Introduction 

The looming impact of the recession in 2023 causes HR leaders across all industries to look at the potential of cost-saving activities in their organizations. When a recession hits, HR leaders are faced with a choice. Where to cut?  

As a response to the recession, leaders look for those quick to execute measures to impact the future of their organizations concretely. However, crucial spending decisions should be made with great care, as budget cuts always come with trade-offs.  

Some of the many options HR leaders have include:

• Freezing hiring, redeployment
• Cutting salaries and temporary staff
• Switching to lower-cost HR tech vendors and 
• layoffs as the final measure. 

The HR leaders need to carefully gauge their organization’s setup to see what trade-offs their workforce can manage without significantly impacting talent. Regardless of the recession, we’re simultaneously in a ‘War for Talent’ situation, and wrong decisions have huge ramifications. 

Wherever your company plans to make cuts this year to weather the recession, you are probably looking at your recognition programs to see what value they bring to the table. 

Before you decide something works or does not, ensure the programs are implemented to bring maximum impact with the lowest possible FTE and investment. 

7 Reasons Why Most Recognition Programs Fail 

You may be just preparing your recognition program and want to ensure everything goes smoothly. Or, you could be facing your first roadblock in getting the recognition programs to do what they ought to do for your organization. 

Either way, there’s tremendous power in knowing the most common pitfalls regarding Employee Recognition Programs. You can prepare yourself accordingly and fix the paths of error as soon as possible so that your recognition program can deliver on its promises. 

1. Lack of executive involvement 

Suppose your organization allows both peer-2-peer and top-down recognition. The workforce and the organization benefit when leaders engage in recognition practices. Leaders who regularly praise their followers set the tone, clearly communicate company values and steer company culture in the right direction. 

Leaders who are engaged with recognition practices build a stronger connection between HR and organizations’ strategy. And that is for a reason. Strategic human resource management (SHRM) tremendously impacts organizations’ health and success. One of the crucial tools of strategic human resource management is rewards and recognition. 

According to Forbes, SHRM can help businesses cut costs by increasing employee productivity and engagement, better workplace relationships, reducing turnover, and creating a positive and resilient work environment. 

If leaders ignore the R&R programs and treat them as only something that exists in the HR domain, there is the danger that the R&R programs won’t be utilized in their maximum possible impact. That itself is a waste of resources. 

R&R platforms can offer a great return on investment with minimal FTE and company spending while significantly strengthening the workforce’s health by cultivating an ‘attitude of gratitude’. To make that possible, the R&R program needs to be communicated well, and a leader’s voice is one of the company’s most potent and vital communication channels. 

Leaders can engage in recognition and rewards practices often, publicly, and send personalized messages highlighting individual and team contributions and showcasing company values in action. Additionally, they can help promote a new recognition program, reinforce the importance of recognition programs by using them in performance management and help design R&R programs that correspond to company goals and help achieve the desired KPIs. 

—> Here’s how leadership can get involved in employee recognition practices. 

2. Lack of communication 

Lack of communication is not only about the initial rolling out of the programs but about consistent check-ins with employees and program moderation in which R&R tool administrators look at both the app KPIs (app usage) and strategic KPIs and adjust the programs accordingly. 

In the best-case scenario, the R&R solution vendor will offer comprehensive guidance throughout the R&R program cycle to enhance and maximize the recognition programs’ impact. Companies will utilize this input to reach the organization’s goals. 

The reality of strategic human resource management and using an R&R tool is that a lot is done before the actual rolling out of the program. 

Supposing the company has thought about its desired goals and how they want to utilize the R&R tool, they’ve defined the KPIs, but have they consulted its end-users? 

Here’s where employee listening,  another SHRM concept, comes in handy. Surveying the employees answers specific questions about what your workforce values the most instead of guessing and failing. 

Secondly, a crucial communication moment occurs just before and during the rolling out of the program. This one may seem obvious, but if all employees aren’t aware of the recognition program or its benefits, if they are unclear how to recognize and what recognition programs are in place in a company – the programs won’t be used and therefore won’t deliver on its KPI’s. 

Therefore the R&R program needs to ensure access to clear guidelines regarding the ongoing R&R programs within the company. This goes for recognition programs beyond service anniversaries and private top-down praises. 

—> How to introduce an R&R program in your company? Find out more here.

3. Line managers don’t see the value of R&R programs 

Yes, executive involvement in R&R practices is critical. 

However, if you see your line managers not participating in the program as they should be, there is a problem. 

Gallup finds that 28% of the most memorable recognition comes from an employee’s manager. 

Since managers spend more time with employees than executives, they must be equipped and empowered to carry the torch of company values. 

The reality of employees’ lives is how they interact within their teams; much of it is informed by the relationship with their line managers. 

It’s the line managers who are more aware of who is in charge of which project and who has the power to recognize outstanding work on the spot in a timely and personalized manner. 

When that doesn’t happen, employees may feel that their contribution is going unrecognized, which may lead to deeper frustration in their workplaces, negatively impacting their motivation, engagement, productivity, and even willingness to stay loyal to the company. 

Most R&R tools provide detailed analytics that allows HR to identify those line managers blocking the way to praise and recognition. That way, HR leaders can quickly identify who acts as the roadblock to a successful R&R strategy and take action to correct it. 

4. Integration issues

There is a lot to unpack regarding integration issues related to R&R tools and programs.

Companies today operate with many mostly disconnected apps, and app sprawl is becoming a burden rather than a solution. Optimizing the tech stack is going to become more and more important in the upcoming years. 

