Cost Effective?
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Are Employee Recognition Programs Cost Effective?

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If your business does not have an employee recognition program, you are missing out on one of the most cost effective morale building tools at your disposal.

Of course, it costs money to create an employee recognition program such as money for awards and money in man-hours spent on reviewing the nominations for recognition. Yet, the cost will seem small when you consider what can be gained by a well-designed employee recognition program.

One of the best means of making employee recognition programs cost effective is to establish an employee suggestion program.

With this type of program, employees are recognized for making cost saving suggestions for new or better ways to conduct business. By making the criteria for this recognition include that the suggestion must be something that can easily be implemented and will have measurable savings, you can offer a reward of a portion of the cost savings during the first year or first several years.

Let's say an employee has a cost saving solution to a difficult, costly problem – perhaps a paperwork reduction – the cost of the implementation of the idea is subtracted from the amount of time and money saved and an estimated saving is generated.

If an employee can find a way to save $100,000 per year in operating expenses, providing a monetary reward to the employee of $10,000 will still free up $90,000 for other uses!

Another very cost effective way to build morale and recognize employees is the Certificate of Appreciation. When an employee goes above and beyond the basic requirements of the job, they should be rewarded and recognized.

It costs very little to print out a certificate or letter of recognition for presentation to that employee, defining exactly what was done that was above and beyond normal duties. This very inexpensive employee recognition award can win loyalty, morale, and higher performance.

You could also generate an employee recognition that is high coveted, similar to the NASA Silver Snoopy Award. This award is a simply a small silver Snoopy pin and carries a small monetary award.

The fact that this award is so rare and has very strict criteria means that those employees that receive this award are especially proud of it and other employees seek to earn this coveted, rare award. The cost of the employee recognition award is small, but the payback is large.

Think outside the box to find something you could create as an employee recognition award that would be highly sought-after by employees and you'll gain performance increases and higher morale ratings.

If your company is in a financial position to present other awards such as Employee of the Month, division and company-wide awards, the benefits in morale, friendly competition, and higher performance.

Whether your business employs three or 3,000 people, or even more, an employee recognition program is simply a must-have to motivate employees and keep morale high.

Copyright © 2006 by Bill Roche.  All rights reserved.  All material on this site ( is protected by U.S. Federal Copyright law. It may not be reprinted in any form, or hosted on any Web site, without explicit permission.


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