What You Need To Do To Protect Your Recognition Budget

What is it about recognition budgets? They seem to get decimated at a blink of an eye.

Too often recognition is one of the first budget lines to be cut. This happens when recognition has not been positioned properly as a strategic tool to engage talent and lift results.

The summer months are a great time for you to begin your preparations for protecting next year’s budget.

There are two phases to protecting your recognition budget – preparation phase and presentation phase.

Follow along to see what you can do today to get things ready for your next budget submission.

Preparation Phase

1. Know your current budget status and review it.

Meet with your team members (if you have some) and review your budget. Get their input on concerns for how things have gone. Talk with appropriate stakeholders to get their view and input on how recognition is benefiting the organization. Always seek for facts versus opinions.

Project whether there is going to be a surplus or shortfall and the reasons why. Go over the previous year’s budget. What did it reveal about operations? Can you extrapolate what the current budget indicates? Whatever historical overview you can gather it will always be helpful.

If you can review your budget on a monthly and quarterly basis then most of these details will not come as a surprise.

Continually ask yourself questions like the following and find out the answers so you’re prepared.

  • Is your current recognition vendor agreement terminating soon?
  • Would a switch to a different vendor likely increase or lower costs?
  • Are there any factors that could pose a price increase (for example, the price of precious metals and stones for jewelry items)?
  • Will the cost of merchandise and awards change?
  • Do you need to enhance or rebrand your recognition programs?
  • Do managers and staff need further education and training?
  • Are you planning to pursue any new recognition initiatives?
  • Are there request for additional staff positions?

2. Align recognition with the organizational business plan.

Make sure you know and understand the company’s strategic business plan. How can you embed recognition into the various strategic initiatives? Where could you leverage the power of meaningful and effective recognition practices?

Think like your CEO or the company owner. Or perhaps walk a mile in the shoes of your CHRO or HR director. What does your leadership team expect from employee recognition practices and programs? How can you better educate them now on the benefits of well-aligned recognition programs?

You may have to role-play and think through all the budget scenarios your leaders will be receiving. What do you need to do to persuade them to accept your budget request?

Consider preparing several budget scenarios to anticipate your ideas, the various current state challenges, and potential unknowns. Meet with other department leaders to understand what their future plans and needs are so you can think more holistically.

3. Educate and inform your leaders about recognition’s impact.

You may have an executive sponsor that “gets it” as far as recognition is concerned. But recognition practices and programs will not be top of mind for the majority of leaders reviewing your budget proposal.

Provide a summary overview of existing recognition practices and programs. Ensure you state the purpose of each recognition program, the objectives for each program, and year to date outcomes and analysis of their impact.

Calculate, wherever possible, the cost-benefit analysis and ROI of your recognition programs. Where the monetized impact is not available, collect the business and human impact and benefits in the eyes of employees and managers.

Now it comes down to the rationale for your budget. Outline the projected spending plans for employee recognition for the coming year with a detailed explanation as to why. When leaders understand why they may approve the direction if not the full amount you requested.

Presentation Phase

1. Line up your executive leader support.

With all the numbers you’ve calculated and projected for next year’s budget, you are going to have to sell your budget plan. Remember, you are competing with all the other departments vying for a share of the same pot of money.

Get the support of an executive leader who can act as your executive sponsor. You can consult with them now about your proposed budget. They can also give you the inside scoop on how the other leaders will be thinking about recognition and budget priorities.

Have your executive sponsor craft a summary message to introduce your budget plan. They will be able to tell their colleagues better than you can as to why this budget should be accepted and approved.

2 Develop a one or two-page overview.

The senior leadership team are busy people. They need to see an overview of things and then they will go straight to the bottom-line dollar figures. Give these leaders a short, to the point plan at a glance. State the priorities of recognition practices and programs for the coming year. Identify just three to five goals you want to achieve during the budgeting period. Always align your recognition goals with the organizations’ strategic priorities. That should get their attention.

Then you can provide more information to educate those who want to delve further into what’s been happening with recognition. Clarify your purpose with employee recognition practices and programs. Identify what you see as the mandate for recognition and how your role supports the company’s business plans.

3. Remind them of the current company status.

Add in the context of present work conditions and talent management needs and how recognition can help. Link recognition to attracting potential key talent and to saving money through improved retention.

If you are requesting more staff or have operational needs this is where you build in the case for these budget items.

Then it is a matter of creating the appendices with tables of information and other supporting documentation.

I think the biggest thing about protecting your recognition budget is not relying on the numbers in isolation. You need all the support you can get ahead of time. And you need to be selling next year’s budget all year long as well as in writing when you get ready to submit your budget request.

Work hard to get to know your senior leaders. While it might not be possible for everyone, strive to like them so you know they like you. Provide them with updates on recognition progress at least on a quarterly basis. Or inform your executive sponsor so they can gauge the need to present to the entire senior leadership team.

In essence, your budget request should never come as a surprise. The senior leaders should be anticipating it. Why? Because you have done such a great job of promoting and reinforcing the benefits of employee recognition all year long.

Reflective Question: How do you typically prepare for your annual recognition budget submission?

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.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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