Study Finds Recognition Programs Declined Since 2008

by: Nichole Gunn June 27, 2011

WorldatWork conducted two recent studies that found since 2008, employee incentive and recognition programs have declined 3 percent; a slight decline, but a decline none-the-less. WorldatWork is a global association that focuses on business leaders and HR professionals.

The Trends in Employee Recognition survey consisted of 641 WorldatWork HR, benefits, and compensation employees from U.S. organizations, both public and private. Fourteen percent of the respondents cited recognition programs were absent from their working environment. In addition to this, 10 percent stated that the previous year’s recognition awards were eliminated in their companies.

Research manager for WorldatWork, Alison Avalos, explained that such a small decline is not really relevant, taking into account the difficult economic and business climate since the previous study. “The data suggests that even with a recession, recognition programs remain an important component of employee rewards."

Over 75 percent of the respondents cited their company’s annual employee recognition budget averages 2 percent of the overall budget for payroll. This reflects less than a 1 percent decline compared to the 2008 survey results. The economic climate is believed to be the cause of the decline. Supporting the importance of employee recognition programs, 52 percent of the participants felt that senior management for their companies view these initiatives as a cost-effective investment, not an expense. In addition, of the respondents 11 percent cited their companies had the means in place to secure an accurate measure of their programs’ ROI.

The company’s second study, WorldatWork's Bonus Programs and Practices, found that bonus programs also took a hit. Since the 2008 study, an occurrence of variety in the bonus program initiatives decreased as well. This decline put the bonus programs at a level equal to 2005.

The second survey consisted of 1,023 business owners and 85 percent of them cited that a minimum of one form of bonus program was offered in their companies, with a referral bonus ranking highest. Along with this:

  • Sixty percent rewarded workers for referring a job applicant who was hired
  • Fifty-four percent provided “sign-on bonus programs”
  • Forty-three percent offered “spot bonuses”
  • Twenty-five percent provided retention bonuses
  • Fifteen percent (approximately) do not have a bonus program in pace
  • Nine percent cited they provided each of the bonus programs mentioned above