It’s that time of year again…budget season! Last year we offered some guidelines to follow when developing your incentive budget. Here, we’ll touch on the highlights of an Incentive magazine White Paper on maximizing your incentive budget.
Incentive professionals agree that careful planning is essential when building your budget for employee incentive, reward and recognition programs, especially in these 5 key areas:
- Gaining Upper Management Approval. Keep in mind what matters most to management: return on investment and programs that support the overall business strategy. Branding your program so that it reinforces the company’s brand and marketing messages will also go a long way to gaining management support. Having a well-defined incentive and recognition strategy aligned with the goals of the organization will provide the greatest business impact. Incentive, reward and recognition programs are also a critical component of employee engagement efforts, so that is another area in which you can report results and the impact on the business.
- Leverage Technology. Many professional incentive, reward and recognition companies provide administrative tools that can be customized for each program, will allow for expansion or special features and generate custom reports.
- Spend Strategically. Many companies run reward and recognition programs in silos. Combining your programs across the organization will provide economies of scale and will allow you to build stronger relationships with your suppliers. Make sure to partner with a supplier that is in the Incentive marketplace. This will ensure that you are working with a supplier that is trained in the theory and best practices in designing effective employee or consumer programs. Your best bet is an Incentive Professional or a Certified Professional in Incentive Management. These professionals can guide you through the process and avoid potential pitfalls and unintended consequences.
- Cut Strategically. Likewise, when economic downturns occur, it doesn’t mean that you have to discontinue your reward and recognition programs. In fact, a strategically designed employee rewards program can often make the difference between companies that weather the economic storm and those who don’t. Specifically:
- Use Value-based Rewards. Merchandise rewards are not only more effective in changing behavior and motivating employees, but they are also the easiest to adjust when you must reduce a budget. Incentive professionals agree that, rather than considering merchandise rewards to be a simple transaction, make the argument to management that putting value ahead of price will contribute to the effectiveness of your program. Value-based rewards that are selected with input from your employee audience will be more meaningful. Likewise, rewards that are commensurate with the activities or tasks the employee must perform to earn them make for a much more powerful experience for the employee.
The most carefully-prepared budget won’t matter if you can’t get it approved by upper management. Partnering with an experienced incentive professional and focusing on these key areas will ensure that your budget will be approved – and that your employee incentive, reward or recognition program will produce positive results!