The most crucial issue to consider when it comes to integration is that an R&R tool should integrate with the core HR – to minimize manual program maintenance and remove related costs and error margins. This integration matters for saving on FTE and optimizing HR’s time and resources. 

However, that integration is only the baseline of integrations an R&R tool should be able to provide. 

The most successful R&R tools happen in the flow of employees’ work. That means employees should be able to access the tool from within the apps they use daily to minimize the disruption caused by toggling between the apps and the associated time waste. 

Popular collaboration and communication tool integrations include Slack, Microsoft Teams, Outlook, LinkedIn, SharePoint, Gmail, and so on. 

These integrations ease access to the R&R tools, and boost adoption and usage. Ideally, the R&R tool would also offer options for single-sign ons (SSOs) so that employees can navigate in and out of apps seamlessly. 

According to Stacey Harris, Chief Research Officer and Managing Partner at Sapient Insights:

“Many vendors have lost sight of the experience of those supporting and maintaining our HR System environments. These critical roles are still spending over 40% of their time on reconfiguring systems, integration issues, and running regular reports. Poorly designed HR administration pages and setup processes can cost an organization both time and valuable data quality, not to mention possible data privacy risks.” 

—> Find out why Single sign-ons matter for the R&R tools. 

5. Accessibility issues

Accessibility is connected to integration capabilities in many ways, but it also goes beyond that. 

If your R&R tool is integrated with the daily app environment of users, then the employees across the workforce can easily access and use the R&R tool for maximum impact. 

However, if your workforce is not uniform, and some people work in offices while some work in other locations, having an R&R platform that’s easy to access via a desktop will alienate a key part of your workforce. 

This kind of accessibility inequality causes a disconnect between various parts of your organization. It creates an unwanted effect that some employees are ‘better’ than others, spoiling the efforts to improve company culture. 

Therefore, you will have to ensure that your blue-collar employees have access to recognition practices and are able to engage in recognition. Luckily, many R&R vendors offer solutions for unifying an organization’s entire workforce, including deskless and desktop employees. 

6. Lack of support for HR 

Another issue that can cause an employee recognition program to fail is the need for more training of HR admins.  

In the Sapient Insights survey, over 25% of respondents claim that “a lack of systems training and knowledge is one of the top reasons their HR applications are not meeting their business needs.”

This, in part, has to do with the fact that HR is expected to be more tech-savvy than before and that they should have a reasonably good understanding of what kind of apps the HR can use to optimize the productivity of the HR department and the workforce overall. 

With that said, every R&R platform has its own quirks, and despite how easy the vendors claim the tools are to use, HR is right to expect a decent amount of support and guidance from the HR tech vendors. The HR tech vendors need to provide the HR admins with training and advisory services to make the HR’s job easier. 

One would be surprised that many HR tech vendors do not own up to this part of their offering, causing HR to be less effective in managing the platform and the recognition program to be less impactful. 

It’s also fair to note that HR jobs are on the rise in the UK, France, Germany, and the US as companies realize that HR is a business-critical function. 

According to LinkedIn, among the top 25 jobs in the US that are growing in demand are roles such as DEI officers and managers (#3), HR analytics managers (#2), chief people officers (#15), employee experience managers (#5) and heads of reward (#21). 

Based on the popularity of these jobs, a new trend emerges in which there is an increased need for HR to be more data-driven and use HR tech analytics insights to make better decisions that impact the entire company. 

Additionally, the new HR tech that emerges every year calls for HR to be more up to date, aware, and discerning about what R&R tools can provide, as not all solutions are built the same. 

Bearing this in mind, HR could expect the HR tech vendors to be more meticulous about preparing them for learning how to utilize the analytics and what insights the HR can draw from it. 

7. The programs aren’t flexible

Companies constantly adapt and change to respond to external and internal threats and opportunities. The recognition programs should also be flexible and adaptable enough to accommodate changes in direction and shifting priorities. 

There is immense potential in recognition programs to engage, align and connect employees during times of change. 

It’s precisely those times, during the big changes and uncertainty, that the ways of working and the overall resilience of the workforce will be the deciding factor for companies. 

Do the employees feel confident about the organization and their future in it? 

We’ve learned numerous times that the way to build that future outlook for the company and its talent is by having a great company culture, which falls under the category of strategic long-term planning. 

A recognition and rewards tool should be built in a way to accommodate several R&R programs with multiple goals and varying dimensions that target different sections of the workforce in the way that’s most relevant to employees’ and companies’ plans, omnichannel access, hyper-personalization capabilities and above all – the ability to integrate with the tech stack the company already uses. 

Conclusion

Leaders will want to know about the impact of the R&R solutions their companies have invested in, and HR leaders need to stay on top of running the HR tech stack to deliver results. A thorough check-up is in order if the R&R solution does not bring the benefits it is supposed to. 

In this post, we’ve outlined 7 most common reasons why recognition programs fail: lack of executive involvement, lack of communication, line managers not seeing the value of R&R programs, integration and accessibility issues, lack of support to HR, and the R&R tools aren’t flexible enough. 

Some of these issues are in the HR tech vendor’s hands. Still, some will depend on the internal setting of a company and can be solved with a few decisive initiatives (aligning line managers and involving the executives). Integration, accessibility issues, and lack of flexibility can only be solved by switching to a vendor with superior capabilities.

HR leaders are faced with an important mission. Their insight and overview into the entire workforce make them owners of mission-critical processes and information that leaders need to steer the company in the right direction. 

In times of recession, HR must make cuts where appropriate. It would be a waste to cut an R&R tool that can bring many benefits but is not used correctly and can be fixed with a few interventions or changing the vendor into a more flexible and adaptable one.