How to Control Your Employee Recognition Budget

I get asked the question, “Is it possible for you to give me a total cost analysis, down to the penny for our service award program?” all the time. Most are shocked when I am able to confidently answer them with a “YES, I can!” Employee Recognition Budget

The reason that organizations are shocked, is that most employee recognition companies use what is a called an “average pricing” model when designing service award programs. In my opinion, this “average pricing” model is antiquated and honestly, pretty deceptive.

Cost Breakdown for an Employee Recognition Budget

Here’s how it typically works. Organizations set a budget per years of service milestone. For example, 5 years of service = $205, 10 years of service = $370, 15 years of service = $685, etc.  Using the “average price” model with the above example, some awards could be as low as $180 in your 5-year level or as high as $227.  Therefore, the average price of your 5-year level is technically within your budget of $205, even though you could spend as much as $227, depending on what award the employee selects. See how this can tricky and potentially budget-busting?

So, what’s the alternative? The concept of a “budget control” fixed pricing model is specifically designed to accurately predict spending, control budgets, and keep you from explaining the coverage to your CFO.

Employee Recognition Controlled Budget Model

How does it work? A “budget control” pricing model works the opposite of “average pricing.” Using the same above budget per years of service milestone example, all awards in the 5 year level would be $205, no matter what service award the recipient chooses. It eliminates the likely possibility that your employee will choose a higher priced award, thus eliminating the possibility of exceeding your budget.

Why is this such a huge advantage? Well, a “budget control” pricing model allows you to reduce your employee recognition costs, increase employee engagement, and gain peace of mind knowing that you can now accurately budget your employee service award program.


Total Recognition Request a Consultation

At C.A. Short Company, we are your partner for increased employee engagement resulting in increased performance outcomes to grow your bottom line. Our process and research-based platform helps you engage your team in order to increase your bottom line, motivate your staff to the benefit of the entire organization, and reward your people for the positive changes they make. To request a Complimentary Consultation, please click here. 

Topics: Budget Control, Employee Recognition, Service Awards, Employee Recognition Strategies

Jeff Ross, CPA, CRP, CSM

About the Author
Jeff Ross, CPA, CRP, CSM

Mr. Ross, a certified public accountant, joined the C.A. Short Company as its controller in June 1993 and was named Chief Financial Officer in November 1996. From there, Jeff was promoted to President and Chief Financial Officer, and in 2017, was appointed CEO. Before joining C.A. Short Company, Ross was employed as an accountant by Hausser + Taylor, a large public accounting and consulting firm. Jeff presently serves on the Board of Directors of 2XSalt Ministries, Charlotte, NC and is a member of North Carolina Association of Certified Public Accountants, The Ohio Society of Certified Public Accountants, and American Institute of Certified Public Accountants. Mr. Ross graduated from The Ohio State University with Bachelor of Science and Bachelor of Arts degrees in 1989.

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