How to Calculate Return on Investment from Your Recognition Program

Now that you have the support of company leaders and have been given permission to start an employee recognition program, you’re probably tasked with proving to your higher ups that the program is worth it. No doubt you have been asked, “What’s the return on investment on a program like this?”

While it may seem difficult to justify the added expense of an employee recognition program, it’s actually a lot easier to prove it’s worth than you think. We know you’ve heard the horror stories of not being able to show a program’s effectiveness. You may have even been told that there is no guaranteed way to measure results. Don’t panic. Here are some ways to prove that your employee recognition program is working.


What prompted you to create an employee recognition program to begin with? Were your employees moping around the office? Were their attitudes humdrum about getting work done? Chances are, your workplace was suffering from lack of employee engagement. Without anything to inspire them, your employees were likely doing just enough to get by without taking pride or being spirited in their work.

One way to prove a employee recognition program’s effectiveness is to determine if the statements above were once true and track whether engagement as improved since implementing a the program.

Look around. If you see happy, smiling employees who are hard at work, then your employee recognition program just might have something to do with that. Recognition inspires people to do good work. They see others getting recognized for completing tasks, or they feel good about getting recognized themselves and want to continue those feelings. A recognition program helps make employees feel valued, like their work is worth their effort. They become engaged in the tasks they are assigned and put their best foot forward in order to achieve recognition. If the engagement of your employees has risen, then it’s safe to say your employee recognition has played a part in it.


Employee engagement often leads to greater productivity numbers. When employees have goals to work towards, they become more diligent in the work they are doing.

Benchmark productivity numbers before launching your employee recognition program to see how your employees are doing on an average day. Then, start your recognition program and in a few weeks or months, benchmark the productivity numbers again. We can bet that you’ll see a rise in numbers as employees become more motivated to earn recognition.

Employees who know that their work is rewarded are prompted to produce more. You’ll know your employee recognition program is working if you are seeing higher productivity numbers throughout the company.



Customer Satisfaction

The quality of service your customers receive tends to be less when employees are disengaged. Employees won’t provide the best customer service if they feel no sense of loyalty to the company. Disengagement leads to unproductivity, which leads to poor customer service.

Believe it or not, your employees want to enjoy being in the workplace. They want to know that their jobs have meaning and that they are doing work that is worthwhile. An employee recognition program can help them to feel that connection and value that they crave. When employees feel happy and excited to be at work, they share that attitude with your customers.

Gauging customer satisfaction is another way to show how your employee recognition program is producing retention for your company. Happy employees lead to happy customers which hopefully leads to customer retention, new customer referrals, and greater profits.

Work Culture Impact

Employee recognition programs boost positive attitudes, teamwork, and can help to improve the relationships your employees share with each other and their supervisors. As employee engagement, productivity, and job satisfaction improve, the overall culture of your workplace should begin to improve.

If you are seeing improvement in the way your employees treat each other, this is a measure of program success. This is especially true of employee recognition programs that incorporate a peer-to-peer recognition element. By giving your employees the option to share gratitude and recognize each other for the good things they are doing, they become part of building a healthy workplace culture.


You’ve heard the phrase, “Employees don’t leave jobs, they leave bad workplaces.” This holds true when the workplace offers no incentive for employees to stay. The cost of employee turnover increases year after year. You spend time and money recruiting, training, and paying employee salaries only to have them leave your company after a short time. It’s a costly process that destroys the company budget. The constant turnover of employees can leave remaining staff feeling overworked and burdened.

Employee recognition programs have been proven to have a direct impact on employee retention. Employees are more committed to a workplace that offers a rewarding and worthwhile work experience. Your employee recognition program could be offering those incentives that make employees feel loyal to the workplace, thus, cutting down on the amount of turnover. Employee retention has a direct impact on the company’s budget.

Proving return on investment in a recognition program can be done. It takes time to see the full benefit of offering employees a recognition program. By measuring employee engagement, productivity, customer satisfaction, cultural impact, and employee retention, you can see how a recognition program has an impact on a company’s profits.

Difference Between Employee Engagement and Employee Recognition