Tag Archives: Ratios

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What Is The Recommended Ratio of Recognition to Rewards?

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Setting up business rules in the design and program strategy stage for a new recognition program can very interesting. I often get asked what ratio to set up for the usage of their recognition to rewards in their programs. 

My answer is always the same. It all depends. 

The thing is the answer really depends on the industry you are in and the need for using rewards or not, and many other factors. For example, a major Silicon Valley technology company will have a significantly higher ratio of rewards to recognition expectation than would a healthcare organization in Texas. 

Here are a few guidelines to follow that might help you.

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The Right Balance of Recognition to Reward Programs

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One of the many challenges in managing a recognition and rewards program is figuring out how to steer the course of your programs to maximum impact. 

And one repeated concern I see is when program owners inherit a program, they call recognition, but it’s been almost a total rewards program. Getting rid of the rewards mindset that triggers entitlement, expectations, and “more please”, is hard to unlearn. 

Providers, compensation and benefits associations, and non-profit business research organizations give good estimates on how much money to spend. They draw upon a percentage of your payroll budget or the average dollar spent per full-time equivalent (FTE) of employees. 

But what’s missing is how much to spend on the different programs. Is there a perfect balance between recognition specific programs and reward type program? How do you advocate budgets based on how people use the different types of programs? 

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