Building and Managing an Employee Recognition Budget

Usually before anything else can be done to design and implement an employee incentive or recognition program, you must have a budget.  Without one you’re stuck at the starting gate ready for the race, but the gate never opens.

Over the years we have assisted many companies in building budgets.  Without spending quality time to do it, you will have to deal with obstacle after obstacle in developing the program and constantly be looking for permission to add all the pertinent strategies to make the program as effective as it can be.

Oftentimes, many parts of your needed budgets will already be embedded in the financial workings of the organization but in separate departments or disciplines.  When this is the case, you may find that you are competing with managers of those departments who want to maintain control of those budget dollars.  That can be a common occurrence.

There are common formulas and metrics for building a program budget that all have merit, such as: 

• Percentage of compensation
• Percentage of achievement levels
• Fixed budget design
• Open-ended design

 While these standard guidelines can help create a structure to track a program once approved, they won’t help you get the approval. In the end result you will also need to be able to analyze results and determine how the budget was spent.

Over the years we have seen many guidelines of how to determine budgets.  One of the best we have seen that also includes information on now to sell the budget to executives comes from Citizen Watch Company.  You can download a copy of that guideline here.

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