Throughout the year, Milliman conducts regular Pulse Surveys focused on benefits topics that employers find meaningful and strategically informative. For this survey, we looked at employee recognition programs to gain insights on what forms of recognition exist or are emerging among employers, how effective the programs are, and how employers are measuring the success of their programs.
Survey summary
Milliman’s most recent pulse survey drew employer respondents from across a broad range of industries representing over 490,000 FTEs. Of the nearly two-thirds of survey respondents that indicated their organization has a formal employee recognition program in place, most indicated that their organization is maintaining a well-established program that has been in place for more than seven years.
Reasons why respondents continue to maintain their formal employee recognition programs were clear: to build or reflect corporate culture; to drive or inspire high performance behavior in employees; and to attract and/or retain top talent.
More than half of respondents indicated they administer the employee recognition program in-house. Nearly a quarter indicated that the task of administering an employee recognition program is large enough that they combine the use of a third-party vendor with in-house resources.
Most respondents acknowledged that the utilization of employee recognition programs has room for improvement. Regarding the greatest challenges in facilitating employee recognition programs, responses were relatively even—with demonstrating a clear return on investment (44%) and the adoption of the program by leadership (44%) being the slightly more common challenges. Most respondents (44% to 50%) indicated they were “unsure” how to gauge their program’s effectiveness in meeting top goals, and that utilization “wasn’t great” but gaining traction.
Nearly three-quarters of survey respondents indicated either flat or limited use of the employee recognition program throughout the year, or that utilization “wasn’t great” but gaining traction. Most respondents (41% to 56%) indicated that they would either maintain or expand the employee recognition programs they have in place, with only 4% of respondents indicating they would scale their programs back. When looking at the role in the organization and the level of utilization, respondents indicated that management utilized the recognition programs the most in comparison to employees (coworker to coworker) or even senior leadership.
Program Structure
Most respondents acknowledged that the utilization of employee recognition programs has room for improvement. Regarding the greatest challenges in facilitating employee recognition programs, responses were relatively even—with demonstrating a clear return on investment (44%) and the adoption of the program by leadership (44%) being the slightly more common challenges. Most respondents (44% to 50%) indicated they were “unsure” how to gauge their program’s effectiveness in meeting top goals, and that utilization “wasn’t great” but gaining traction.
The average budget, including the cost of rewards, administration of the program, and cost of internal resources, was $139.71 per employee per year. This was slightly more than the median or mode from our survey, which was $100 per employee per year.
The importance of monetary rewards from our survey was inconclusive. When asked how important monetary gifts were to an employee recognition program, more than half of respondents indicated they were “somewhat important” or that they were unsure how important they were. Further, methods to demonstrate recognition varied from the more expensive (points redeemable for merchandise, company-branded merchandise) to the less expensive (written acknowledgement from senior leadership). Several respondents indicated that their organizations combine a number of different recognition approaches, including merchandise, monetary rewards, and written or public acknowledgments.
Surprisingly, the use of extra paid time off (PTO) days as a form of recognition was relatively unpopular (even less popular than issuing stock awards by management).
Caveats
This survey summary has been prepared for information only. Milliman does not intend to benefit or create a legal duty to any recipient of this summary.