Like any HR initiative, getting buy-in from your executive team is a crucial first step in starting an employee recognition program.
Often, though, people leaders have trouble making their case to the C-Suite. They might encounter skepticism as to the worth of the program, or a reluctance to give the program funds over competing priorities. In some cases, leaders just won’t take the time to hear you out.
That’s why we often recommend that our prospective clients create a 1-page proposal to make the business case for employee recognition. While you might be tempted to devote time to making flashy presentations or trying to get facetime in meetings, a concise, simple document is sometimes a more effective way to get your point across to busy executives.
Best of all, it’s easy to get started. Here’s how to create a persuasive employee recognition program proposal in 5 simple steps.
Step 1: Write a Problem Statement
When creating an employee recognition program proposal, the first thing you should write (though it’s not the first part of your proposal, which we’ll come to later in this piece) is your Problem Statement.
A Problem Statement clearly defines the issue your team is hoping to solve, such as disengagement, high turnover, low productivity, or whatever else you’ve identified as a reason for implementing your program.
It’s important to outline exactly why these problems are detrimental to your organization. Highlight who is being impacted, how it hinders your organizational goals, and the cost to your company. If the problem is getting worse, be sure to highlight the rising cost of inaction, too.
Here’s a simple example:
Every quarter, at least 40% of our people are reporting that they don't feel appreciated, which we believe is a driving force behind disengagement and our 40% annual turnover. The cost of this is over $2 million.
You might also want to outline any solutions you’ve tried in the past or are currently using to solve the problem. For example:
Despite trying in-house recognition for spot awards, and working with MileStoneAge for work anniversaries, our team still can't create a culture of recognition where people feel appreciated. If that's not addressed by the end of the year, then it will cost us as much as $3 million.
This statement will help frame the issue in language that your leadership will understand, and tie your program to issues and bottom-line metrics that matter to them.
Step 2: Outline your recommended approach
The next step is to outline your recommended approach to the solution. This is where you get into some of the specifics of your program, and what needs to happen to make it work.
Try to include as much detail as possible about how you’ll design the program, while still being concise. Be clear on what kind of programs are included (milestone programs, top-down recognition programs, peer-to-peer recognition, etc.) and how you intend to roll them out.
If you’re taking a phased approach to scaling your program (which we often recommend), lay out what steps you’ll be rolling out and when. Including this kind of detail can help you make the business case for employee recognition, as it demonstrates that you’ve thought things through and are attempting to de-risk the program as much as possible.
You should also include any evidence you have that the approach works, such as data or examples from other companies that are similar to yours in size, industry, or structure.
One word of caution: Even if you already have a vendor in mind, it’s best to keep this section of your employee recognition program proposal mostly ‘vendor-agnostic’. Your first aim should be to sell your leadership team on your approach and gain agreement on it, rather than persuade them to use a specific platform.
If you want a particular system because they offer features that others don’t, try to work them into the details of your plan without mentioning the system itself. Then, you can simply note that the vendor you’ve found meets the requirements you’ve outlined. If you’ve made the case for your approach well enough, you’ll probably get the vendor you want.
Here’s an example of how this section might look in full, in an organization that is transitioning from using a traditional milestone/anniversary program to a phased implementation of Guusto:
We recommend a crawl, walk, run approach. Phase 1 will include the automation of Milestone Awards so that they never get missed. This phase also includes a top-down recognition program where leaders and managers can give monetary rewards and non-monetary shoutouts that tie back to our core values.
Phase 2 will include a non-monetary peer-to-peer program that ties back to our core values.
This phased methodology has been tested and proven by other companies of similar size and nature. It will help to manage communication, awareness of the program, and help leaders and managers to develop the habit of giving recognition before rolling it out to the entire workforce.
We recommend reallocating our current milestone award budget to a new, more modern vendor that offers rewards people will find more appealing, and more value. Furthermore, we believe there is a significant "hidden manager spend" that can be reallocated to a purposeful and transparent spot award program that creates more impact. Guusto was found to meet and exceed all requirements.
You’ll note how, in this case, the organization doesn’t mention Guusto until the last line. Instead, the details of the approach highlights the need for features that Guusto provides which aren’t typical of other systems, such as non-monetary recognition and more appealing rewards.
