all of the measurements taken throughout the time the recognition program has been in place. In order to provide consistent data, consult with accounting to provide standard values (wage information, historical costs) that will allow you to convert the data into black-and-white financial terms that administration will understand. Bear in mind that while intangible — teamwork, creativity and optimism — are just as important to a work environment as employee retention. By defining, managing, measuring, reflecting and compiling data from the very beginning of a formal recognition program, funding from administration, but most importantly, positively impact corporate culture. Royal Recognition has been provid- ing recognition services to 1,500-plus corporate clients worldwide since 1983. Programs such as Career Milestone, Service Award, Safety, Peer to Peer, such as Peerceive® (peerceive.com), which is a web-based program that provides several innovative features such virtual high fives, personalized recognition boards to display trophies, badges, certificates and much more. Please contact us at sales@royalrec.com or visit www.royalrec.com for more information. ■ Joseph Cull is the vice president of Royal Recognition and has 38 years of experience in the recognition industry. He was born and raised in Wisconsin and is very proud of his Midwest heritage. Royal Recognition's corporate headquarters is located in Muskego.

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