In an era where recognition and rewards (R&R) programmes draw a colossal annual investment exceeding $46 billion by companies worldwide, an eye-opening revelation from Vantage Circle’s Global AIR^e Benchmarking Report 2022-23 surfaces—70% of these global programmes exhibit moderate to low impact. This incongruity raises pivotal questions.

We've identified two core factors contributing to this:

• Firstly, companies continue to underestimate the transformative power of recognition. Organisations still lack the ability to understand the multiplier effect of recognition. More so, recognition programs are viewed as a one-time formal event, as opposed to ongoing and personalised processes where the nature of reward and mode of delivery are equally important.
• Secondly, the lack of measurable parameters and benchmarks impedes accurate evaluation. Despite the higher investment, accurate data is scarce to measure the impact of recognition programmes, as benchmarks are based on suboptimal frameworks that fail to encompass the complex nuances of recognition. Further, many companies need help establishing causation and correlational relationships between different elements, leading to unreliable results.

Quantifying R&R programmes for measurable results

Given this recognition paradox where R&R is one of the most prevalent and funded HR practices yet continues to have unreliable design, execution and measurement frameworks, Vantage Circle set out to unravel the pressing trends, developments and obstacles in the function. In association with SHRM India, we conducted an in-depth study to understand the effectiveness of recognition programs in multiple industries across the globe.

This year's report features exclusive and comprehensive insights for India, the USA, and the UK markets. In this discourse, we'll delve into pivotal findings from our in-depth analysis of 135 diverse Indian companies, offering a comprehensive view of India's recognition landscape. Notably, it includes the AIR^e (Appreciation, Incentivisation, and Reinforcement) Score Analysis Report, leveraging Vantage Circle's proprietary AIR^e framework, providing a structured, quantitative approach to R&R program design and execution.

Five transformative shifts in recognition practices

Recent years have witnessed five fundamental shifts in how organisations conceptualise and implement modern recognition frameworks. These interdependent shifts have reshaped traditional recognition paradigms, amplifying their impact significantly, and yielding tangible, measurable results.

• Periodicity

There is an increase in the frequency of formal recognition interventions by enhancing the number of spot awards and non-monetary appreciations. This increase in the opportunities to recognise people has enabled organisations to reduce the gap between the demonstration of results and recognition. Our research shows that less than 20% of companies have programmes focusing only on annual recognition. In contrast, there has been a considerable increase in the number of organisations choosing monthly and year-round rewards.

Source: Quantifying R&R Programs for Measurable Results; 1st AIR^e Benchmarking Report (India): 2023-24 by Vantage Circle & SHRM India

• Exclusivity

Organisations are consciously increasing the percentage of employees who receive recognition by broadening the scope of appreciation. This is done with the intention of making employees feel more valued and increasing the number of opportunities to recognise people and includes non-monetary appreciations, birthday or work anniversary celebrations and spot awards. It’s important to note that this is driven more by monetary rewards across most companies, and the utilisation of non-monetary rewards must increase significantly.

• Authority

While recognition in itself is an excellent motivator, companies are realising that the source of recognition also has a considerable impact on the recipient. To this effect, many are increasing the number of people with the authority to recognise others, thereby creating a culture of recognition and making it more accessible. Through open nomination awards and non-monetary recognitions, companies want to expand recognition practices. It is then unsurprising to learn that 51% of companies surveyed have at least one programme element wherein employees can nominate or directly recognise others.

• Basis

To drive permanent behavioural changes and nudge people into forming new habits, the conditions have expanded to determine who gets recognised. Shifting from a result-driven framework to a more behaviour-driven approach, these interventions favour value-based recognition of consistent or repeated demonstration of behaviours through higher-value and high-frequency program elements. This is evident through our findings as 65% of organisations choose to recognise both results and behaviours, and only 7% continue to focus on just results or performance.

Source: Quantifying R&R Programs for Measurable Results; 1st AIR^e Benchmarking Report (India): 2023-24 by Vantage Circle & SHRM India

• Award value driver

The final shift, possibly the most vital, has made rewards more personalised and usable for the recipient. Organisations want to offer rewards that are genuinely valued by people instead of giving standard token awards that may only excite some. Companies still rely extensively on certificates and citations (81%) but there is a focus on the quality of messaging, instead of just having standard/ generic text. While cash (58%), and trophies (56%) are still fairly prevalent, more progressive companies are looking at experiential awards like holidays or family outings (35%), redeemable points (31%) and company-branded merchandise (29%).

India vs. rest of the world: Effectiveness of R&R programmes

Companies in India have a significantly higher effectiveness of their R&R programs than other nations, such as the United States. This is largely a result of Indian companies being significantly ahead of US-based companies in adopting modern R&R practices, which is evident in the difference between the AIR^e design scores for companies in the respective countries  While most US programmes continue to primarily comprise long service awards and annual/quarterly performance-based awards, Indian programmes have a relatively larger share of spot awards, non-monetary recognitions and peer-to-peer awards. Consider the following differences that the report highlights:

• The average AIR^e score across recognition programmes in India is 70%, whereas this score is 60% for companies in the US.
• While 56% of Indian organisations perceive their recognition programs to be very highly or highly effective, this figure is at a much lesser 19% in the US.

Source: Quantifying R&R Programs for Measurable Results; 1st AIR^e Benchmarking Report (India): 2023-24 by Vantage Circle & SHRM India

Designing a data-driven approach for R&R success: The AIR^e framework

To accurately measure the different facets of R&R elements, design and implementation, our report uses Vantage Circle’s proprietary AIRe framework. The AIR^e framework, developed after researching and analysing over 150 global R&R programs, provides a structured and measurable approach for the design and execution of employee R&R .

The AIR^e Assessment is a free online tool that anyone can use to run a quick, quantitative assessment of their recognition programme or even test out a new program design. Developed in response to the growing emphasis on recognition, the AIR^e Framework addresses the pivotal question of how organisations can maximise the potential of their recognition program through key themes like Appreciation, Incentivisation, Reinforcement and eMotional connect. The overall AIR^e score is a single quantitative assessment of the recognition programme. Derived from the four key AIR^e themes, this score enables easy benchmarking and comparison. In addition to an overall score for your recognition program design, you also get a breakdown of scores across each dimension of the framework to understand how to enhance the effectiveness of your program.

As the talent and rewards paradigm continues to mature in India, organisations will increasingly turn to comprehensive, data-driven and measurable recognition frameworks. The findings of the report underscore the importance of making this shift timely and adopting new-age digital solutions for smooth implementation and measurement of R&R programs. 

We invite you to explore the full report, Quantifying R&R Programs for Measurable Results: 1st AIR^e Benchmarking Report (India): 2023-24, and embrace the journey toward enhancing your organisation's recognition framework.