Four Key Steps to Starting an Awesome Recognition Program
Everybody wants to be recognized for their work performance. Everybody! But you can’t satisfy that universal desire for your employees if your MSP doesn’t have an effective recognition and rewards program. Such a program is vital to the successful growth of your workers and your business. Why? Because it ties into your culture – and I’m a huge believer that a strong culture helps lay a solid foundation in a strong company.
A recognition and rewards (R&R) program contributes to an environment of appreciation and collaboration. It will help you build and strengthen your company culture and your team. You should implement a program if you have five or more employees. Most importantly, however, is that your program requires your leadership’s commitment and support or else it won’t succeed.
There are two primary reasons why my peers say they don’t have an R&R program. The most common is that they don’t know how to implement one (hopefully this blog will address that!). The second is they don’t have the time. Certainly, in a small business this can be a valid reason. Some have tried but the daily busyness has prevented them from giving this crucial initiative the attention it needs and deserves. In this case, consider hiring a third-party company like Crewhu, which specializes in R&R platforms specifically for MSPs.
R&R Program Benefits
So what are some tangible achievements that you can glean from an R&R program?
- Reduce employee turnover and/or annual client churn
- Realize cost savings due to reduced turnover and churn
- Align employees with company goals and core values
- Increase team morale and performance
Four Key Steps
So you believe that the benefits of an R&R program would greatly enhance your MSP. Terrific! Here are the four key steps to creating an effective and awesome program. Follow them closely because the number one reason why R&R programs fail is due to poor execution.
1. Set “SMART” goals
These goals should address the challenges that your business is facing. Select a few employees – including at least one from leadership – who know your MSP well and identify areas that need improvement. Some examples are employee turnover, service delivery, client satisfaction, or team productivity. These “SMART” goals must be:
Specific – Not broad or vague because then they won’t be measurable.
Measurable – Allows you to see the progress or lack thereof and know whether your program is or isn’t working.
Attainable – Unreachable goals will only decrease employee interest in the program as the failures pile up. Shoot for the moon and not the stars and celebrate the small wins.
Relevant – Select goals that you and your team know will, if satisfied, provide significant, positive impact to critical areas of the business.
Timely – Goals that, if satisfied, will demonstrate immediate action and benefits.
2. Set an annual budget
Invest at least one percent of your payroll costs into your R&R program. If your payroll costs are $500,000, then your annual program budget should be $5,000. If you want to determine the budget per employee, then simply divide the program budget by the total number of your employees. If you have 20 employees, then your budget per employee would be $250. If your business has significantly more employees, then you may create program budgets for each department. To do so, take your budget per employee and divide it by the number of employees per department to establish a team budget. Once you have your budget set, allocate it for recognitions like Key Performance Indicator (KPI) awards, Peer to Peer Recognition (based on company core values), and any other awards, such as Employee of the Month.
3. Create a plan
Based on your established “SMART” goals, select your KPIs for your employees or teams, such as customer satisfaction (CSAT) scores, billing ticket response time, etc. Then determine what percentage of the employee or team goal this would be. Then determine the amount of the reward should those goals be met. This should be done for the Peer to Peer Recognition awards as well as any other awards. To check your budget, add up your budgets for the three areas noted above and make certain that they equal your total quarterly or annual R&R budget. You may be under budget in some areas or, if you’re over budget, then you need to reallocate money from another area.
4. Implement the plan
Here’s where you determine how many awards you will distribute based on your budget. For instance, you could have multiple Peer to Peer awards per month. Take Divide the budget per department or per recognition by the total number of awards, which will give you the budget per award. So if you have $50 per each Peer to Peer award, then the recipient would receive that amount. Make your program and the award recipients public so that other employees see this initiative in action. You can post the results on a bulletin board in a public area, like a kitchen or pantry, or publish them in a company newsletter or email.
Be ready to adjust your R&R program throughout each month to best configure it based on your business and the success rate. Tie in your rewards with your company’s core values and employee growth. Remember, an R&R program is an investment in your employees. Happy team members create a healthy culture, which, in turn, creates a successful business.
