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Solution: Thanks Recognition Platform

Thanks is a fast, simple, easy online software platform that helps clients step up, understand and manage a recognition program. Thanks budget utilization is tracked at department-level and budget is always deducted from nominator’s tagged department. Department heads have access to budget utilization reports for their departments and they use this information to encourage optimum utilization. Manager linked budgets also roll up to respective departments. As per best practice, budgeting for performance-based awards is allocated quarterly to allow for appropriate tracking and internal reporting.

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Three-Step Guide: How To Build An Employee Recognition Budget

Introduction: building a recognition program

Maybe you’re looking for a better way to fund and build your recognition program. Start with these three basic steps. We’ll provide some examples of what to recognize and help you understand what amounts and calculations for starting your program, then show you how to successfully manage this budget with a the budget reporting features of the Thanks platform.

Please use the amounts suggested as starting points in discussions. They are not intended as a universal recommendation for appreciation. Some administrators may feel that they are not significant enough while others may have the opposite reaction. They are a starting point for customers who are new to the concept of appreciation.

Each organization will have different expectations of what their employees will value as an expression of appreciation. In many cases it will be based on salaries and or other benefits. The example of providing an appreciation award that had enough value to purchase a movie ticket and popcorn might be perceived differently by different industries and regions. If you convert to local currencies, please consider the purchasing power of commonly-used denominations. What makes sense at $10 USD in North America might not make sense for purchases in India or Singapore.

Organizations ascertain budgeting needs based on employee strength and their willingness to spend on monetary recognition. In our experience if 40% of your employees are rewarded during a year, the company has met their recognition requirements.

Step 1: Determine what is a Department Recognition Award

Budget Calculation for Performance Based Awards (Department Level Budget)

Mostly organizations identify budgets based on employee count and maximum affordable annual spend. Once the annual budget is identified the clients will segregate performance-based budget on a quarterly basis. In the below example we’re using an employee count of 600.

Example:
  • Employee Count : 600
  • Example of Department Level Awards per employee per year : $10 USD
  • Annual budget calculation based on this example : 600 x $10 USD = $6,000 USD
  • Quarterly budget calculation based on this example (25% of totals above) : 600 x $2.50 USD = $1,500 USD
Budget is allocated per department based on employee count within each department so additional math would use the employee counts of individual departments.

Step 2 Determine What is a Company Level Award?

Budget Calculation for Personal Milestones (Company Level Budget)

This is over and above performance-based budget and is at the company level for rewards towards service anniversaries, birthdays, joining bonus and others. Budget in this respect is determined annually as these are mostly auto-triggers based on the database of your employees anniversaries, birthdays, retirements etc. As per best practice, clients plan for this amount annually to ensure that there are sufficient funds to accommodate date-based events described earlier. Determine each planned event type and come up with an event budget. Below we use examples of anniversary and birthday:

Examples:
Service Anniversary Award
  • Coverage : 10% employees completing 5th service anniversary
  • Example of Reward per employee: $25 USD
  • Calculation based on this example: $25 USD for 60 employees means an annual budget for length-of-service awards is $1,500 USD
Birthday Points
  • Coverage: All 600 employees
  • Example of Reward per employee: $10 USD
  • Calculation based on this example: $10 USD x 600 employees mean an annual budget for birthday points: $6,000 USD

Step 3. Determine the spending amounts for department and company rewards

In general, many customers find that the first three months will help them see the real-world amount that they should be budgeting for performance-based awards.

Several companies also pay out incentives/bonuses in the form of reward points based on anniversaries and group achievements that are sometimes unplanned.

Also, budgets for performance-based awards can tend to vary because of prevailing business conditions. Because of these issues, a suggested best practice for performance-based budgeting is to use a shorter window of time than the annual predictable amounts for service anniversaries and birthday gifts.

There is no one best practice for budgeting and pre-funding that is applicable to all companies. The needs of each organization will vary. These estimates are based on years of practical experience and are suggestions meant to provide a starting point for customers to consider their unique circumstances.

Unrewarded budget from each quarter is carried over for the next quarter, and a best practice for year-end is for appreciation nominators to have the opportunity to use the available budget to recognize those that really shined who might have not already been identified, or plan something special for those who continued to shine all year long.
Sample Budget:

Based on 600 employees and a company service and birthday reward of $25 and department awards for achievements at $10.

Budget Calculation Examples Frequency Category Amount
Performance-Based Budget Quarterly Department Level $1,500 USD
Event-Based Awards Annual Company level $6,000 USD
Long Service Anniversaries Annual Company level $1,500 USD
Total Pre-fund     $9,000 USD

Thanks is a employee recognition services software platform owned by O.C. Tanner. Research presented on this site is backed by the O.C. Tanner Institute which publishes findings worldwide in the following publications:

Free Download - Free Recognition Budget Tool( M.S. Excel)

If your current solution does not help you with budgeting for your recognition program please download this free tool. Or consider a robust solution like Thanks to save you time and money.  Download for free Thanks Recognition Free Budget Tool