Step 3: Show the potential payoff
If you’ve done the previous two sections well, you’re already well on your way to building the business case for employee recognition. Now, it’s time to bring it home by showing your executives the potential ROI of the program.
This will require some prep work on your part. You’ll need to pinpoint some tangible metrics that you can improve as a result of implementing recognition.
Preferably, at least a couple of these will be big-picture, bottom-line results that really matter to your leadership, such as turnover or productivity. However, it’s important to acknowledge that a lot of factors can influence these areas, making it harder to tie any improvements to your program.
Aim to find a balance between these larger outcomes and smaller goals that you can link directly to recognition. For example, if your pulse surveys include a question about whether employees feel valued or appreciated, this might be a good starting point. Then include some big-picture metrics around general engagement, retention, or anything else you feel your program will have a good chance of influencing positively.
By creating these clear goals, you can paint a vivid picture of the real payoff your program will provide, and illustrate the ‘before and after’ state for your organization as a whole. You should also set clear targets for when your leadership team can expect to see an impact on these metrics.
You can do all of this using a simple table outlining your chosen KPIs, their current measure, and target you hope to reach based on your program timeline, like this:
Target by December 31, 2023
Executive KPI #1
“Pulse survey response to: I feel appreciated for my work”
Executive KPI #2
Executive KPI #3
Including these metrics will ensure that when your leadership team sits down to read your employee recognition program proposal, they’ll instantly see some eye-catching figures that will make them sit up and take notice.
Step 4: Detail the investment required
At this point, some of your leadership team will probably be wondering how much this is going to cost, and your employee recognition program proposal should be as transparent as possible about the investment required.
Provide a breakdown of all the costs involved in the program (subscription fees, rewards budgets, setup costs, etc.) as well as when you will need the funds. This gives your leadership a clear understanding of just how much they’ll be spending to get the maximum return.
You can improve your chances of approval by including any savings introducing the program might create in other areas. For instance, companies that have no formal recognition programs in place often have high levels of ‘hidden manager spend’, which is money expensed by managers for ‘ad hoc’ recognition (like buying employees lunches or snacks).
A formal recognition program allows you to reinvest this spending in a more structured, strategic system. Ad Hoc or in-house recognition can also involve a lot of costly admin time that quickly adds up. If you anticipate making savings in areas like this, be sure to include that in your calculations.
In addition to the raw numbers, it’s also a wise move to detail the other resources you’ll need to make the program a success, such as the time and people you’ll need to train managers and internal advocates, as well as to develop resources and communication collateral.
Even though these items add to the investment required, it’s much better to lay them all out in your initial employee recognition program proposal. That way, you can be sure your leadership is prepared to give you all the support you need to make the program work, rather than have them approve it and then be surprised when you need these resources further down the line.
Step 5: Create a summary
The final step in building the business case for employee recognition is to go back to the beginning. Once you’ve finished the body of your proposal, you should create a concise summary that outlines your plans in no more than 1 or 2 sentences.
This gives busy executives a high-level overview of what the proposal is about, and hopefully entices them to read further. Here’s a good example of a short but comprehensive summary:
The People & Culture team should invest in a rewards and recognition platform by the end of Q3, 2023. This will help to create a culture of recognition that aligns to our core values while reducing costly attrition and disengagement because of low morale, created, in large part, by a lack of appreciation.
The finer details, like your budget and specific KPIs, don’t need to be included here. It’s more important to give your leaders a sense of your broader goals, your solution, and your timeline.
We recommend tackling this part of an employee recognition program proposal last, because the deep work you do to create the other sections will help you define your proposal more clearly, making it easier to create a summary that makes a compelling case.
Finally, you should also give your proposal a good title, such as “Making Culture Our Ultimate Advantage”, or whatever else reflects what you’re trying to achieve by introducing the program. While the rest of your proposal is a bit more practical, getting creative with your title will help it stand out from anything else your leadership team might be reviewing and draw in their interest.
Once you have a title that fits, you’re ready to make the business case for employee recognition to your executive team!
Going deeper on the business case for employee recognition
If you’re looking for more inspiration to help you make the business case for employee recognition, check out Culture is the Ultimate Advantage.
This free guide details Guusto’s own framework for transforming culture with recognition, and illustrates why focusing on your people could be the key to driving real improvements to your company’s bottom line. Fill out the form below to get your copy.