Why Your Recognition Program Isn’t Working

Keeping employees happy is something many companies prioritize. Happy employees mean a better work environment, more productivity, and less turnover. HR teams in every organization are tasked in part with this focus on the internal health of their company, and often recognition programs are a big part of this focus. Recognition is integral to company culture and overall employee satisfaction, and therefore organizational health.

So why isn’t your recognition program working?

Companies the world over are spending more on recognition and rewards within their organization, and yet employee engagement and satisfaction remains at an all-time low. Why isn’t an increase in spend on recognition and rewards having a reciprocal increase on engagement?

To help illustrate this conundrum, let’s look at an Awardco client—TaylorMade.

TaylorMade is a U.S.—based manufacturer of golf clubs, bags, and accessories. Founded in 1979, TaylorMade has long been a respected name in the Golf world, being a favorite of many professionals such as Tiger Woods, Rory Mcilroy, and Sung Hyun Park. Recently acquired by Adidas in 2017, TaylorMade has a storied 40 year history of producing quality products and employing a satisfied workforce.

However, as their workforce grew to well over 1000 employees, TaylorMade began to hear of dissatisfaction with the offerings for rewards and recognition. One instance in particular highlighted this pain point more than any other—a set of TaylorMade’s golf clubs from 3 years ago was offered by their recognition program’s limited catalog, and at 30% above TaylorMade’s own MSRP! Why the astronomical increase in price of a 3-year-old product? One word: markups.

Markups Cheapen Employee Rewards and Recognition

Markups are the equivalent of skymiles or frequent flyer miles. Skymiles are a great idea - you get free miles the more you travel. Awesome! However, anyone who uses skymiles can tell you it’s not all it’s cracked up to be. To get any number of skymiles you have to fly a certain amount, and depending on your miles traveled and the fare you paid and the flight segments and the ticketing airline and the purchased fare class and the card you used to pay for it and...you get the idea. Skymiles are not equal to miles traveled. They are, in effect, marked up sky high. (See what we did there?)

Having a recognition program that marks up the price of rewards in your catalog is just like skymiles. It cheapens the employee experience when they’re rewarded points and then try to redeem an item. Often the item is marked up so high employees can’t afford it with their points. In that case it would be easier to go to Amazon and get it cheaper anyway, right?

We call reward markups “redemption inflation”, because that’s what it is. When you offer items that are all more expensive than MSRP in a limited catalog (more on that in a bit), you set a false expectation by giving out points, then immediately devaluing those points. This makes the recognition you give incongruent with the rewards, and nobody wants that. Dollar-for-dollar point redemption is almost unheard of in this industry, but guess what? Awardco does it. And with zero markups. Every dollar you put towards employee recognition is worth a dollar on the platform. Period.

Limited Catalogs Undermine Employee Recognition

While we’re on the subject of rewards and recognition, let’s talk about limited catalogs. When you get recognized for a service milestone or a job well done, that’s an exciting thing! It always feels good to have someone recognize you, and to do so with some kind of point system is even better. Who doesn’t like rewards?

So, let’s say you get recognized, earn points, and then are handed a catalog of items. Great! Except there’s only 10 items to choose from, and none of them are that enticing. One can only have so many windbreakers from last year's conference, right? Maybe you could go for that leather padfolio? Or perhaps a ceramic mug might be nice, but it’d just end up on your desk holding pens and collecting dust like the other 4 ceramic mugs you already have. So much for feeling rewarded for your 5 year anniversary.

Bringing it back to TaylorMade, they found that their traditional catalogue vendor had a limited, outdated selection of astronomically marked up items. They needed a new solution, and they found it with Awardco. A current, constantly updated product catalog with no markups ended up saving TaylorMade quite a bit of money AND took their recognition programs from par for the course to a hole-in-one.

Up Your Game

Recognition and rewards in the employee experience industry is fundamentally broken. High markups, limited choices, and redemption inflation all make employees feel less valued. There is a solution to this, and Awardco offers it with an integration with Amazon. This means millions of products for employees to choose from, all with zero markups, and that’s just the beginning to what you can do with the platform. Elevate your employee recognition game and show your employees you truly care by offering them something they can’t find anywhere else: choice and true value.

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