by Roy Saunderson | September 08, 2013
Budgets for rewards and recognition programs are frequently based upon benchmarking research from professional firms or associations. In reality, each organization must consider its own management philosophy, strategic direction, and culture to be able to know what the right spend is for them. The following top 10 ways offer reflective insights on budgeting the right amount of money to invest in your rewards and recognition programs.

1. Spend money on strategic planning. “Begin with the end in mind” was wise advice from the late Stephen R. Covey. By crafting your reason “why” for rewards and recognition, and what goals you want to achieve will help determine how best to be in control of your budgets because everyone will be on the same page with you.
 
2. Create a business strategy. If you haven’t designed your recognition and reward programs around your business goals and strategic initiatives you will be wasting your money. Always align internal company metrics and KPI’s with rewards and recognition. Make your programs a driver so you will make money from them!
 
3. Lead with your culture. From your corporate leadership and management style to your vision and values which says what your organization is about; the essence of who you are determines the value and purpose behind rewards and recognition. You must determine what to spend by listening carefully to your people and your gut!
 
4. Systemize and save money. By automating and combining many rewards and recognition programs together across business units you will be able to better support internal recognition practices. This will save you money as well as time and resources by consolidating budgets allowing you to focus on growth strategies.
 
5. Invest wisely on execution. Sometimes, we spend too much time on pricing out the tangible components of rewards, awards, and incentives that we neglect investing the right amount of money on making tangibles as important as they should be. Don’t neglect presentation and appearance in the budget equation because it does make a difference.
 
6. More meaningful data analysis. Program reports should not be just about usage and spend. Set up metrics so you can analyze exactly what programs are driving which productivity measures or sales results and, more importantly, so you can know how much you need to spend to get even better results in the future.
 
7. Budget for meaningful education. Don’t ever install recognition and reward systems without having an education budget. This often neglected area is critical for showing people how to get recognition right, following business criteria and rules for giving rewards, and learning how to use all programs most effectively.
 
8. Think long-term perspective. Rewards and incentives budgets are frequently focused on short-term results versus steering right outcomes over the long term. Discover the power in using recognition to acknowledge right behaviors along the way and carefully rewarding results at the end. This means budgeting for the long-term.
 
9. Know that reality always hits home. In the end you must create a fair and equitable gauge for what to spend. Companies use dollar figures per FTE and percentages like half of one percent up to an average of 1 or 2 percent of base salary. Always be thinking of what you can afford today and then how you can invest better for future goals.
 
10. Be transparent with your budgets. Whatever you determine for your rewards and recognition budget make it a clear accounting line item. Be open about what you are spending and even more open with accountability for your programs and spending through regular and annual reviews. A budget will help you spend wisely.
 
Incentive columnist Roy Saunderson is author of Giving the Real Recognition Way and Chief Learning Officer of the Recognition Management Institute, a consulting a training company which helps leaders and managers get recognition right. He can be reached at roysaunderson@rideau.com. Also, tune in every Tuesday to his radio show, Real Recognition Radio.