We are approaching the last quarter of the year and it may well be time to submit your budget requests for keeping your offline and online recognition programs in place, or even asking for funding to add new programs.
It can seem like a nail biting exercise each year to go through. One way to make this angst less ominous is to get your executive sponsor’s support ahead of time. Follow these practical ways to get your leader’s commitment to your recognition program budget.
Get Strategic With Your Budgets
Connect your recognition budget immediately to the organization’s business strategy.
You should definitely figure out with your senior leader is a bottom-line or above-the-line thinker. Determine what your senior leader’s focus point is. Are they more money and financially focused? Or are they more emotional and people focused?
Knowing these leadership qualities will determine (1) if you need more social science research findings and capture employee stories or (2) a focus on the accounting, finances, and return on investment projections.
The WorldatWork, 2019 Trends in Employee Recognition Survey found that 49 percent of organizations have a written recognition strategy. Of those who had a written recognition strategy, they align 97 percent of them with their business strategy.
As soon as you can get recognition aligned with your CEO’s or senior leader’s strategic initiatives, you will have made recognition a game-changer. Budget approvals will be much easier to achieve.
Create a Sustainable Program Budget
To develop a sustainable and renewable program budget, help the leaders you report to understand the thinking behind the recognition strategy and plan and accompanying budget. Provide numbers and stakeholder support for the programs and the associated costs.
Show them the calculations and supportive work behind your thinking. Lay out the meetings and focus groups held along with their results. Provide survey findings, benchmarking analysis, and best practice reviews. Anything to keep the funding going.
Let them know what other influencers and leaders in the organization are thinking about the topic. They don’t need any surprises. Hear your leader’s pros and cons on the matter and how you plan to respond to these ideas.
It is also important to show the collaborative input that went into the budget proposal.
It will impress your leader if you show them how your recognition and reward programs, or how your budget proposal, were developed, with the help of others in the organization.
Too many recognition initiatives are so Human Resource focused that the business side of the equation gets totally neglected. Unfold how you got input from business unit leaders and key stakeholders, along with employees.
Measure Program Effectiveness
Ensure your technology team and those of your program provider are giving you the drill-down capabilities to know how effectively people are using your recognition programs.
Detailed predictive and prescriptive analytic reports from your programs can help you know what is likely to happen with certain outcomes and what you can do to make that performance happen in the future. This allows you to provide data to your leader that shows how recognition and rewards affect employee engagement and produce higher productivity measures and other key performance metrics.
Together, these numbers support your budget submission and turn recognition and rewards into an investment versus a cost.
Demonstrate Business Impact and ROI
A great preparation for budget approval is proving that your programs will pay for themselves. For example, you can look at retention figures in the organization and calculate turnover costs. Then prove how a targeted recognition and reward program helps keep staff and save money for the organization.
Remember, your leaders are going to be thinking questions like,
• What will be the ROI?
• How will this impact our people?
• When will we be able to see improvements?
• How will you know?
Your leaders are going to want to know the bottom-line results and answers to these questions. They will also want to know the metrics that show how well their employees are feeling valued and appreciated. Not all numbers can or need to be monetized to prove your programs are affecting people and performance.
Show them reports, examples of employee stories, and evidence the organization’s recognition initiatives are working and paying off.
Be prepared to answer how you will know responses to their questions and when you will know it. Your actions and decisiveness will add credibility to why your budget submissions are worth supporting.
Approve and Review Budgets Regularly
I think the biggest thing about getting the approval of an upcoming year’s budget for your recognition and reward programs is making sure it is never a surprise.
Your executive champion should receive quarterly updates on the previous budget submitted and current spending year-to-date. During the third quarter, present them with an initial estimated budget proposal for the following year. That way, you have given them a heads-up with which they can see if the organization can run with it or not. You will receive feedback on what to prepare for based on situations you could never have expected.
Figure Out the Right Timing
Finally, there is determining the right timing to present your budget for approval. As said earlier, it should not come as a surprise to them, anyway.
However, there will always be a few idiosyncrasies you should not ignore about your leader.
It’s important to know your leader’s preferences for when to receive important documentation. Their executive assistant can let you know what’s coming up on their calendar and when an opportune time might be best. They can also let you know what’s top of mind for them and how burdensome it is. And there are also personal needs that may concern them.
Bottom-line is to know what is happening right before and immediately after when you consider submitting your budget proposal.
Recognition Reflection: How prepared are you to submit your recognition and reward program budget proposal to your executive leader?
Roy is no longer writing new content for this site (he has retired!), but you can subscribe to Engage2Excel’s blog as Engage2Excel will be taking Roy’s place writing about similar topics on employee recognition and retention, leadership and strategy.