29 October, 2021
Creating and Managing an R&R budget on a digital platform
When building a case for digitizing your firm’s R&R initiatives, an important question that always arises is- how do you ensure that your R&R budget is not exceeded? Or maybe, how can you optimize your R&R spend for maximum efficacy? Or- is my rewards budget framework in line with the industry best practices? This blog helps you answer these questions and ensure effective budgeting using your R&R or engagement digital platform.
Step 1- Creating a Budget Framework
When creating a budget for a digital rewards platform, keep in mind that unlike traditional methods, digital mediums offer the advantage of instant gratification and redemption of rewards. Using this to your firm’s advantage, it will be prudent to split the annual R&R budget to offer rewards or kudos throughout the calendar year. We have already seen that consistent rewards create a higher impact than a single annual rewards ceremony. The budgets for these spot awards can vary for various employee grades or be determined by the level of impact created within the relevant recognition category. We have seen industry best practices dictate specific points pay out for certain categories, business units etc. If you haven’t yet read our blog on creating recognition categories- you can read it here. It is also important to determine the weightage that your firm gives to each of its corporate values or performance indicators, in case the employee recognition is performance-based.
Step 2- Administering the R&R Budget
The best part about an R&R software is that it helps in a timely and accurate disbursal of monetary rewards across its various stakeholders like managers, channel partners and customer service departments. A points-based rewards system can be configured and points can be split across various leaders in the form of kitty pools. Thereafter, supervisors can trigger the disbursal of these points on suitable occasions to their reports, with or without an approval workflow. A highly recommended practice is to cap reward points for a given milestone celebration to combat any bias that may occur across employees for achieving the same success. For a more centralized approach, automated disbursal of cash/points from the HR admin alone can be configured using the R&R tool.
Step 3- Optimizing your budget
To ensure the maximum RoI on your rewards program, R&R administrators need to iterate, reiterate, iterate again! Remember, the focus is on creating a superior employee experience, so ensuring that reward redemption is quick and simple is key. Data analytics on redemption can give an accurate picture of which reward options are more popular, helping you fine-tune your product catalog. Taking the help of an R&R vendor for rewards fulfillment can greatly assist in reducing procurement and warehousing costs. As well, linking appraisal data to your rewards platform can help with an outcome-based approach to justifying spends on company rewards.
Managing an R&R budget digitally has been helping firms create more accountability and gain visibility into where expenses can be channeled or reduced. Having a dynamic, DIY rewards and engagement software is critical to ensure your software grows with your company, thus continually optimizing spends. Moreover, having an intuitive admin control access that helps you closely monitor and alter budgets with changing business priorities will help you manage a more comprehensive R&R program seamlessly.